Dunnhumby buys ad tech firm as Tesco pinpoints personalisation

UK retailer Tesco's focus on personalising customer communication and improving shoppers' online experience has this week been accelerated by data-mining subsidiary dunnhumby's acquisition of ad technology firm Sociomantic Labs.

The CEO of dunnhumby, Simon Hay, said on Thursday that Tesco will be able to combine the Berlin-based company's digital advertising technology and real-time data from 700 million online customers with its own extensive shopper information to improve how advertising is planned, personalised and analysed.

Sociomantic Labs, which employs more than 200 people in 16 offices worldwide, generated over $100 million in revenue in 2013. The firm works with brands in electronics, retail, fashion and travel services, and has apparently been on dunnhumby's radar for some time.

"Our strategic priority is to engage consumers and earn their loyalty wherever they shop, in-store and online, with personalised communications that are valuable and meaningful," explained Hay.

"Applying this approach to make online media a better experience for consumers and marketers is paramount to us. Our observed campaigns to date have shown that increased relevance leads to significantly better engagement and response rates."

Commenting further on the Tesco Talking Shop blog, the CEO indicated that the new technology will be used to ensure customers only see relevant content that is based on their shopping habits and behaviours, as well as informing advertisers on how best to target consumers.

"The real benefit though must be to customers whose online experience will get richer, simpler and more enjoyable," he added.

"The free internet content we enjoy today is paid for by advertising, we just want to make it advertising offers and content you will enjoy, too."

Essential Retail recently hosted a roundtable event on customer loyalty, which focused on the importance of using data to reward loyal customers and personalise shopper messages.

Leading retailers, including Sainsbury's, Homebase, eBay and Tesco, were represented at the event, with all participants in the discussion in agreement that monitoring customer data is at the heart of any successful retail loyalty strategy.

Katie Garrick, Tesco Clubcard strategy & development manager, spoke about the importance of demonstrating value to customers, and suggested that improving personalisation has been a key area of focus at the supermarket group for some time.

"It's about how you use the data to know what is important to customers and then pulling that out and recognising it changes throughout the year," she explained.

With dunnhumby's acquisition of Sociomantic Labs, Tesco's quest to improve personalisation will inevitably continue – and the coming together of the two businesses will now give the retailer an opportunity to create targeted messaging on what Hay has described as an "unprecedented" scale.

Sociomantic currently works with eCommerce marketers in more than 60 markets across six continents, with its existing international customers including Forever 21, Hilton and Office Shoes. Last month, it opened its latest office in Istanbul, Turkey.

Tesco's dunnhumby already holds insights on around 430 million shoppers worldwide.

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