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Social Shopping

Redistributing the value of consumer data

Can we increase the public perception of the value of collective consumer datasets by decreasing the friction in donating to food banks?

Consumer Data | Food Poverty | Design Challenge | High Street Precedent

Context

UK high street shoppers are inundated with company loyalty cards, 95% of the British population holding one (Christie, 2014). These offer a certain number of rewards points against the value of a transaction, which can later be redeemed in store against future purchases.Intelligent in their design, they offer the illusion of paying us for a brand loyalty, when in fact the value offered on the piece of paper is truly a virtual currency. Only redeemable at the store that issued it, it has no real value until it is claimed, with all money being retained with the issuing parties ecosystem.

There is an estimated £billions of issued reward card points being unused every year, with an average £28.60 of points on each reward card in the UK (Grimsey 2012, Christie 2014). This could be because the value of the reward is often so minimal i.e. save £0.16 off your next shop, the time period of use is not immediate with redeemable vouchers often being valid for the next day, and finally the perceived value of the reward points can be very abstracted, i.e. you have been rewarded 23 points for this transaction. Although the stores advertise what each point is worth, in the case of Tesco 150 points are worth £1.50, there is possibly a break in the cognitive connection between points and value can account for such a gap between the total financial worth of rewards being issued and those being redeemed.

Boots, however, print on their receipts the amount that transaction is worth in pence; you now have in your hand a piece of paper whose value explicitly expressed in a recognisable currency amount. As a shopper you have a printed record of the value of your consumer data in the transaction, or more accurately the amount Boots are prepared to pay you to mine your consumer habits.


The Value of Consumer Data

tesco

Dave McCarthy, an analyst at HSBC, estimates that Clubcard costs Tesco £500m a year (Ruddick 2014), comprised of vouchers issued valued at upward of £200m, the cost of each physical card approx. 11p per card, and the loyalty letters sent to 10m Clubcard homes
four times a year, that receive no subsidies from Royal Mail. ((Humby et al. 2008, Guardian 2003)

However Tesco recuperates some of its costs through selling ammonized customer data to its suppliers, with Dunnhumby generating £53 million in profits for Tesco in 2012. (Platt et al, 2014). Tesco works with its Dunnhumby business unit to build a big-data business that analyzes millions of customer transactions and sells the resulting insights about shopping behavior (but not customer-level data) to major manufacturers, including Unilever, Nestlé, and Heinz. The anonymous data can pinpoint spending habits down to the level of postal area, identifying which groups of residents buy, for example, the most wine, chocolate, or organic food.

Dunnhumby’s website (http://www.dunnhumby. com) states: ‘We have access to the shopping behaviour of 13million households, with item- level purchase data from Tesco Clubcard. This helps manufacturers to understand the purchase decisions and habits of customers better than anyone else.’ ‘Dunnhumby uses this anonymous data to develop insight into how customers shop and it is this insight, not individual customer data, which they market to Tesco’s suppliers.’ The Clubcard data also helps Tesco run its business more efficiently. Tracking Clubcard purchases helped uncover price elasticities and set promotional schedules saving over £280 million, because the Clubcard information allows it to only stock products that will sell in vast quantities (Kotler 2009).

Examples of retailers using loyalty cards and they value they pay their consumer for their transaction data.

• Tesco one point per £1 spent and 150 points are worth £1.50
• Boots four points per £1 spent and each point is worth a penny
• Sainsburys (Nectar) two points per £1 spent 500 Nectar points are worth £2.50
• John Lewis one point per £1 spent and 500 points are worth £5
• Waitrose one point per £1 spent and 500 points are worth £5
• Superdrug one point per £1 spent and 100 points are with £1
• Waterstones three points per £1 spent and each point is worth 1p
• Costa five points per £1 and each point is worth 1p
• Game 2% of purchase value is given in points and every 400 points is worth £1


Food Poverty

food

At the same time that £billions is being wasted on the high street in unclaimed reward points, 13 million people (1 in 5) live below the poverty line in the UK. The Trussell Trust (2014) in their report identify that many families hit crisis and cannot afford food and today people are going hungry in their own homes. Rising food and fuel prices, static incomes, high unemployment and changes to benefits are causing many families to struggle to put food on the table.

The economic downturn and its aftermath have seen the need for food banks soar nationwide. New food banks are opening at the rate of two a week and numbers of people given three days’ emergency food by Trussell Trust food banks rose from almost 350,000 in 2012/13 to over 900,000 in 2013/14.

