Data capital: Turning 1-0-1-0-1-0 into ‘ho-ho-ho’ for Christmas

Once upon a time, all Santa Claus needed in the run up to Christmas Eve was a sleigh, a herd of reindeer, and a workshop full of elves in order to spread his magic. Now, he could do with a computer science degree too.

Data has becomeall-pervading – Father Christmas needs to be able to handle the geo-spatial locations of everybody who’s been naughty and nice; analyse the supply and demand patterns generated by all the letters sent to the North Pole, and understand footfall patterns on the high street to stop him doubling up his presents with Aunt Gladys’ gifts on Christmas morning. It’s enough to make jolly old Saint Nicholas hit the sherry early.

Fortunately, retailers and councils have help at hand, allowing them to understand data in the run-up to Christmas. By analysing information about purchasing habits, travel routes, and disposable income, shops and local authorities are able to plan exactly where to put Santa’s grotto in order to generate the highest footfall and keep the tills ringing along to the cheesy Christmas pop songs blasting out the speakers.

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Clive Hall and his business partner, Paul Saunders, have built their company, Place Informatics, around analysing global positioning system (GPS) data from mobile phones. If Android and Apple users have agreed to share the location of their phone then their anonymised GPS data becomes available for analysis.

Image: Adobe Stock

“One of the simplest examples of GPS data being used is in car navigation apps,” says Hall. “We receive GPS data, but we don’t get any information about who owns the phone – it’s an anonymised and very discreet dataset.”

The company can infer in which postcode the phone’s user lives and can then begin to analyse whether they’ve made a one-off journey or if there’s a pattern to their GPS data. Knowing the phone’s usual postcode means links can be made to wider sets of data about income levels and other useful information.

While data about a single phone is of limited use, when multiple phones from a postcode are spotted then Place Informatics can start to analyse patterns. That information is valuable to local councils and the companies that operate shopping centres or retail parks.

Hall says: “For example, if Edinburgh city centre usually attracts 50 people, but an event in the summer attracted more visitors from postcodes in the north-east and north-west of England, then you could decide to advertise your Christmas events in those postcodes with that travel history. After Christmas, you could then evaluate the different GPS datasets again, including dwell time and visit frequency, and analyse whether your event attracted your target audience or not.”

Councils can also use Place Informatics’ analysis of GPS data to decide where to place Christmas attractions, such as Santa’s grotto. A council could place an attraction in an area that’s already popular to maximise footfall or it could place it on a quieter street to spread the benefits of visitors around the town or city.

“From a safety and resourcing perspective, when events take place in green spaces, organisers can use GPS data to look at the most popular paths and then safety check all trees and their branches along those paths, rather than all of the trees in a forest,” Hall says. “While organisers may want everyone to park in the designated car parks for events, we all know that people will park in other places too, so GPS data can help to identify other popular parking places in the surrounding areas, which can help with controlling crowds or erecting barriers and gates for ticketed events.”

Retail chains can also use GPS data to look at conversion rates for their individual stores. If lots of people are still passing by the front of a shop but its revenues are down then managers can look at factors such as window displays or special offers to entice customers inside.

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Another company at the forefront of helping councils and retailers to analyse data is Perth-based Miconex, which launched its Town & City Gift Cards – the UK’s first city-wide gift card programme – in 2015, and has now seen the scheme spread to 160 locations in the UK and North America. Shoppers can use the gift cards at multiple stores in their communities, helping to keep cash within the local economy and supporting many independent businesses.

Miconex then launched its “Mi Rewards” digital loyalty scheme in Perth in 2018. The scheme is tied to customers’ debit and credit cards, allowing them to earn points each time they shop – and also generating anonymised data about their spending habits.

“Using data to understand your customers is really important when it comes to marketing a town or city centre,” says managing director Colin Munro, who founded Miconex in 2010. “If we were running an online marketplace then we would know everything about our customers and we would treat each of them differently.

“In a physical location, that’s historically been very difficult – you might know footfall levels, but you won’t know why the person was there, which stores they visited, how frequently they come, or their lifetime value as a customer. With Mi Rewards, you can start to measure these things, which gives you the opportunity to tailor your marketing messages to different types of customers.

“You could send one message to more affluent customers in rural areas to tempt them into the city, and a different message to local people living in the city to remind them about events. The best time to look at the data is before you start spending money – look at who you’re trying to reach and then use the data to influence how you spend your marketing budget.”

Some 10 per cent of Perth’s population is signed up to the Fair City’s Mi Rewards scheme, giving the local council a level of insight never seen. “Perth is ahead of the game because it’s using this data,” says Munro.

For example, shoppers visiting Perth during the week can receive emails or push notifications on their mobile phones to thank them for their visit and to let them know about public events taking place in the city that coming weekend. “The open rate on those emails is really high because it’s relevant information,” Munro adds.

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Data is also allowing Miconex to give its corporate customers insights into how they can reward their employees. Research carried out by the firm found that 53.8 per cent of staff would prefer a gift card as an incentive, compared to 33.1 per cent wanting cash, and 9.4 per cent preferring social events.

“Many employees felt cash would just be swallowed up in day-to-day household spending, and that social events felt frivolous during the cost-of-living crisis,” says Munro. “They felt a gift card that they could spend at a choice of local shops was special, even if they used it to buy something practical, instead of a treat for themselves.”

The next step for Miconex is further expansion in North America. The company is already operating in both Canada and the US, and has recently opened an office in Ontario.

“North America isn’t as advanced in its use of data as you might think,” says Munro. “Our gift cards are already proving popular, so the next step is to launch our Mi Rewards programme next year because we’ve seen that there’s demand from our customers for the scheme and the data it generates.”