1st May 2013. After 12 months of negotiations, Australian supermarket giant Woolworths Limited (ASX:WOW) has acquired a 50% non-controlling stake in Sydney-based customer data analytics firm Quantium, for an estimated A$20m, with Quantium also gaining access to Woolworth’s de-identified customer data and providing insights to the retailer’s suppliers.
The deal is a further development of the long relationship Quantium already has with Woolworths, and will enable the firm to extend its customer insight services to existing and new clients. In turn, Quantium will be able to tap Woolworths’ de-identified customer data, gleaned from its 8 million Everyday Rewards customer loyalty cards, credit and debit cards, to improve services to a wide range of clients including eBay, IAG, Telstra, Suncorp and Qantas.
The equity stake in Quantium reflects Woolworth’s CEO Grant O’Brien’s strategy to put in place “growth enablers” by using customer insights to tailor its product range and come up with more effective promotions and marketing programs. Woolworths plans to double the size of its customer analytics team, based at its Norwest headquarters to 35, and will use Quantium’s data, analytical, media and software services to boost its existing customer analytics capabilities. Three of Woolworths’ most senior executives – finance director Tom Pockett, supermarkets managing director Tjeerd Jegen and head of logistics and multi-channel retailing, Penny Winn – will join the Quantium board.
Woolworth’s competitior, Coles Supermarket relaunched its customer loyalty scheme, FlyBuys, with 5 million members, a year ago with the help of an expert analytics team brought in from the UK. Coles has used information gleaned from big data to pick the best locations to build expensive supermarkets. Some US retailers, such as Target, now determine when customers are pregnant based on their shopping baskets before sending them personalised catalogues.
The deal is similar to Tesco’s relationship with dunnhumby, which analyses check-out till data captured through the Tesco Clubcard to access the shopping behaviour, purchasing patterns, and trends of millions of households worldwide. Through the scheme, it is estimated that Dunnhumby has helped save Tesco around £350m a year since the two firms began collaborating.
Quantium director Tony Davis told Adnews that “the Woolworths deal with Quantium is Dunnhumby “version 3.0” because it will cast much wider, overlaying feeds from purchasing data in the Woolworths Everyday Rewards program along with Quantium’s exclusive contract with NAB to mine its credit card transactions and data from other clients.
As part of the terms of the deal, management autonomy remains with Quantium’s founders and the retail giant gets no “privileged” access to information. But it will be using Quantium’s IP and people to advance its use of data and provide insights to packaged goods suppliers on new opportunities.
“This is version 3.0 of what Dunnhumby did. It’s about understanding customer behaviour across baskets of products but also broader retail behaviour. And potentially it might help us understand behaviour in other categories – media consumption, telco activity – and bring additional views of how consumers are behaving at an aggregated level.” Tony Davis said. He also said “The agency world is still, in my view, not fully getting to grips with data and analytics,” he said. “Some of them are making good progress but they haven’t been among the groups talking to us.”
Quantium will remain a separate company but will take over the management of around 20 Woolworths employees. All aspects of Quantium’s strategy, executive management and client offerings will remain unchanged.
Quantium is an Australian company that has developed globally renowned customer, market and financial analytics solutions for blue-chip Australian and International organisations. The company enables progressive businesses to capitalise on the value of their data and to leverage Quantium’s data expertise to create strategic advantage.
Quantium is a leader in the formulation of Big Data strategy; business intelligence; customer and marketing strategy; market and competitive intelligence and financial analysis.
Quantium was founded in 2002 by Directors Tony Davis, Greg Schneider and Adam Driussi and today employs 200 people in Sydney, Melbourne, Brisbane and Hyderabad, India. At its founding, Quantium offered actuarial consulting, which helps insurance companies assess risk. However, as more and better data about consumer behaviour became available, its client list has swelled into new categories including corporate clients such as NAB, Qantas and David Jones in addition to Woolworths.