1 00:00:03,990 --> 00:00:06,450 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean 2 00:00:06,450 --> 00:00:10,350 Sean Aylmer: Aylmer, regular listeners would know that I like data. For 3 00:00:10,350 --> 00:00:13,169 Sean Aylmer: businesses, data can tell them so much about their customers, 4 00:00:13,170 --> 00:00:16,500 Sean Aylmer: about demand, about marketing, about the future. And data on 5 00:00:16,500 --> 00:00:20,370 Sean Aylmer: retail spending is particularly fascinating, because it gives an insight 6 00:00:20,640 --> 00:00:23,610 Sean Aylmer: into a large chunk of the economy. Paul Hines is 7 00:00:23,610 --> 00:00:27,120 Sean Aylmer: the managing director for Asia Pacific at IRI, the world's 8 00:00:27,120 --> 00:00:31,620 Sean Aylmer: biggest, the world's largest big data company. Paul, welcome back 9 00:00:31,620 --> 00:00:32,370 Sean Aylmer: to Fear and Greed. 10 00:00:33,600 --> 00:00:35,491 Paul Hines: Lovely to be here. Thank you. 11 00:00:35,491 --> 00:00:38,220 Sean Aylmer: You do a lot of work with clients in the 12 00:00:38,250 --> 00:00:42,780 Sean Aylmer: FMCG space, the fast moving consumer goods space. You must 13 00:00:42,780 --> 00:00:44,489 Sean Aylmer: get a lot of information and a lot of data 14 00:00:44,490 --> 00:00:47,940 Sean Aylmer: about that. What are they doing? How are they reacting to 15 00:00:47,940 --> 00:00:50,460 Sean Aylmer: inflation, to interest rate rises, that type of thing? 16 00:00:50,820 --> 00:00:54,330 Paul Hines: So what you are seeing is inflation being the number one topic 17 00:00:54,330 --> 00:00:58,590 Paul Hines: across all our clients, and really it's this battle between 18 00:00:59,100 --> 00:01:03,510 Paul Hines: prices. And unfortunately prices as every consumer sees are going 19 00:01:03,510 --> 00:01:07,530 Paul Hines: up and making sure that those prices reflect value though, 20 00:01:07,530 --> 00:01:10,560 Paul Hines: in terms of the quality of the product, availability of 21 00:01:10,560 --> 00:01:13,800 Paul Hines: the product as well. And also what new products are 22 00:01:13,800 --> 00:01:17,970 Paul Hines: being provided to consumers as well. So really it's a 23 00:01:17,970 --> 00:01:21,060 Paul Hines: big focus on price at the moment and a constant 24 00:01:21,060 --> 00:01:25,110 Paul Hines: negotiation, I would say, between retailers and manufacturers about putting 25 00:01:25,110 --> 00:01:30,240 Paul Hines: through price rises and then justifying those and sharing I 26 00:01:30,240 --> 00:01:31,860 Paul Hines: guess, the cost of that price as well. 27 00:01:32,610 --> 00:01:36,270 Sean Aylmer: And is this happening across the board or is there certain segments 28 00:01:36,270 --> 00:01:38,790 Sean Aylmer: of the market where behavior is a little different? 29 00:01:39,300 --> 00:01:42,780 Paul Hines: It's pretty much happening across the board. You are seeing 30 00:01:42,990 --> 00:01:46,680 Paul Hines: different influences on this. So cost of raw materials for 31 00:01:46,680 --> 00:01:50,940 Paul Hines: manufacturers, cost to get product to store, and then onto 32 00:01:50,940 --> 00:01:55,050 Paul Hines: the consumer. There's still a shortage of logistical challenges. So 33 00:01:55,050 --> 00:01:58,500 Paul Hines: shortage of drivers, for example, still a shortage of trucks 34 00:01:58,500 --> 00:02:01,740 Paul Hines: and vans available at any time, and even shortage of 35 00:02:01,740 --> 00:02:05,910 Paul Hines: staffs in store. We're still seeing people following the guidelines 36 00:02:05,910 --> 00:02:07,890 Paul Hines: and doing what the right thing is, but if you 37 00:02:07,890 --> 00:02:10,860 Paul Hines: feel ill, we are all conditioned in the last two 38 00:02:10,860 --> 00:02:13,170 Paul Hines: years not to go to our place of work. So 39 00:02:13,440 --> 00:02:17,040 Paul Hines: you are seeing a number of challenges around the industry 40 00:02:17,040 --> 00:02:20,910 Paul Hines: that are impacting price and costs, not just raw materials, 41 00:02:20,910 --> 00:02:24,180 Paul Hines: but just the logistical challenges of getting product to the shelf. 