Tesco to share shoppers’ behaviour data with tech start-ups

Retail giant Tesco plans to share data gathered from the shopping behaviour of Irish households with tech start-ups through a seed-stage investment fund launched by its daughter company Dunnhumby. The Irish data will be included in a batch of information gathered by Tesco from more than 400 million homes worldwide and will be used to design products for both the retail sector and consumers.

Over the next three years Dunnhumby Ventures plans to invest on average between $100,000 and $500,000 each in start-ups and entrepreneurs who can come up with innovative and useful ideas.

"We're interested in what technologies will shape the future of retail and we're looking for start-ups from Ireland, the US and all across the globe," said Dave Balter, global head of investments at Dunnhumby.

Founded in the UK in 1989, analytics firm Dunnhumby established Tesco's Clubcard loyalty scheme in 1994 and was bought outright by the company in 2011. Data on consumer habits is not only gathered from Tesco shoppers; it lists Coca Cola, Pepsi, Procter & Gamble and Shell among its global client base.

Dunnhumby set up its Irish office in Dublin in 2005 and now employs 35 people. Working chiefly with Tesco Ireland, it also has several other Irish clients.

Mr Balter said that all data gathered from shoppers’ behaviour in Ireland and elsewhere is anonymised and only identifies consumer types that are clustered in segments based on spending habits. This is combined with broader economic data to come up with deeper insights into why consumers buy what they do and, based on this, help retailers market more effectively.

Data, such as customer loyalty, best-selling products in certain locations and the spending patterns of various demographics is collected to provide retailers with insights into their local market.

“In terms of personally identifiable data, we are not interested in you personally but more interested in the market segmentation of, say, families with three kids.”

The anonymised data will be shared carefully – and with restrictions – with the start-ups Dunnhumby picks as partners, he explains. “We care a lot about data privacy; no one is sending around anyone’s personal data.”

There are already several companies in the Dunnhumby portfolio, including ReceiptHog, an app that encourages shoppers to snap and submit pictures of their receipts in exchange for various rewards.