Information Supply Chain, What It Is And Why You Need To Start Talking About It

Written by Todd L. Michaud
July 27th, 2010

Franchisee Columnist Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky’s and Moe’s Southwestern Grill).

Make no mistake, the number-one challenge IT teams will be faced with over the next five years is helping their business partners extract meaningful information from the yottabytes of data being shoved into their archives. And when I use the term “meaningful information,” I define it as information used to create action.

We are at the dawn of an age where great companies will figure out how to successfully combine operational, marketing, customer service and social media data sources into systems and tools that enable the business. These firms need to clearly define their Information Supply Chain. Companies that don’t figure it out will be left out in the cold.

Take Starbucks, which has just added its ten-millionth fan on Facebook. This stat is making marketers everywhere drool with envy. I can’t help but wonder if this stat is just a cool big number or if it is part of an integrated “customer relationship management” strategy.

Is each one of those fans in coffee retailer’s CRM system? Is the company able to track the purchases of each of its fans? Can it easily correlate the impact of poor store operations to customer sentiment? Does Starbucks market specific offers to customers based on their social graph (giving better deals to those who are highly connected versus those who are not)? Has the company assigned a value/score to each customer that helps guide its marketing efforts?

Does Starbucks know if a Facebook user is worth more than a Twitter follower or a 4-Square Mayor? Can it Tweet out specific, location-based in-the-moment offers on items that are overstocked or about to go bad (a 2010 version of the manager’s special)? Can the company tie the pages that people surfed on the newly free WiFi service back to their purchases?

If Starbucks can’t answer all these questions today (and I’m not sure it can), I would be willing to bet it will be able to answer most of them within five years. I used Starbucks as an example simply because of its recent Facebook milestone. But, really, these points apply to any retailer.

While a lot of people are talking about tokenization solutions as a way to protect cardholder data, no one seems to be talking about what a huge breakthrough tracking information about customers for marketing purposes would be. By implementing tokenization (or at least certain flavors of tokenization), marketers can now track purchase behaviors in a way that has been taboo until now. It is an absolute gold mine, if you can manage the data.


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.