In our third annual Retailer Preference Index (RPI) for the U.S. grocery channel, we look at the $700 billion grocery industry which finds itself potentially less than a year away from an economic downturn, according to many economists. Which grocers are best prepared to weather the storm, and what can other retailers do to compete? The RPI seeks to answer these and other questions, including:
- What drives customer preference for grocery retailers?
- Which retailers are winning and losing? And why?
- What can grocery retailers do to improve performance and win more trips?
Existing ranking methods focus primarily on retail growth based on store counts and revenue size, without linking growth to emotional or financial performance. We have a different perspective, one that focuses on the consumer and their emotional connection to the various retailers within the grocery channel. Our study surveyed 7,500 US consumers to uncover how they think and feel about grocery stores, and how they shop them. All with a goal to understand how Customers perceive stores through seven different drivers, and how these perceptions affect both the emotional connection and financial performance.
<p>Our goal: to help retailers better understand their customers to deliver a value proposition that aligns with their needs, to earn more trips and drive sustainable growth. </p><p>To learn more, download a free copy of the report. If your company is in our report and you'd like your custom retailer profile, <a href="https://www.go.dunnhumby.com/RetailerProfile" rel="noopener noreferrer" target="_blank">contact us</a>.</p>
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As disruption in the retail industry accelerates, more companies are turning to technology to keep up with new market entrants and changing consumer trends. But taking the focus off of Customer needs as the core driver of CRM strategy, retailers are missing opportunities for meaningful Customer interactions and profitable growth.
In this report, we'll take a closer look at the five big myths behind the trend of putting technology at the center of CRM strategies, revealing why a Customer First approach will help improve engagement with your Customers, which may just be the answer for ineffective tech solutions.
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Facing rising costs and shrinking margins, finding new revenue streams should be an urgent priority for grocery retailers the world over. Blessed with volumes of valuable customer data and a rich menu of owned media, this unbeatable combination provides enormous scope for creating sustainable growth. Yet so many grocery retailers are struggling to make this a reality.
To better understand why so many retailers aren't taking advantage of new revenue streams while improving the shopping experience for their customers, we commissioned a global study with Forrester Consulting. Download your complimentary copy of Forrester's research to learn about the barriers holding retailers back from revenue generation and the recommendations to overcome the challenges.
<p><strong>Key findings</strong></p><ul class="ee-ul"><li>85% of grocery retailers have identified creation of new revenue streams as a priority for 2020</li><li>Despite high levels of confidence in their data strategies, only 15% of retailers have the right capabilities, people, technology, and processes to improve customer experience and monetize their data.</li><li>Most are also missing out on lucrative revenue through monetizing their media. Challenges with data, technology, expertise, and culture are the greatest barriers to progress.</li><li>Retailers who are able to successfully utilise data insights, are reaping benefits with 61% seeing an improvement in the customer experience and 56% seeing growth in existing revenues and revenue streams.</li></ul>
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The second annual dunnhumby Retailer Preference Index for the Convenience Channel explores the $654.3 billion US convenience market. The study focuses on:
- What drives customer preference for convenience stores?
- Which retailers are winning and losing? And why?
- What can c-store retailers do to improve performance and win more trips?
Existing ranking methods focus primarily on retail growth based on store counts and revenue size, without linking growth to emotional or financial performance. We have a different perspective, one that focuses on the consumer and their emotional connection to the various retailers within the Convenience channel. Our study surveyed nearly 7,000 US consumers to uncover how they think and feel about c-stores, and how they shop them to understand how Customers perceive Quality, Convenience and Price, and how these perceptions affect both the emotional connection and financial performance.
