Photo: RetailWire
Rick Ferguson, CLMP
Through a special arrangement, presented here for discussion is a summary of a current article from The Wise Marketer, a website and newsletter serving the global loyalty industry.
The old model of using customer data simply to target coupons – pioneered by Dunnhumby in the U.K. and Kroger in the U.S. – is now merely table stakes in grocery. Succeeding against Walmart’s scale and Amazon.com’s digital and delivery expertise will require grocers to orient their entire business model around customer insight.
A recent Wall Street Journal article detailed how Kroger’s data scientists are exploring ways to leverage data throughout the customer lifecycle and at every stage of their journey. Apps, for example, are being tested to offer suggestions based on whether the customer eats meat or needs help finding recipes for chicken.
“For store managers, meanwhile, a program is in the works to allow them to literally see how products are selling in a given aisle, using augmented-reality apps on their phones that show the prices and sales figures for the products found there,” according to the Journal.
This investment in analytical insight and digital delivery is designed to return food retailers, at scale, to the mindset of the corner grocers of a century ago who knew their customers so well that they could stock what they wanted and anticipate their needs before they came into a store. In theory, the investments also provide a competitive advantage that even Amazon can’t match: the ability to tailor shelves, communications and the in-store experience with a truly local flavor and reach into that store’s community.
Indeed, industry analysts predict that the successful grocers of the next decade will resemble Silicon Valley tech companies more than traditional grocers. Yet the game may be won by long-storied and venerable grocery brands that are reinventing themselves, such as loyalty marketing pioneer Tesco, where Dunnhumby first plied its trade 20 years ago.
According to Forbes, Tesco Labs has up to 50 projects underway at any time, conducting experiments with VR and AR, connected home devices, near field communications and mobile apps. Forbes wrote, “Applying cutting edge analytics and the most up-to-date data is the supermarket’s answer to dealing with obstacles ranging from evolving customer behavior, to facing up to newer competitors.”