42 00:02:24,870 --> 00:02:29,010 Sean Aylmer: Okay. So how does this manifest itself in data? So what 43 00:02:29,010 --> 00:02:31,560 Sean Aylmer: you are telling me, I trust you Paul, I think 44 00:02:31,560 --> 00:02:35,070 Sean Aylmer: you're a very honorable person, but this is your take 45 00:02:35,340 --> 00:02:39,150 Sean Aylmer: on the back of what IRI does, the world's largest 46 00:02:39,150 --> 00:02:42,420 Sean Aylmer: big data company. I'm just interested in how it goes 47 00:02:42,450 --> 00:02:45,510 Sean Aylmer: from that little bit of data in a company, through 48 00:02:45,510 --> 00:02:47,519 Sean Aylmer: to what you've told me now, how does that all work? 49 00:02:48,030 --> 00:02:51,180 Paul Hines: Yeah, really interesting. So we do our level best to 50 00:02:51,180 --> 00:02:53,730 Paul Hines: look at all sources of data, so not just our 51 00:02:53,730 --> 00:02:58,799 Paul Hines: own. We have a consumer panel of 13, 500 Australian 52 00:02:58,800 --> 00:03:02,130 Paul Hines: households, and we measure their shopping behavior. We ask them 53 00:03:02,130 --> 00:03:05,970 Paul Hines: questions on how they feel, what they're worried about, what 54 00:03:05,970 --> 00:03:08,280 Paul Hines: they're looking for in terms of products and services every 55 00:03:08,280 --> 00:03:10,919 Paul Hines: week, every month. So we have a really good read, 56 00:03:10,919 --> 00:03:14,880 Paul Hines: if you like, of what's driving the Australian purchasing behavior, 57 00:03:14,880 --> 00:03:17,370 Paul Hines: but also mindset. And then we have lots of other 58 00:03:17,370 --> 00:03:21,900 Paul Hines: data sources around sales data from pretty much every retailer 59 00:03:22,169 --> 00:03:24,989 Paul Hines: in the country. And we also have access to customer 60 00:03:24,990 --> 00:03:29,609 Paul Hines: and basket level data, anonymized via loyalty schemes like Flybuys 61 00:03:29,610 --> 00:03:33,210 Paul Hines: for example, and also from Priceline as well. So we 62 00:03:33,210 --> 00:03:36,180 Paul Hines: have a number of data assets that we can access, 63 00:03:36,180 --> 00:03:38,430 Paul Hines: but then we also look at all of the economic 64 00:03:38,430 --> 00:03:42,450 Paul Hines: data externally that the government provides, other research company think 65 00:03:42,450 --> 00:03:45,360 Paul Hines: tanks as well. So then it's really connecting the dots 66 00:03:45,360 --> 00:03:48,720 Paul Hines: to try and understand, well, okay, what does that actually mean 67 00:03:48,720 --> 00:03:52,440 Paul Hines: in reality and practicality for our clients? And obviously, one 68 00:03:52,440 --> 00:03:53,850 Paul Hines: of the things we do is we go and talk 69 00:03:53,850 --> 00:03:55,740 Paul Hines: to all our clients all the time and understand what 70 00:03:55,740 --> 00:03:58,440 Paul Hines: their concerns are and what they're experiencing and try and 71 00:03:58,440 --> 00:04:01,620 Paul Hines: join that together with the data that we have to 72 00:04:01,830 --> 00:04:05,820 Paul Hines: make some hopefully, smart decisions and inferences for our clients. 