Beware of data crime to harm the consumer, warns former Sainsbury's CEO

Justin King has made a 35-year career of putting the customer before the data

Somewhat unusually for the former leader of brands like Sainsbury's, Pepsi and Mars, Justin King describes himself as a "tech sceptic". Adding to that unusualness, he was speaking at the very technology-focused Teradata Universe conference in London.

In King's view, we are "on the cusp of a fundamental change in society's attitude towards technology, in the broadest sense," particularly in regards to trust.

Referencing examples including Martin Lewis suing Facebook and misuse of the Sainsbury's brand by malicious online advertisers, he said, "Ultimately if you provide the opportunity for people to do untrustworthy things, that will reflect on you."

In regards to the Cambridge Analytica scandal, King added, "Trust has never been more challenged than it is today… We are less trusting of institutions than ever before."

Institutions that have grown over the last decade - like Facebook - are "very trusted", but are starting to abuse that position, he argued (although older firms are not exempt: see the Ford Pinto). Late last year Facebook was caught providing data to companies in Australia to target depressed teenagers. "How can it ever be appropriate to ever use that kind of insight to exploit a consumer?" asked King. "I just don't get that."

Laws like the GDPR are an attempt to tackle these abuses, although such legislation "will always be late, will always be disproportionate and it will always hit the target it should have hit two years ago, not the one it should hit now - that is the nature of government."

Too much data is as bad as too little...

King started working with Mars in 1983, where he would download sales data on a 56k modem: "If you're downloading on a 56k, you make sure you know what information you really need… We are downloading more and more entirely peripheral and useless information."

That may be the case (is the weather a relevant data point when you're looking at email bounceback rates?); but there is such a thing as too much relevant information, as well.

In 1994, at Asda, there was no such thing as live sales data; it would be available for the previous week by lunchtime on Monday, "if you were lucky." King oversaw the introduction of live sales data availability at Marks & Spencer seven years later, and says that he spent three days staring at a screen and going "Wow, it's going well."

"I realised that it was serving no useful purpose, and as I started to walk round the office I found 500 other people staring at their screens and going ‘Wow, it's going well'. I realised it was going to go really badly, really soon if those people didn't stop looking at the screen." To get people to focus on their work, M&S changed the system so that the data could only be seen at specific times in the day (many companies do the same with social media today).

Beware of data crime to harm the consumer, warns former Sainsbury's CEO

Justin King has made a 35-year career of putting the customer before the data

...But just enough will help the consumer

In the late '80s King was working for Haagen-Daz, just in time for the introduction of category management: the first big consumer-facing use of data in grocery retail, but "it was entirely being used against customers."

This wasn't always a conscious choice on the retailers' part. In a meeting with King, the Head of Buying at Sainsbury's (who, ironically, ended up working for King several years later) said that he would only stock Haagen-Daz's five best-selling lines. That makes sense on the surface, but, "In the UK if you stock the five best-selling lines, you get five variations on chocolate." It was only because Haagen-Daz had the data from its own stores that it could advise on a different way to decide on flavours to stock.

King described his first experience in a company with technology and data at its heart, during his time at Asda (owned by Walmart): "I remember being blown away by how Walmart really understood that they could use new technology, data and all of its applications to do an even better job with customers… It was embedded in the culture, and it was the first time I really saw a whole organisation lined up behind that central idea."

"Never forget those that you are about to leave behind"

Putting these lessons into play has been a constant in King's career, and didn't stop when he joined Sainsbury's. The retailer was already running its Nectar loyalty programme when he joined; but, he says, "it was being used against customers." The firm used Nectar to reward its ‘Bullseye Customers', who returned all the time (600,000), instead of trying to bring back occasional shoppers (13.5 million).

"Never forget those that you are about to leave behind," King told the audience. "A few years ago I was told ‘There are a million people in the UK with smartphones', and all I could think was, ‘That means there's sixty seven and a half million who haven't got one'. Of course you should embrace the million that have, but those maths are against you if that's all that you do."

Beware of data crime to harm the consumer, warns former Sainsbury's CEO

Justin King has made a 35-year career of putting the customer before the data

On the customer's side

King closed by sharing five tips for businesses in the data world:

On the customer's side of the table: "Time and time again, I see business to business conversations...sitting on the wrong side of the table, working out how you can conspire to use the opportunity to do something to customers that they may not wish, or may not even know is being done to them."
Customer versus consumer: Make sure that you think about the consumer (the end-user), and show your customers that you are doing so. "I can't tell you the number of times I have sat in presentations and listened to people tell me how they can help me do bad things to my customers."
Think in the real world: "It's very easy to get sucked into believing that technology...has completely changed the paradigm, but the nature of paradigms is that they don't really change that much." King advised the audience not to get taken in by outlandish claims, just because they're tied to technology.
Be wary of data crime: This ties King's general distrust of data with his continued fight for consumer wellbeing. He often received complaint letters from customers about changes in their local Sainsbury's store, which were inevitably dictated by ‘the numbers'. "Over time we got sophisticated enough that we could start to identify products that, although they didn't sell well, were a pivotal part of the customer relationship."
Culture: "It is the single most powerful force for good and bad in organisations." It is the best way to keep the workforce, no matter how large and distributed, facing in the same direction.

One final example demonstrated King's approach to the culture of ‘customer first':

"We didn't have a payment protection insurance scandal at Sainsbury's Bank, and there's one simple reason for that… I sat in the first Sainsbury's Bank board meeting [since I joined] and I looked at the P&L and saw a line that said ‘PPI'. They said, ‘It's this wonderful thing; it's insurance and we sell it...and the really great thing is, customers can never claim. They pay us for it and we make 95 per cent profit'. I said, ‘We're going to stop selling it next week'...

"That decision did not get made because I understood any of the numbers, or how banking worked. It's just that in the culture that I come from I could not see how we could do anything that was so plainly against the customer.

That's why culture is such a powerful thing. It will allow you to take all the best decisions, it will stop you from making all the bad decisions, and it will unify you and your business behind whatever your mission goal is."