May 24th, 2011 by Lloyd Gofton
If you’re not familiar with Dunnhumby, it was acquired by Tesco not so long ago , and this isn’t the first acquisition by Dunnhumby. It purchased KSS Retail, a US price-modelling company, in early 2010 which offers a clue to what it is doing.
So, far from being a new diversification into a different market, which Tesco is well known for, this acquisition is in fact to strengthen Tesco’s loyalty and consumer comms/research and product marketing.
After all, Dunnhumby was the power behind the Tesco loyalty card which revolutionised retail in the 90s, and more precisely customer data, and has continued to keep Tesco’s grip on UK retail strong and forward-facing.
The trend of purchasing U.S. organisations is likely to be a planned strategy as Tesco has had its sights trained firmly on the U.S market for some time, and current stores on the other side of the Atlantic are doing well in a tough climate.
Bzzagent describes itself as a word of mouth agent that uses 800,000 BzzAgents (advocates), who are basically people that compete to be first in line to try free or discounted products to build awareness, make recommendations, talk about brands and ultimately drive sales.
By combining the data wealth of Dunnhumby, with the social intelligence and reach of Bzzagent, Tesco is clearly making a move for the social consumer and it seems to be well ahead of its competitors in this endeavour. Combining data with social knowledge and experience is a powerful advantage for Tesco, and this could be money well spent if it can make significant returns from social conversation and product marketing and sales.