Woolworths will take control of data firm Quantium in a $223m deal and also create a new division to exploit retail analytics.
Woolworths will take control of data firm Quantium in a $223m deal and also create a new division to exploit retail analytics.

Woolworths boosts stake in data analysis

Woolworths has made one of the single biggest investments in data analytics by an Australian retailer, agreeing to pay $223 million to lift its equity stake in Quantium from 47 per cent to 75 per cent.

The move underlines the importance placed by major retail companies on data to drive business decisions.

The supermarket group will further enhance the reliance it now has on data analytics to help shape its strategy, interact with shoppers and direct investment by also creating a new business division within Woolworths, to be called Q-Retail.

While Woolworths takes majority control, Quantium will retain its senior leadership team and continuing to operate in sectors outside retail.

The $223m paid for the additional stake in Quantium comes on top of the $20m Woolworths spent on an initial near-50 per cent stake in the privately-owned group.

Quantium is billed as a world-class data science and advanced analytics business. Many retailers such as supermarkets are increasingly turning to analytics to help develop new strategies, bond shoppers better to the retailer and to guide investments.

The harvesting of sales and customer data is emerging as a key issue for retailers, as it helps guide sales and marketing campaigns as well as anticipate customer demands.

Other companies are also investing heavily in the field, with Wesfarmers, which once owned rival Coles, building its own Advanced Analytics Centre to exploit a number of opportunities in data intelligence.

When Woolworths made its maiden investment in Quantium it also entered into a long-term partnership that has enabled Woolworths and its supplier partners to make decisions across pricing, ranging and promotions.

Three years ago Woolworths broke its 15-year relationship with market research company IRI to award its crucial data-sharing and supermarket scanning contracts to Nielsen and Quantium.

Woolworths chairman Gordon Cairns said the retailer has enjoyed a successful partnership with Quantium over the last eight years.

Woolworths chief executive Brad Banducci said advanced analytics was key to improving services to customers, supporting staff and suppliers.

"The way we gather data, interpret it, and protect it, is becoming ever more important," Mr Banducci said.

"Through this transaction, we aspire to bring together Quantium's advanced analytics capability and Woolworths Group's retail capabilities to unlock value across our entire retail ecosystem. By working better together, we aim to transform the rapidly evolving retail sector, helping us better service our customers and support our team and supplier partners."

Woolworths also announced that Q-Retail will be led by Amitabh Mall, who will also serve as chief analytics officer.

Mr Mall joins after 20 years at the Boston Consulting Group where he most recently led their consumer and retail practice in the Asia-Pacific. Mr Banducci will assume the role of chairman of Quantium.

Originally published as Woolworths boosts stake in data analysis