<p>Our goal: to help retailers better understand their customers to deliver a value proposition that aligns with their needs, to earn more trips and drive sustainable growth.</p><p>To learn more, download a free copy of the report. <strong>If your company is in our report and you'd like your custom retailer profile, <a href="https://www.go.dunnhumby.com/RetailerProfile?utm_source=dunnhumby&utm_medium=website&utm_campaign=2019_Retailer_Preference_Index_Convenience" rel="noopener noreferrer" target="_blank">contact us</a>.</strong></p><p><strong>The retailers included are:</strong></p><p>7-Eleven<br/>ampm/ARCO<br/>BPShop<br/>Casey's General Stores<br/>Chevron Food Mart/ Extra Mile<br/>Circle K<br/>Cumberland Farms<br/>Exxon On the Run<br/>GetGo<br/>Holiday Stationstores<br/>Kum & Go<br/>Kwik Trip/ KwikStar<br/>Maverik<br/>Meijer Gas Stations<br/>Mobil On the Run<br/>Murphy USA<br/>QuikTrip<br/>RaceTrac<br/>RaceWay<br/>Royal Farms<br/>Sheetz<br/>Shell<br/>Speedway<br/>Thornton's<br/>Turkey Hill Minit Markets<br/>Wawa</p>
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In dunnhumby's inaugural Retailer Preference Index (RPI) study, a comprehensive nationwide study, we explore the evolving US grocery landscape to help retailers navigate an increasingly fragmented market, where shoppers are, on average, shopping at four grocery stores per month and regularly buying groceries from at least three other channels. The study focuses on the following questions:
- What drives preference?
- Who is winning and losing?
- Why are they winning or losing?
- What can grocery retailers do to improve preference and performance?
Existing retailer rankings by Consumer Reports or Market Force only use survey data to capture how shoppers feel about the various banners without linking the emotion to financial performance. Others, like Supermarket News, rank banners based on financial metrics but fail to capture how people feel.
<p>Our study is different because it quantifies the preference driver importance based on a combination of a banner's emotional connection and financial performance. The emotional connection was captured through a 15-minute online survey across 11,000 US households about how customers think and feel about 50+ US grocery retailers. </p><p>To learn more, <strong>download a free copy of the report. </strong>If your banner is in our report and you'd like your custom brief, <a href="https://www.dunnhumby.com/unitedstates" rel="noopener noreferrer" target="_blank">contact us</a>. </p><h3><strong><br/></strong></h3>
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FOR RETAILERS
Smarter operations and sustainable growth, powered by Customer Data Science.
FOR BRANDS
Better understand and activate your Shoppers to grow sales.
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In the first episode of Customer First Radio, Dave Clements, Global Head of Retail for dunnhumby and David Ciancio, Global Head of Grocery for dunnhumby kick off the series by discussing what it means to be a truly Customer First business, share which retailers and brands today embody a Customer First mindset, and examine how Customer First materialized during the pandemic with retailers.
Customer First Radio Episode 2 | Erich Kahner, Associate Director of Customer Strategy at dunnhumby
January 11 2021
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The 2021 Retailer Preference Index: Who's winning and why. David Ciancio, Global Head of Grocery discusses the 2021 U.S Retailer Preference Index (RPI): Grocery Edition with the lead author of the RPI, Erich Kahner. They unveil key insights and discuss who is winning and who is best positioned for the future.
Prophets of Aisle Six, Episode 2: Heinen’s Fine Foods
January 03 2021
dunnhumby’s Prophets of Aisle Six, Episode 2: Heinen's Fine Foods
The Prophets of Aisle Six is the first online reality series focusing on innovation in the food retail industry. In this episode, Jose Gomes, dunnhumby's North America Managing Director, travels to the downtown Cleveland store of Heinen's Fine Foods. Jose meets with Tom and Jeff Heinen, co-owners and brothers, and learns how they are evolving their grandfather's mission of delivering excellent customer service. With 23 stores in Northeast Ohio and the greater Chicago area, and a 90-year legacy, Heinen's is proving that being a small retailer can be an advantage when it comes to data.
In this series, dunnhumby tours the globe and speaks with some of the world's greatest brands, exploring their biggest challenges and how they are using customer data science to meet those challenges.
In my last post, I posed five questions to retailers to help them determine whether they're ready for a customer-first mindset. Now, I'd like to challenge the retail basics that seasoned retailers were trained on, and suggest instead a new customer data science approach.
"Retail is detail" is common industry wisdom, and it means that achieving success is subtle and difficult. Success in any field demands practice and experience, and so it is little wonder that many senior retail and brand leaders and managers have vast years of involvement, and that most have grown up through the business in progressive steps.
