The evolving world of consumer data: an interview with Clive Humby

One half of the former dunnhumby team tells Computing his views on the consumer data landscape

Co-founder of dunnhumby, the company behind Tesco's Clubcard and other loyalty programmes around the world, Clive Humby gives his views on the consumer data landscape.

Computing: We investigated whether Tesco would be able to use data to exploit consumers, is this a possibility?

Humby: There is the ‘Fair Data' initiative that the Market Research Society has launched, which I am a patron for. This is about using the data for mutual benefit and the way Tesco deals with that is that it has a Clubcard charter that details what it will or won't do with the data.

I think anything someone does with data that involves a consumer must be consent-led, and that's really what the ‘Fair Data' initiative is about and what having a charter is about. We really encourage companies to have a customer charter. Inevitably there will be grey areas, and in those grey areas companies might try or test things out, but if it's going to be big you have a duty to share that with consumers. As soon as you lose consumers' trust it is the worst thing for your business.

For example, banks have lost their consumer trust because as a loyal customer I get the worst interest rate, pay the highest prices, and get bombarded with irrelevant messages because their objective is to sell, not to build a relationship. Even the high net worth banks like Coutts are falling down this path. Banks are a living example of how not to use data.

Could companies like Tesco put these terms into the small print rather than make the terms clear to the consumer up front?

Small print is always a risk, the nice thing about Tesco's charter is that it's a single piece of A4 folded, and it's in big type that I can read without glasses. I think when you get 42 pages of fine print every time you want to buy something; we're not going to do it.

[The problem is] that most departments in organisations think about protection risk terms, not consumer engagement terms.

Can Tesco use the data of a customer who is buying four bottles of vodka and reflect this on the way they offer health insurance to that customer?

Tesco has said in its charter that it won't, and that it will respect your data and won't judge you. You may be buying the alcohol because you're actually a dodgy pub landlord and it's cheaper to buy vodka from Tesco's than a supplier. You've not necessarily got all of the context, it's not a retailer's job to be a policeman of good health. I don't think they have a duty to intervene.

The evolving world of consumer data: an interview with Clive Humby

One half of the former dunnhumby team tells Computing his views on the consumer data landscape

With all these new channels that the likes of Tesco are incorporating, with Blinkbox and Clubcard TV and so on, isn't there more of a chance of them understanding the "context" behind a person's habits and target them?

The question is, are you creating a relationship where both parties are winning? I would argue that in terms of alcohol it would be irresponsible to target a promotion at a heavy drinker and in fact perhaps they should be excluded from promotional activity but I don't think it should affect what a retailer buys and sells an individual, because it is your right to buy.

What about new mobile platforms that are being talked about for payments, such as barcodes that suppliers will use? Instead of using loyalty card or offers from Tesco, suppliers such as Coca-Cola will work directly with the scanning technology providers - and therefore effectively take out the retailer as a middle man. Do you think this is something that will happen?

I think that this will emerge. I think that increasingly brands will want to spend their promotional budget directly on their consumers rather than by the retailer and I think the smartphone technology is going to make that a reality over the next three or four years.

Do you think that owners of point-of-sale (POS) systems that may currently accept contactless payments should be scared by the rise in this type of mobile platform?

Yes, there is a mad rush to own the customer, and I think this is wonderful because it gives consumers the power back. I might sign up for a particular app that does it one way, and someone else signs up with another app that does it another way, while someone else might want to be anonymous and get promotions the old fashioned way and that's fantastic.

Do you think near-field communications (NFC) will take off?

I think contactless payments will be big [but I am unsure about NFC]. There have been a lot of experiments, for example Boots tried out touching in and out and there have been experiments with smart trolleys, but I think they are all a bit fanciful. The question is, does the consumer want it? In theory, you could have a trolley that you're using and it will say ‘you've just missed your favourite mayonnaise and it's on promotion' but actually I missed it for a reason. It's a bit like FourSquare, which is great as a novelty, but it becomes really annoying when you're rushing to a meeting and you're getting notifications and you get your phone out and it says there is an offer for a Starbucks right near you, as you're running in to work.

Technology bluntly applied is terrible; the real trick is using it well. Just because you can doesn't mean you should.

Humby was talking to Computing at the Atheon Trade Relationship Revolution event in London.