73 00:04:06,540 --> 00:04:09,570 Sean Aylmer: So if I'm a retailer and I'm a sizable retailer 74 00:04:09,870 --> 00:04:14,400 Sean Aylmer: and I use IRI, I'm hoping to get from them, 75 00:04:14,910 --> 00:04:18,839 Sean Aylmer: from you, some forecasts of what consumers will be thinking 76 00:04:18,839 --> 00:04:21,179 Sean Aylmer: about doing in six months, 12 months, two years, that 77 00:04:21,180 --> 00:04:21,630 Sean Aylmer: sort of thing? 78 00:04:22,290 --> 00:04:27,481 Paul Hines: Yep, yep. Correct, we do our best to do that. 79 00:04:27,481 --> 00:04:30,210 Sean Aylmer: Yeah, okay, okay. So with that in mind, what are the big changes then in the 80 00:04:30,240 --> 00:04:32,310 Sean Aylmer: last six months or so? I mean, we saw the boom 81 00:04:32,310 --> 00:04:35,130 Sean Aylmer: in online shopping, during the pandemic, are things back to 82 00:04:35,130 --> 00:04:38,460 Sean Aylmer: normal or are customers forever altered? 83 00:04:39,570 --> 00:04:43,350 Paul Hines: Oh, really good question. So for online shopping, we saw 84 00:04:43,410 --> 00:04:47,310 Paul Hines: sales double in a year, but what we believe has 85 00:04:47,310 --> 00:04:52,350 Paul Hines: happened is that you got twice as much switching, purchasing, 86 00:04:52,500 --> 00:04:57,000 Paul Hines: use of online services, particularly last year and the year before 87 00:04:57,000 --> 00:05:00,479 Paul Hines: due to COVID. Whereas now what's happening, is sales and 88 00:05:00,480 --> 00:05:05,070 Paul Hines: normalizing again, in some cases they've actually reduced in online 89 00:05:05,070 --> 00:05:08,580 Paul Hines: sales and people are switching back to physical channel, in 90 00:05:08,580 --> 00:05:11,400 Paul Hines: store as well. And we've seen some pure play retailers 91 00:05:11,400 --> 00:05:14,430 Paul Hines: actually go backwards this year in terms of their sales 92 00:05:14,610 --> 00:05:18,360 Paul Hines: via their online channel. So unfortunately COVID was a little 93 00:05:18,360 --> 00:05:22,830 Paul Hines: bit like a time of war. It's stimulated real increase 94 00:05:22,830 --> 00:05:25,800 Paul Hines: in adoption of new services and new channels, sometimes by 95 00:05:25,800 --> 00:05:29,669 Paul Hines: necessity. But we're seeing online sales normalize and actually go 96 00:05:29,670 --> 00:05:34,260 Paul Hines: a little bit backwards now versus physical bricks and mortar 97 00:05:34,260 --> 00:05:36,779 Paul Hines: sales. And some of that's driven by the consumer need 98 00:05:36,779 --> 00:05:40,500 Paul Hines: for more freedom to go out and physically visit shops 99 00:05:40,560 --> 00:05:42,390 Paul Hines: as opposed to staying at home. Now we've got that 100 00:05:42,390 --> 00:05:45,510 Paul Hines: freedom back versus this time last year, people want to 101 00:05:45,510 --> 00:05:48,870 Paul Hines: go out and look and feel and have that customer 102 00:05:48,870 --> 00:05:52,230 Paul Hines: experience of being able to touch a product before they buy. 103 00:05:52,890 --> 00:05:55,200 Sean Aylmer: Okay. And you get good data from bricks and mortar 104 00:05:55,680 --> 00:05:56,580 Sean Aylmer: shops as well? 105 00:05:56,820 --> 00:06:00,960 Paul Hines: Oh, absolutely. So for the last 30 years, I would 106 00:06:00,960 --> 00:06:03,630 Paul Hines: say, as a business globally, we've collected point of sale data. 107 00:06:03,631 --> 00:06:03,990 Sean Aylmer: Right. 