In a unique project funded by the Department of Agriculture and Rural Development (DARD), the Ulster Business School have teamed up with the University of Kent to give Northern Ireland (NI) farmers and small agri-food producer’s unprecedented access to sophisticated market data on consumer purchasing behaviour gathered by dunhumby, the power behind the loyalty card programme of Tesco – the UK’s biggest retailer.
The shopping habits of Tesco consumers are continually analysed by dunnhumby, one of the world’s leading data mining firms. Every purchase scanned at Tesco checkouts using their loyalty card sends real-time purchasing information to Dunnhumby, providing raw information for analysts to tell the retailing giant what’s selling and by whom – and, just as importantly, what’s not selling. Dunnhumby captures Tesco’s loyalty Clubcards data from over 1.4 million supermarket shoppers, representing 40% of UK households.
Over the past two years, 15 workshops have been delivered to small farmers and businesses in various sectors of the agri-food industry in NI, with 215 reports produced specific to each business who wants to understand their market more. For example, who is buying their product, where and when they are buying as well as more complex information about what items which are being bought together. It is clear that there have been tangible benefits for the local agri food industry which in turn is helping to strengthen the industry’s sustainability and competitiveness. Several food producers have used the data to secure contracts with the multiple retailers.
Dr Gillian Armstrong and Dr Geoff Simmons from the Ulster Business School report that the market intelligence derived from Tesco’s loyalty Clubcard data benefits primary producers and small food businesses in Northern Ireland by giving them real information on what consumers are buying, when and where. With this insight, small businesses are able to respond to consumer needs and in turn increasing profits.
“The continued success of the agri-food sector is critical for economic growth in Northern Ireland. This research is the first major research project to deal specifically with food purchasing behaviour in Northern Ireland and we are reaping the benefits of having access to such relevant and sophisticated information with clear positive results for small farmers and businesses”.
County Armagh farmer Shane Donnelly of Donnelly Horticulture is one of a growing number of Northern Ireland agri-food producers to benefit from the dunnhumby collaborative research project.
“You can be the best, grow the best, produce the best but if consumers don’t want to buy your produce, what’s the point? Finding out what people what to buy and grow produce to supply their needs is simple in theory but getting it right can have a profound impact on business success”.
In December 2008 Shane attended one of a series of workshops facilitated by PhD researcher at Ulster, Christina Donnelly. The workshops, which targeted the various agricultural sectors, were designed to illustrate how Tesco’s Clubcard data could provide a valuable insight to consumer behaviour which in turn could highlight opportunities for business improvement.
Following the workshop, Shane worked closely with the research team at Ulster specifically looking at an area of interest to his business.The insight provided by the dunnhumby data gave Shane Donnelly the confidence to invest in a new line of flowers in 2009/10. “Before we only ever grew that standard stocks and we didn’t grow any lilies and now we’re growing about 400,000 a year” (April, 2010)
Another company to benefit from dunnhumby data is Morelli’s Ice Cream. Morelli’s famous ice cream under the management of Arnaldo Morelli supplies the supermarkets. Arnaldo Morelli said: “the project enables us to access important sales information which gave us a detailed insight into our customers’ needs and expectations”.
Taking on board key feedback from the dunnhumby data, Morelli’s set about redesigning their retail packaging to match the quality of the product inside, as well as distinguishing Morelli’s from their competitors. There are many more stories of success with further examples of how this information has been used by farmers and small food producers to improve their business planning and marketing decision-making, on http://business.ulster.ac.uk/DARD/casestudies.html.
The Ulster Business School provides analysis of supermarket shopper behaviour for individual products that will reveal detailed insights into which products are growing the fastest, who is buying them, where they are buying them and what else they are buying.
The service is made available free of charge to farmers and food producers with an annual turnover of less than £10 million.
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Contact Details: Dr Gillian Armstrong, Ulster Business School, ga.armstrong@ulster.ac.uk / Tel: 028 90 368384