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Eagle Eye Solutions PLC: The digital connection for retailers

Maps, messaging, music, all have been completely changed by digital, but walking around a supermarket ‘has not changed one jot’

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Driving retailers to extinction. Eagle Eye can help

It’s been a year since Tim Mason took over as chief executive of Eagle Eye Solutions Group PLC (LON:EYE) .

Since then, Eagle Eye’s value has almost doubled, sales have risen by more than 70% and the company is soon to press the button on a massive loyalty scheme integration for giant Canadian retailer Loblaw.

Though Loblaw might not be well known in the UK it is a huge deal  -  imagine Tesco (Loblaw) taking over Boots (Shoppers Drug Mart) and combining the two, says Mason.

It’s all about consumer data, he says and making the connection between customers and what the retailers are offering.

That digital connection is crucial says Mason and is the piece of the online retail puzzle Eagle Eye offers.

The connection enables the retailer to see what customers are doing and more importantly to respond rapidly.

Many of the world’s largest retailers still haven’t grasped the importance of this, he says.

Maps, messaging, music, all have been completely changed by digital, but walking around a supermarket ‘has not changed one jot’.

“Everyone does exactly the same as they did 25 years ago.

As an example he points to current driving habits: “Try switching Google maps off and don’t use satellite navigation in the car and see how you long last.

 “Many the world’s largest corporations metaphorically still drive around without [the equivalent] of Google maps.”

To personalise and target the business to compete with anyone (but especially Amazon) is the key and that’s the plan with Loblaw.

The two arms of the Canadian business have separate and sizeable loyalty schemes, and by merging them it can create a  ‘single view’ of its customers.

 “How we use this connection to customer identities will sell more products and services and make for happier customers.”

Based on the CRM profile, for example, Loblaw will tailor offers to the person concerned, which is crucial for retailers says Mason.

Instant data can also help trading. If Thursday is a bad day, you can offer something at the weekend to make up.

Regulation changes are forcing companies to look at how they use consumer data and how much information they store online about individuals and consumers.

General Data Protection Regulation (GDPR) will be introduced across Europe next year, which will enable people much easier access to the information about them stored online.

There are swingeing fines proposed for companies that do not comply and for Eagle Eye that presents an opportunity.

Customers signing up to a loyalty scheme managed by Eagle Eye already opt-in to hand over details, but tardy companies are having to address the issue urgently .

Mason believes there is a trade-off between what people are prepared to offer about themselves in return for financial and other benefits.

More rewards would encourage them to hand over more information.

Loblaw, for example, is introducing a blood pressure test that links back to health & wellbeing offers.

This loyalty scheme integration will be closely watched by other retailers, especially those now in the cross-hairs of Amazon.

For Eagle Eye going forward, Loblaw also stands to be a significant marketing opportunity.

The AIM firm already has an impressive list of customers ranging from Sainsbury’s and John Lewis in the UK through to a loyalty prize scheme with Google.

This momentum is also now showing through in the financial numbers.

Sales in the year to June rose by 71% to £11.1mln, with another 36% rise in the first three months of the current year.

Losses in the year to June were £3.5mln (£3.6mln).

Redemption volumes rose by 50% on the previous quarter to 32.6mlm and by 179% on the same period a year ago as a scheme with Sainsbury's came onstream fully.

Mason says one of the reasons he joined Eagle Eye was the long term potential and says the Loblaw contract will be ‘another huge step-up’.

At 205p, Eagle Eye is valued at £52mln. If Mason is right about the way retail is heading you won’t need a text message to see that’s a bargain.

Quick facts: Eagle Eye Solutions Group PLC

Price: 170.5 GBX

Market: AIM
Market Cap: £43.88 m

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