108 00:06:03,990 --> 00:06:06,990 Paul Hines: So all of the right sales data, you get through the till 109 00:06:06,990 --> 00:06:09,480 Paul Hines: when you do your shopping and we've been analyzing that 110 00:06:09,480 --> 00:06:11,730 Paul Hines: for decades. So we've got all of that back data 111 00:06:11,730 --> 00:06:14,099 Paul Hines: as well, so we're really good at being able to 112 00:06:14,100 --> 00:06:17,850 Paul Hines: understand the trends within categories and products over time. And 113 00:06:17,850 --> 00:06:21,779 Paul Hines: we've also got basket and customer level data anonymized via 114 00:06:21,779 --> 00:06:24,719 Paul Hines: loyalty programs, like I mentioned, like Flybuys as well. So 115 00:06:25,020 --> 00:06:27,900 Paul Hines: we can see total sales within a category for anybody. 116 00:06:28,440 --> 00:06:30,990 Paul Hines: And then we can, well, what products do we buy in our basket? 117 00:06:31,320 --> 00:06:32,909 Paul Hines: What do we take home every time we go to 118 00:06:32,910 --> 00:06:33,510 Paul Hines: the shops? 119 00:06:33,810 --> 00:06:35,580 Sean Aylmer: Stay with me, Paul, we'll be back in a minute. 120 00:06:35,580 --> 00:06:45,210 Sean Aylmer: My guest this morning is Paul Hines, managing director for Asia Pacific 121 00:06:45,210 --> 00:06:49,650 Sean Aylmer: at data company IRI. So I'll get off fast moving 122 00:06:49,650 --> 00:06:52,290 Sean Aylmer: consumer goods shortly, but if we think about that area 123 00:06:52,290 --> 00:06:56,700 Sean Aylmer: just for now, what are the big changes now compared 124 00:06:56,700 --> 00:06:58,979 Sean Aylmer: to five years ago, 10 years ago? Is it about 125 00:06:58,980 --> 00:07:01,890 Sean Aylmer: basket sizes? Is it about how people shop? I'm just 126 00:07:01,890 --> 00:07:05,670 Sean Aylmer: wondering what the big trends are in that area, right now? 127 00:07:06,450 --> 00:07:10,980 Paul Hines: Yeah, so again, Australia's bucked some trends. If you look 128 00:07:10,980 --> 00:07:15,900 Paul Hines: at other countries globally, we have seen spend that continues 129 00:07:15,900 --> 00:07:18,900 Paul Hines: to rise, it is slowing down. Some of that is 130 00:07:18,900 --> 00:07:22,350 Paul Hines: because obviously, due to inflation, prices have gone up. So 131 00:07:22,590 --> 00:07:26,310 Paul Hines: we're actually seeing basket levels reduced now. There's less products, 132 00:07:26,310 --> 00:07:29,460 Paul Hines: less units in a basket, but the value of spend 133 00:07:29,460 --> 00:07:33,240 Paul Hines: is increasing every time we go to the shops effectively. 134 00:07:33,240 --> 00:07:36,750 Paul Hines: So we're starting to see people buy less products. We're 135 00:07:36,750 --> 00:07:41,610 Paul Hines: also seeing a switch from grocery shopping to out of 136 00:07:41,610 --> 00:07:45,780 Paul Hines: home. So we are back actually to pre- COVID, so 137 00:07:45,780 --> 00:07:49,860 Paul Hines: December 2019 levels of spending cafes and restaurants. So we're 138 00:07:50,640 --> 00:07:54,210 Paul Hines: starting to spend less in supermarkets and more ongoing out 139 00:07:54,210 --> 00:07:57,690 Paul Hines: for meals, grabbing our coffees. And I think Steven Kane 140 00:07:57,690 --> 00:08:00,600 Paul Hines: was quoted in August at one of the general meetings 141 00:08:00,600 --> 00:08:03,360 Paul Hines: for Kohls of saying, " Every time someone buys a coffee 142 00:08:03,360 --> 00:08:05,490 Paul Hines: or eats out, that's less that they're going to spend 143 00:08:05,490 --> 00:08:08,520 Paul Hines: in a supermarket." So even though there's a big concern 144 00:08:08,520 --> 00:08:13,260 Paul Hines: about inflation and household budgets, as Australians, we're actually enjoying 145 00:08:13,260 --> 00:08:16,380 Paul Hines: our freedom this year. We're going out and spending more 146 00:08:16,380 --> 00:08:20,280 Paul Hines: on hotels, on cafes and restaurants than we have done 147 00:08:20,760 --> 00:08:21,840 Paul Hines: for over two years. 