Figuring out what shoppers want and how much they’ll pay for it – it’s not rocket science, right? Well, at dunnhumbyUSA, it is.
From their new downtown Third Street headquarters is the beating heart of dunnhumbyUSA, one of Cincinnati’s fastest growing companies. That’s where more than approximately 300 servers cradle more than 600 terabytes of information about shoppers’ purchases, making it one of the largest retail databases in America.
The information is painstakingly collected every day through a sophisticated process and ultimately used by major retailers to guide their decision making and boost sales. That data is a big reason why dunnhumbyUSA has grown from four people in 2003 to more than 400 today and is still growing. By finding out precisely what consumers buy, dunnhumby can then target them with promotions and coupons for things they actually want, driving sales for their retail clients by engaging the consumers.
The merger of Edwina Dunn and Clive Humby (they’re married) in the UK led to the creation of London-based dunnhumby in 1989. They scored a big client when they landed UK supermarket giant Tesco, who asked them to create a loyalty card plan and help them increase sales. It worked.
Over in the U.S., Cincinnati-based Kroger, this country’s largest grocer, took note. In 2003, dunnhumby began working with Kroger in a joint venture called dunnhumbyUSA. Kroger is, subsequently, part owner of dunnhumbyUSA and at the same time its biggest client. Today, about 40 percent of U.S. households hold at least one of Kroger’s frequent shopper cards and the venture is serving other major retailers, including home improvement giant Home Depot.
“At dunnhumby, we're passionate about putting the customer at the heart of everything we do, including how we work together," notes Stuart Aitken, CEO of dunnhumbyUSA. "Our new headquarters in Downtown Cincinnati is a product of that passion; it's an open workspace that encourages a collaborative environment, a high-level of energy and even some fun along the way. We are fortunate to have found a location that provides high visibility and proximity to both current and potential partners.”
Dunnhumby has raised consumer research to a science. In the old days, it could take six months of collecting purchasing data to figure out whether a new product would succeed. Now they apply complex mathematical formulas to analyze and predict how consumers will respond to products. It’s the same type of math used by scientists mapping the human genome or plotting the paths of rockets so they hit their targets.
Yes, this IS rocket science.
Writer: David Holthaus