 

How a Food Bank Works

Food is donated
The main way that food is donated is though ‘Supermarket Collections’. These collections engage the public at supermarkets where they are met by volunteers who give them a ‘food bank’s shopping list’ and ask them to buy an extra item with their shop, which is then donated to the food bank. Schools, churches, businesses and individuals also donate non-perishable, in- date food to the food bank. All food given out by food banks is donated.

Food is sorted and stored
Once collected, volunteers sort the food and check that it’s in date and then pack it into boxes ready to be given to people in need.

Frontline professionals identify people in need
Care professionals such as doctors, health visitors, social workers, Citizens Advice Bureau staff, welfare officers, the police and probation officers amongst others identify people in crisis and issue them with a food bank voucher.

Clients receive food
Food bank clients bring their voucher to a food bank centre where it can be exchanged for three days supply of emergency food. Volunteers meet clients over a cup of tea or free hot meal and are able to signpost people to agencies able to solve the longer- term problem.


Design Challenges and Frictions

Examining the current food bank donation model we can identify the following design challenges / frictions.
• Food bank volunteers have to intercept and persuade shoppers to purchase an item, at a cost on top of their weekly shop.
• Food banks have to wait for items to be donated.
• Food banks have to check that the items donated are not past their use by date.
• Food banks have no way of controlling what is donated. Supply verses need.
• As a donator I am unaware of what requirements
the food bank has, or I have to remember to download each food bank’s shopping list before I go shopping.
• As a donator I have to travel to my food bank to donate.
• As a consumer am I aware of food banks in my area, and their need.

 

Proposed Design Intervention

Social shopping is a smart phone application, Design and accompanying website, which allows Intervention shoppers to donate their supermarket reward points to food banks.

At the point of checkout an additional till receipt is printed, which has a unique barcode. This barcode identifies the merchant, rewards account number, and transaction reward value. The use of unique barcodes on till receipts in conjunction with redeemable offers is already commonplace in the supermarkets.

After a one-time setup of their customer details within the application, the shopper would be able to scan the barcode, and then allocate those points to a food bank of their choosing.

The transaction would then be validated against the supermarkets records and the reward points reassigned from the shoppers account to the food banks.

The use of a till receipt automatically acts as publicity material for those unaware of the project. It also allows the shopper to have the choice as to whether the want that particular transaction’s reward points to be donated or not. For instance the shopper may wish to keep the points for a high value transaction where the gain for them is significant, but would equally be happy reassigning a minimal number of points from a low value transaction.

Even if, for instance, Social Shopping was to attract just 0.5% donation rate of the yearly value of Clubcard reward points transactions (£200m), then the projected income for food banks would be estimated at £1million.

According the to the Trussell Trust:
• £50 could pay for fresh food for 1 month
• £200 could setst up a basic bank in a needy area
• £1000 could help expand the number of areas covered by basic banks


Consumers Precedent for Social Shopping

itison

Yunus (2009) describes the idea of a ‘Social Business’, creating a business not for the traditional purpose of making money, but for solving social challenges. The high street is slowly adopting this business model and reacting to the consumer’s desire to choosing socially responsible shopping experiences.

Social Bite (www.socialbite.co.uk) offers ‘Suspended Coffee and Food’, which means that their customers can pay in advance for
a coffee or any item of food from their menu, and a local homeless person can come into their shop to claim it. They currently provide nutritious food and hot drinks to over 30 homeless people in each of their four shop locations, who visit them on a daily basis and get a filling sandwich, hot bowl of soup or a coffee as a direct consequence of the public’s kindness.

As part of their Christmas campaign Social bite offered a £5 by a homeless person Christmas lunch ITISON deal. The target was initially set at 800 meals but by its conclusion, after trending on Twitter and Facebook, saw more than 36000 meals sold.

 

Supermarkets precedent for donating to charities

waitrose

Waitrose, Community Matters. At the end of the shop in a Waitrose branch, the for donating customer receives a token to place in the box of to charities the good cause they’d like to support. The more token a cause gets, the bigger the donation they receive. Each month every Waitrose branch donates £1,000 (£500 in Convenience shops) between 3 local good causes chosen by their customers. This is also replicated online at Waitrose.com 3 national causes share a donation of £25,000 voted on after the customer checkouts, and since its launch in 2008, the scheme has donated £14 million to local charities.

A similar scheme also runs in Asda’s stores.