Sainsbury's Is Using Big Data and Analytics to Drive Its Digital Strategy

It's hard to open a newspaper these days without seeing some article or another about data.

Whether it's another thrilling expose of a Cambridge Analytica type firm using social media data to swing elections and referenda, or some new piece of regulation coming from the lawmakers in Brussels, data has never been such a hot button issue as it is now.

While it may seem data is constantly being discussed in a negative light, responsible companies should not be discouraged from using it to help them better understand their customers and drive new experiences and sales.

This is exactly what supermarket brand Sainsbury's (and its Argos subsidiary) is doing by putting data and analytics at the forefront of its digital transformation strategy.

Loyalty Schemes

One advantage supermarkets have over other retailers is found in their loyalty card schemes. Whether it's Tesco's Clubcard, Morrisons' More, or Sainsbury's Nectar Cards, most of the big-name supermarkets have some form of loyalty programme to keep customers coming back.

While their ability to foster loyalty is indeed desirable, the best thing about these schemes from a marketing perspective is the enormous amount of data they gather. Through their use, retailers such as Sainsbury's can discover when people are shopping, what they're buying, and where they are shopping, in terms of both store locations and brick and mortar vs online.

With this data in hand, Sainsbury's can deliver bespoke offers, ads, and promotions at the times when they are likely to be most useful to the customer, creating the highest probability of increased spending.

"As a business we are creating new data all the time. New businesses are being created, new ways of customer shopping," said Sainsbury's Chief Data Officer, Helen Hunter. "But wouldn't it be great if we could stitch together what Nectar understands about how customers travel from the Nectar travel partners, how the bank can understand who's using travel money, how Argos can understand who's buying luggage, and how Sainsbury's food can understand who's buying a load of sun cream? Surely there's something in that which can really have meaning if we join it up."

Nectar Cards

Sainsbury's has already been putting this philosophy to the test with trials of a new omnichannel method of delivering rewards to Nectar Card members in the Isle of White.

Under the new scheme, Nectar Card members who have the Nectar app installed on their smartphones can receive additional points when they shop. The twist is that they receive these bonus points based not just on what they buy, but also on how frequently they shop at Sainsbury's and how long they spend in the store during each visit. Customers can also choose their own custom offers online or through the Nectar app from a bespoke curated list based on the products they buy most often. They can then earn bonus points on those items rather than on total spend.

The new omnichannel Nectar system has also made it possible to fully integrate subsidiary Argos into the scheme. Now, Argos customers can receive offers and promotions which are more relevant to them, and, as of Black Friday 2018, can redeem Nectar points against Argos purchases made online - something which was only previously possible when shopping in-store.

"We tend to talk a lot about the marketing use cases but simple things - like understanding who's using Argos home delivery versus who's using Sainsbury's grocery delivery versus who's using our one-hour delivery proposition or smart shop proposition - that's just quite useful from an insight point of view to help the business inform its proposition development," added Hunter.

Final Thoughts

Supermarket loyalty schemes offer a great way to gather data which can then be turned to promote the brand, benefit the customer, and drive increased revenue. The new omnichannel Nectar Card programme being put forwards by Sainsbury's is an elegant demonstration of this. With a new way of delivering additional points, customers can be incentivised to shop more frequently and spend longer in store when they do.

Additionally, improved synergy with the Argos brand gives customers and Sainsbury's even more chances to benefit.

You can hear Sainsbury's Argos's Head of Digital Product Development, Melissa Dunn, speak at eTail Europe 2019, taking place in June at the QEII Centre, Westminster, London.

Download the agenda today for more information and insights.