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Technology

New technologies and adoption trends that influence IT strategy, and the issues and opportunities they represent.

Loblaw’s Big Data Play

Loblaw and Shoppers logosMake no mistake about it, Big Data played no small role in the recent $12.5B acquisition of Canada’s largest retail pharmacy chain, Shoppers Drug Mart, by Canadian retail giant Loblaw. And while there have been many mergers and acquisitions involving actual Big Data companies in recent years, the Loblaw deal is perhaps the biggest Canadian corporate merger to have been driven, to a significant degree, by Big Data itself and the means of obtaining that data.

What Loblaw covets is Shoppers’ Optimum loyalty program, which market research firm Environics ranks as the second most popular in the country, with 10 million members. That means detailed data on the shopping habits and preferences of 10 million Canadians, many of whom are in key demographic categories: teens and twenties, interested in Shoppers’ extensive cosmetics and personal grooming lines, and seniors, a growing demographic fueled by the aging Boomer generation.

It is perhaps no coincidence that Loblaw is beefing up its Big Data capabilities at the same time that giant US retailer Target – famous for its ability to leverage Big Data in its retail strategies – is rapidly expanding into Canada.

While Loblaw says it has no plans to merge Optimum with its own smart-phone based PC Plus loyalty program, the company will no doubt have many ways to leverage Shoppers’ loyalty data and expertise. And it is not hard to envision a future in which offers for both brands are pushed out to the combined loyalty base.

Speaking of loyalty, Loblaw also loves the fact that Shoppers has a strong social media presence. With over 650,000 likes, the company’s Facebook community is ranked number three among Canadian retailers, and its Twitter following is now over 18,000, compared to fewer than 2,000 for Loblaw.

The Loblaw acquisition should send a loud and clear message to the executive teams at mid-sized and larger companies, and perhaps especially to CIOs. Not only is Big Data an indispensible tool for growing the business -- providing CIOs with an opportunity to assert themselves in business strategy -- it can also figure prominently in the perceived value of the company, and hence its evolution in the marketplace.

In the next few years we can expect to see many more mergers that are driven in part by Big Data. This trend will gain momentum in lock step with the growth and maturity of corporate Big Data repositories and the analytics and processes that have been put in place to derive value from them.

The CIO has a key role to play here. If you haven’t yet started paying this aspect of your business the attention it deserves, start now – or prepare to become Big Data road kill. Want to learn more? Check out the CIO Roundtable section of our Video Gallery for a wealth of CIO peer advice on implementing Big Data solutions.

 

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ADP - VP Architecture & Infrastructure

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Aimia - SVP & Global CIO

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BlackBerry - VP Corporate IT

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