Spreading the analytical gospel around the world.
I’ve been accumulating lots of frequent flyer points lately traveling around the world talking about analytics. In the last month I’ve been in Europe (twice), Brazil, Mexico, Canada, and various places in the US. One thing that has occurred to me as I travel around and talk to different companies is the incredible geographic variation in analytical approaches within the same company. You find some impressive analytical work going on at corporate headquarters, and then you discover that it’s not present outside the home country—or sometimes it’s vice-versa.
I’ll give you a couple of examples. Take Tesco, for example. Based in the UK, it’s the world’s third largest retailer and has operations now in 13 other countries. With the help of consultants dunnhumby (in whom Tesco eventually bought a majority ownership share) the company pioneered the use of its loyalty card (ClubCard) data to target promotions to members. It’s been a fantastically successful program, and is responsible in large part for Tesco doubling its UK market share since ClubCard was introduced in 1995 (more on the operation and history of ClubCard here–http://en.wikipedia.org/wiki/Tesco_Clubcard)
However, there seems to be substantial variation across countries in whether ClubCard—or an equivalent program—is offered, and the extent to which data from it is used to target promotions. It’s definitely not offered in the company’s US Fresh & Easy chain, where loyalty programs are even somewhat disparaged on the website (http://www.freshandeasy.com/WhoWeAre.aspx). I heard this morning that Korea—where Tesco has a joint venture with Samsung in the Homeplus brand—is a big user of a loyalty card (Familycard) and the resulting data. I got blank looks when I mentioned ClubCard to a Tesco employee in the Czech Republic, although I suppose it could be a language problem.
Another example is Banco Santander, the Spain-based bank that is now the world’s eighth largest in terms of assets. There seems to be a lot of geographical variation there too. Last year when I visited Spain, I was told by some consultants that Santander was pretty analytical there, albeit not the market leader in that regard. I heard recently in Brazil that there wasn’t a major focus on credit card analytics. I heard in Mexico that they were quite aggressive on credit card analytics, basically emulating the very successful (in the US, at least) approaches of Capital One. I heard last week (http://www.sas.com/news/preleases/awardsSGF10.html) that Santander is doing great work in Germany on credit scoring and automated loan decision models. I have yet to hear much going on with analytics at all at Sovereign Bank, the US bank that Santander owns. As far as I can tell, the only global approach to analytics involves risk management, a consistent approach to which is somewhat mandated by Basel II regulations.
Is this geographical variation good or bad? You could argue that it’s somewhat necessary, since regulations and available information vary across the world. In Brazil, for example, there is no such thing as a credit score, which limits the ability to make loans on the basis of it.
But I’m guessing there is an opportunity to do more to standardize analytical approaches. Last week I ran into Giles Pavey, a dunnhumby executive who is “Head of Analysis.” He told me he’s spending lots of time spreading the analytical gospel around the world, particularly in the Far East. Maybe what we need more of is roles like his: “Analytical Ambassador.”
