Just what is the price of consumer loyalty…
Loyalty cards, a subject in which I am intensely interested, has been popping up quite a few times in the last few weeks. Specifically, I am interested in the introduction of tracking devices in supermarkets, customer profiling and loyalty schemes.
I became intrigued by this subject some months ago, when I was given a guided tour around a supermarket by a Category Manager from a large British company who specialised in the manufacture of toiletries. During our tour I asked him many questions about how supermarkets figure out what their customers want. He was more than forthcoming in spilling the beans. What started out for me as a fool’s errand, became a learning experience that left me reeling.
In days gone buy, such customer related data was simply gathered by observing stock levels, basic market research and planning your store according to what you believed would be popular with your shoppers. Not so anymore. Retailing has become an incredibly detailed science, underpinning a multi-billion pound industry. In the war of the big brand supermarkets, it is critical to have an edge on your competitors. In recent years, this edge has been the ‘loyalty scheme’.
A simple example of this is the ‘loyalty’ or ‘club card’, an object that nearly all retailers now aggressively push you to get. Recently, I was buying some groceries in a Sainsbury’s and was stared at like a eight-foot camp rasta cat rapist by the man behind the counter when I told him that no, I didn’t have a loyalty card and no, I didn’t want one. In return for my continued patronage, he told me breathlessly, I would receive bonus points, which entitled me to free gifts or discounts on in-store products. I am sure that many of you have heard this patter and that many of you have such loyalty cards.
What you are not being told, is that each time you use your loyalty card in that store, detailed records of what you buy, how often you buy it and in what bulk you buy it are being kept. Major supermarkets now have frighteningly detailed databases concerning the shopping and leisure activities of millions of customers. This information ranges from where you live and what your hobbies are, to what Ice cream you like best and, logically, an extrapolation of your disposable income.
So, what’s the problem? The problem lies in the fact that the big retailers are not stopping there. Oh no, sirree Bob. We are now witnessing the introduction of a device known as an RFID (radio frequency identification device). To quote from the dispatch at Scnews:
“RFIDs are tiny chips which can be embedded into almost anything. When a reading device is placed within 5 metres of them, they transmit their unique number to the device. The idea is that shops will use them instead of barcodes, so you just push your trolley through the checkout, and you’ll know how much you owe. “
‘No problem’ I hear you say. ‘A good anti-theft device’, you say. ‘What’s wrong with that?’ I hear you say… Well, to be blunt: plenty.
“As each chip has a unique number, if someone knows the number of the chip embedded in your shoes, for example, they will be able to track exactly what you do. So a supermarket could know when you enter their store, how long you spend in each section, and what you buy. At the recent Chinese Communist Party Congress, each delegate had to have a badge, equipped with RFID chip, that tracked them wherever they went.”
Big brother indeed. Except, that rather than a nefarious Richard Burton monitoring our every movement, instead those delightful souls in the marketing departments of our major retailers are building a detailed picture of the movements of citizens that makes the American Patriot Act look positively tame.
Which brings me to my point: the post 9/11 world is a grim, fear-ridden place. It is a world where most western democracies have made frightening sacrifices in the area of civil liberties in order to combat a phantom enemy. This is a world where ‘illegal non-combatants’ face the death sentence without ever having received legal counsel – a violation of the most basic of Human Rights under the UN charter. This is the Scared New World, where kids downloading MP3’s face a onslaught of prosecution from billionaire record companies and a world where the intellectual property rights of the Iraqi nation were re-written before anyone had even thought about drafting a constitution for the newly ‘liberated’ country. This is a world where big business and national security have been twinned in the mind-set of the conservative, reactionary governments who hold currently hold sway over most of our democracies, mostly because big business is, or has become, government.
Is it unreasonable of us to fear that this powerful tool, devised and controlled by big business, would not be manipulated and abused by right-wing administrations like the Bush White House? Is it unreasonable of us to ask if we should be concerned about possible abuses of this, and other nascent technologies, in prying into the civic space of citizens? Is it unreasonable of us to ask if our status as citizens even means anything any more, in light of the fact that our status as consumers has brought us under closer scrutiny and analysis that our roles as citizens ever did?