<p>Accordingly, business decisions are heavily based on experience, and more often on personal memory of choices and executions and how a thing has traditionally been done. As Chris Foltz, director of operations at Heinen's Fine Foods, told me, "Our industry, and our company, was very opinion-based, albeit expert opinions. We realized early on that we needed data on customer needs, customer satisfaction and customer buying behavior to improve our decision-making. As we adopted this metric-driven approach, I believe we prioritized our investments and effort to deliver a better customer experience."</p><p>These are a just few of the things that most retailers absolutely know for sure:</p><ul class="ee-ul"><li>We must acquire new customers in order to grow our business.</li><li>Price-sensitive and "cherry picker" customers are not profitable. The competition is welcome to them.</li><li>Customers are different in every region of the country. There are also differences between urban and suburban shoppers.</li><li>Loyal customers are already giving retailers most of their spend in the categories offered.</li><li>Weekly flyers and promotions always drive footfall and sales.</li><li>After all these many years in the business, we know what customers want.</li></ul>
Why What We Know About Customers Just Ain’t So
<p>The old axioms are no longer factual because customers themselves have dramatically changed, in their needs, expectations and experiences. Separating fact from fiction—and business truths from myths—will change how the business sees itself and how it will make decisions. The following are some of the new truths of retailing in the 21st century:</p><ul><li>Expanding share of wallet from customers who are already "loyal" can better optimize growth.</li><li>Loyal customers need more love and investment than new customers.</li><li>Retaining loyal customers and reducing churn among "opportunity" customers can drive more growth than acquiring new customers.</li><li>Price-sensitive customers are often more profitable than other segments because their basket mix includes more private label products or higher-margin portion sizes.</li><li>Behavioral "buy-o-graphics" and intended trip missions matter much more than demographics or geographics.</li><li>Customer segments are typically distributed variably within geographic regions or zones, but all customer types exist in all stores.</li><li>Store clusters built upon customer dimensions are more useful to operations and execution than store groupings based on geographic zones or volumetrics.</li></ul>What We Know for Sure Can Fit on a Post-It Note
<p>Agility in retail can only be maintained by understanding customers and using data in all available quantitative and qualitative forms. Here's a personal story to illustrate:</p><p>A perception-based research tool measured one retailer's progress against factors that customers themselves had said are most important to them. Before the first customer perception report was published, I set out to learn how the customer ranking compared to the rankings that the senior decision-makers would assign.</p><p>The regular weekly senior team meeting brought together many of the wisest and most seasoned leaders in the business. After briefly introducing the research methodology, I asked the team to list what factors they thought customers would list as important, and in what order they thought customers would place them.</p><p>Not surprisingly, each merchant tended to rank factors in their department higher on the list than those for other parts of the store. Although little agreement was reached, a compromise ranking was eventually defined.</p><p>Comparing our list to the customers' list revealed spectacular differences; leaders had listed most of the same elements as did customers, but in completely the wrong order. That day, the team experienced a true epiphany—they realized that "we didn't know what we didn't know."</p><p>The lessons learned were:</p><ul><li>Humility gained in discovering that "we don't know what we don't know" empowers the customer-first journey.</li><li>To become more relevant to customers, we must become fact-based deciders and activators.</li><li>Using customer data well creates true consensus and inclusive action.</li></ul>In summary, “In God We Trust” ... all others must bring data.
<img lazy-loadable="true" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDYyMjA4MS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyMzA2MzY0MX0.IONHl7U4GvV1SELtCU05-gSd24MuhErJw9fkohPlDJU/img.jpg?width=980" id="0a481" class="rm-shortcode" data-rm-shortcode-id="acf695ac2df738141d48aee28b7b9861" data-rm-shortcode-name="rebelmouse-image" data-width="600" data-height="988" /><p><em>David Ciancio is global customer strategist for Dunnhumby, a pioneer in customer data science, serving the world's most customer-centric brands in a number of industries, including retail. David has 48 years' experience in retail, 25 of which were in store management. He can be reached at david.ciancio@dunnhumby.com</em></p>
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