Two inter related pieces of news have got my attention today. Firstly, a forecast has just been released which suggests that mobile carriers’ revenues from voice, messaging and data services in the United Kingdom, France, Germany, Spain and Italy will drop by nearly 20 billion Euros, or four percent per year, over the next five years.
This suggests that, despite hopes to the contrary, data use will not make up for stagnant or declining revenues from voice and messaging in the short to medium term. It is therefore unsurprising that mobile carriers have been urgently looking for other revenue streams.
One potentially lucrative revenue stream is to sell aggregated customer usage data. This week, Telefonica announced it will set up a business to sell data that it collects from its mobile phone customers to retailers.
The company, which owns the O2 brand in Britain and Germany and other European markets, has created its first product, called Smart Steps, which will measure footfall for retailers. By exploiting this data, retailers will be able to find out where different types of people are at different times of the day. Doing so will enable retailers to customise communications, promotions and products, so making them more relevant.
I can imagine this being very useful for supermarkets. For example, by integrating O2 data with data from Tesco Clubcard or Nectar, Tesco and Sainsbury’s would be able to glean a far greater understanding of their customers’ every day routines and therefore target them with more precise and relevant marketing and communications. Supermarkets will also be able to use this data to help poach business from others stores and supermarkets at which their customers shop.