148 00:08:22,410 --> 00:08:25,290 Sean Aylmer: Okay. So we've been talking about retailing broadly here. What 149 00:08:25,320 --> 00:08:30,960 Sean Aylmer: other sectors are introducing data more so now than ever before? 150 00:08:32,010 --> 00:08:36,929 Paul Hines: So I think traditionally financial services, banks have always been 151 00:08:37,110 --> 00:08:42,300 Paul Hines: high users of data. And unfortunately, as inflation interest rates 152 00:08:42,330 --> 00:08:45,329 Paul Hines: go up, they're going to be really watching with great 153 00:08:45,330 --> 00:08:48,720 Paul Hines: detail how consumers spend and what they can afford. And 154 00:08:48,720 --> 00:08:52,110 Paul Hines: that will drift into things like mortgage offers, credit card 155 00:08:52,110 --> 00:08:55,079 Paul Hines: offers, how we use our income and how we use 156 00:08:55,080 --> 00:08:59,400 Paul Hines: credit. So expect to see the banks really trying hard 157 00:08:59,400 --> 00:09:02,610 Paul Hines: to predict the risk that they're going to take in. 158 00:09:02,730 --> 00:09:07,199 Paul Hines: I think every sector of retail, everybody who engages with 159 00:09:07,200 --> 00:09:10,230 Paul Hines: consumers is collecting data. One of the things that I 160 00:09:10,230 --> 00:09:13,050 Paul Hines: noticed particularly about Australia, I'm three years in now, is 161 00:09:13,050 --> 00:09:15,510 Paul Hines: that every business big or small, tends to have an 162 00:09:15,510 --> 00:09:19,800 Paul Hines: app. So whether it's Chargrill Charlies that's collecting your order, 163 00:09:20,010 --> 00:09:22,980 Paul Hines: they understand what their most popular products are and what 164 00:09:22,980 --> 00:09:27,179 Paul Hines: their price point is versus a massive Australian or global 165 00:09:27,179 --> 00:09:30,780 Paul Hines: retailer as well. So I think everybody is trying to 166 00:09:30,780 --> 00:09:34,620 Paul Hines: use data in some way or fashion. Usually you need 167 00:09:34,620 --> 00:09:36,420 Paul Hines: to have an app, you need to have a website, 168 00:09:36,420 --> 00:09:38,220 Paul Hines: you need to be able to join up your in- 169 00:09:38,220 --> 00:09:41,970 Paul Hines: store experience, so it's a real omnichannel relationship that you 170 00:09:41,970 --> 00:09:44,610 Paul Hines: have with the consumer. So you are connecting the dots 171 00:09:44,610 --> 00:09:47,610 Paul Hines: for them. I think the ones that will struggle will 172 00:09:47,610 --> 00:09:49,439 Paul Hines: be the ones that are trying to make the consumer 173 00:09:49,440 --> 00:09:53,340 Paul Hines: do the work for them in terms of, " I'm going 174 00:09:53,340 --> 00:09:56,880 Paul Hines: to give you all the information and expect a relevant 175 00:09:56,910 --> 00:10:00,540 Paul Hines: offer or promotion in a timely fashion. I'm going to 176 00:10:00,540 --> 00:10:04,590 Paul Hines: go hunting for that." As opposed to those that serve up a really relevant and 177 00:10:04,590 --> 00:10:07,170 Paul Hines: timely offer to the consumer. So all they've got to 178 00:10:07,170 --> 00:10:09,479 Paul Hines: do is make the purchase decision in effect. If you 179 00:10:09,480 --> 00:10:11,790 Paul Hines: make it too difficult for the consumer and too many 180 00:10:11,790 --> 00:10:13,920 Paul Hines: clicks or too much time, then you'll lose them. 181 00:10:14,670 --> 00:10:17,490 Sean Aylmer: So I mean, it's about giving the power to the consumer in 182 00:10:17,490 --> 00:10:20,729 Sean Aylmer: a sense. If you can listen to the consumer, give 183 00:10:20,730 --> 00:10:23,040 Sean Aylmer: them what they want, you have a much bigger chance 184 00:10:23,490 --> 00:10:25,770 Sean Aylmer: than if you're making the consumer work sort of thing. 