Quantium shines as retailers seek big data

THE retail sector’s hunger for ‘‘big data’’ has more than tripled revenue for analytics company Quantium

THE retail sector’s hunger for intimate insights into the spending patterns of its customers, known in the trade as ‘‘big data’’, has more than tripled revenue for analytics company Quantium, enabling it to pay a $6 million dividend to shareholders including supermarket chain Woolworths.

The firm, which offers a range of customer analytical services to clients such as eBay, Telstra, Suncorp, Qantas and increasingly food and grocery manufacturers, has hit a goldmine in Australia’s $250 billion retail landscape.

Retailers are hungry for any data they can glean from shoppers to help refine their offers and gain an edge over competitors.

It is something that Woolworths has also focused on. Last year it paid $20m for a 50 per cent stake in Quantium to help augment its own customer loyalty programs and put to work the information that flows from millions of spending transactions that pass through its checkouts each week.

Woolworths’ strategic investment in Quantium has helped boost its own big data weaponry, and has been highlighted by chief executive Grant O’Brien as an important part of his plan to leverage his shoppers’ spending habits to boost sales. Tapping into the data is also crucial in the fight for ­market share with supermarket rival Coles.

Established in 2002, Quantium has benefited from an intensification of the battle for customer data, with its consulting and analytical services in huge demand — especially from the retail sector.

Documents lodged with the corporate regulator show Quantium’s revenue for 2013-14 hit $60.4m, against revenue of only $17.55m for the previous year, representing a 244 per cent increase.

The sales uplift helped Quantium swing from a loss of $2.3m in fiscal 2013 to a profit of $6.65m for 2014.

Quantium, founded by directors Tony Davis, Greg Schneider and Adam Driussi, was able to return $6m to its owners in the form of a dividend, of which half went to Woolworths. The dividend represents a return on Woolworths’ initial $20m investment, but the supermarket chain did not purchase its stake in Quantium solely to make a quick dollar.

It forms a crucial part of a longer-term strategy by Mr O’Brien and his head of supermarkets, Tjeerd Jegen, to drill into its Everyday Rewards customer loyalty scheme — and will be used for everything to the way its stores look and what is on the shelves to better targeted promotions and marketing campaigns.

In his presentation of Woolworths’ full-year results in August, Mr O’Brien cited better customer insights transforming the way the retailer did business as one of five key objectives he was focusing on to improve the supermarket group’s earnings.

Quantium director Tony Davis said the company had encountered significant demand for its services over the last year as businesses woke up to the benefits of knowing more about their ­customers.

‘‘We have seen a significant increase in demand for our data and insight services, perhaps on the back of the growing interest in ‘big data’ and recognition of the competitive edges it can deliver,” Mr Davis said.

“Retailers increasingly understand the benefit to be gained from carefully harnessing data to make their offerings more relevant and attractive.’’

Upmarket department store David Jones is supercharging its customer loyalty program and has plans to better use customer data, with newly appointed boss Iain Nairn recently telling The Australian that retailers had to understand the habits of shoppers and behaviour, and pre-empt their behaviour.

“Retailers have always been a big sector using data,’’ Mr Davis said, “and have rapidly taken up new data in recent times.”

Companies outside retail are also embracing customer analytics. Last week a venture capital fund owned by Westpac purchased an equity stake in Zetaris, a big data analytics company whose clients are reported to include companies from the banking, telecommunications, retail and transport industries.