Thursday, September 11, 2008

╠ Insight - Woolworths Credit Card ╣

Intro
When I was first getting into the marketing blog scene I noticed that everyone took a sort of different approach to what I did. Everyone else focused more on insights on any form of marketing. I avoided this because I never suspected myself to have insight on such things. However today I found myself actually pondering something worthy of such a blog and figured it was worth putting here. I think this is all more of a frame of mind, if you keep your mind open to such things they are all around, and the more I involve myself in this hopefully the more insights I will have. Anyway on with the insight.

As some of you may know I work for Dick Smith Electronics, which is a subdivision of Woolworths. Overall my opinion of Woolworths has been quite low with my dealings inside the business. They don't take care of their staff overly well. However their new venture in that of the credit card.

The first thing that has to be pointed out about the credit card is that it is in no way a supermarket trying to become a bank. In fact the card itself is linked to HSBC so they aren't actually taking care of that side.

The power in this card is the market research that will now be at Woolworths fingertips. From every sale at their store they will be able to track everything that you buy on the card which allows customer tracking like never before. In the past you could always see what someone was buying but now you can track that same consumer unobtrusively.

Visit Frequency
From this card you can track regularity of visits, you can find which people return each week, people who return only for certain sales, people who only shop when the weather is nice, people who shop determined on how much they bought in their previous shop etc. Of course all of this depends on having brand loyalty to woolworths. However woolworths are offering double points on when you shop with them and triple if you buy their products which is quite an incentive which itself helps for that loyalty.

Purchase tracking
Also with each visit you can keep tracking items which people buy and as such develop the lists of what items consist of that customers staples and what are irregular purchases. This could be incredibly useful for working out sales or just base prices.

Say you value Tim Tams at $2 and will buy them only when at or below this price and lets assume that's below their normal cost. By repeated sales eventually Woolworths would be able to discover this. Now say their are 100,000 people out there that have varying levels of what they value tim tams at. From this Woolworths could discover the perfect sale amount in order to sell the exact amount they want and get the highest price to do so. Including this with the previous ability to determine when people shop and you just have to start wondering just how much control the consumer has on their actions and how much power this market research can have on people.

Woolworths have the power to control peoples sales unlike any other competitor in the Australian market. With this they can set their base prices, sales value and time with incredible effectiveness.

That being said this is only if they utilize this. As I said before I don't have the greatest respect for them, however the potential here is amazing, and as such I hope they do use it. Anyway I hope I've put forward my excitement about the possibilities that this card represents and somehow at least intrgiued a few of you.

Other Gruen News
Now back onto the normal stuff. I'm really busy this coming week with assignments as well as Manifest stuff so the Commonwealth breakdown may still be delayed a bit but I now have the Sony ad to do after that and now here's a new series of ads to vote on for after these two. The choices are as follows

Optus - End of Time (Advert with various clocks lacking time and an elephant for some reason)

Birdseye - Exaggerator (Mates eating chips discussing getting back from a footy match with one hugely exaggerating everything)

Vodafone - Take Everything With you (Guy getting ready to leave folds up his life and puts it in his pocket)

Votes are heavily appreciated. Also if you have any comments on anything just leave them below. Once again thankyou all for your time.

5 comments:

Tim said...

Hi Tannie,

Good post. Have you considered the fact that Coles have had this same data from FlyBuys since 1993 and that they have over 2 million Source credit cards in the market in partnership with GE Money?

They have exactly the same opportunity you outline here.

Cheers, Tim

Interest declared - I help Woolies with their blog

Tannie said...

Oh right I forgot such ventures as flybuys. Although I believe that this credit card is still a large step up in usefulness on flybuys. Flybuys only really applies to those who either fly regularly enough to get the flybuys benefit or at least believe that they will fly enough to make use of the card. This is a relatively baseless assumption but I think that there is value in the accuracy to be gained in not simply targeting those linked to flying.

This credit card is basically for any woolworths regular who isn't afraid of credit cards, and since the fear of credit isn't something as linked to a certain demographic as flying is I think it still gives them the edge.

This all makes me realize that I should perhaps research everything a bit further since I hadn't factored in that Coles may have partnerships to gain the same data.

However I doubt Woolworhts would change from having the GE setup for no real reason. Their must be some gain be it in greater freedom with the data or simply by reduction in cost of gathering data.

None the less thankyou for the comment. You've made me think more in depth on the matter and also pointed out my need for further study in the future which shall greatly help me with future posts.

tina said...

I think whatever credit card you plan on applying for it is wise to consider your options and be sure you can actually afford to own it. Also check out price comparison websites to ensure you find yourself the best deal possible.

Peter Wagstaff said...

Hi Tannie,

I just discovered your blog, after following a link from Julian Cole... nice work!

Something that amazes me about Woolies new card is that they launched it one week AFTER announcing their new logo, but the card still has the OLD logo on it... what are they doing?

Looking forward to reading more of your ideas.

Wags.

Tannie said...

Wow...never imagine I would be getting referrals this early into my blog. Thankyou for taking the time to read my blog.

That is a very curious point you raise though. The only reason I can suggest that they may have chosen this approach is perhaps to make sure their card gets a good initial boost by using all of the brand equity held by their old logo. Other than that I would be at a loss.

Anyway thankyou again for your input.