185 00:10:26,550 --> 00:10:29,730 Paul Hines: Yeah. And I think that's always been the foundation of 186 00:10:29,730 --> 00:10:33,810 Paul Hines: good retailing, but I think now with technology that's available 187 00:10:34,020 --> 00:10:38,400 Paul Hines: and consumers expectations that you know me, you know what 188 00:10:38,400 --> 00:10:40,890 Paul Hines: I buy, I share my data with you, so therefore you should 189 00:10:41,250 --> 00:10:44,850 Paul Hines: be really offering me relevant and timely offers. If you 190 00:10:44,850 --> 00:10:47,459 Paul Hines: make that hard, then I think you are going to 191 00:10:47,460 --> 00:10:48,871 Paul Hines: struggle especially next year. 192 00:10:48,871 --> 00:10:52,079 Sean Aylmer: Okay. Paul, one final question. You said that you've been into 193 00:10:52,080 --> 00:10:54,060 Sean Aylmer: it three years in Australia, is that right? 194 00:10:54,570 --> 00:10:55,290 Paul Hines: Yep, correct. 195 00:10:55,950 --> 00:10:59,130 Sean Aylmer: Where does Australia sit compared to other countries in terms 196 00:10:59,130 --> 00:11:01,770 Sean Aylmer: of how they use data well or poorly? 197 00:11:02,520 --> 00:11:05,280 Paul Hines: So I think in terms of IRI and what I see, 198 00:11:05,280 --> 00:11:10,050 Paul Hines: I've worked across Europe previously. Australia is up there with 199 00:11:10,110 --> 00:11:14,730 Paul Hines: the best of every other country. There's certainly no lag 200 00:11:14,730 --> 00:11:17,790 Paul Hines: or difference in terms of a sophistication or use of 201 00:11:17,790 --> 00:11:21,240 Paul Hines: data and insight. There's some great Australian companies out there 202 00:11:21,240 --> 00:11:23,790 Paul Hines: from a technology perspective that are using it. So I 203 00:11:23,790 --> 00:11:28,080 Paul Hines: think Australia stacks up really well versus any other market 204 00:11:28,080 --> 00:11:30,690 Paul Hines: in terms of its usage of data and insight. And 205 00:11:30,690 --> 00:11:33,300 Paul Hines: like I said, I think Australia was one of the 206 00:11:33,300 --> 00:11:35,550 Paul Hines: first countries, if not the first, to adapt things like 207 00:11:35,550 --> 00:11:41,790 Paul Hines: contactless payment, the usage of apps. There's great technology adoption 208 00:11:41,790 --> 00:11:45,630 Paul Hines: by Australian consumers and I think that's reflected again in what 209 00:11:45,630 --> 00:11:48,359 Paul Hines: I do around how that generates data and insight to 210 00:11:48,360 --> 00:11:49,829 Paul Hines: then make your business decisions. 211 00:11:50,520 --> 00:11:52,170 Sean Aylmer: Paul, thank you for talking to Fear and Greed. 212 00:11:52,679 --> 00:11:53,370 Paul Hines: Thank you very much. 213 00:11:53,700 --> 00:11:56,429 Sean Aylmer: That was Paul Hines, managing director for Asia Pacific at 214 00:11:56,429 --> 00:11:59,760 Sean Aylmer: Data Company IRI. This is the Fear and Greed Daily 215 00:11:59,760 --> 00:12:02,190 Sean Aylmer: Interview. Join us every morning for the full episode of 216 00:12:02,190 --> 00:12:05,520 Sean Aylmer: Fear and Greed, Australia's most popular business podcast. I'm Sean 217 00:12:05,550 --> 00:12:06,870 Sean Aylmer: Aylmer, enjoy your day.