Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.
While earning wide praise for its service from customers and for its fairness and refusal to use slotting fees from vendors, a weakness of Publix, observers say, may be in the area of technology.
Publix only recently established a presence on Facebook and YouTube, weekly ads are now available via smartphone app, and it just announced plans to test online ordering for in-store delis. It's also reportedly considering a paperless, digital-coupon program. The real problem, though, is the chain's lack of a loyalty or frequent shopper card, which would allow it to capture consumer data.
But, according to one source, "Publix doesn't believe its customers should be required to carry a card to get the best deals it offers. Finding value should be simple."
Moreover, the source says, other than Kroger, which has invested heavily in data analysis, most grocery retailers simply aren't using the consumer data they capture. As a result, their loyalty cards serve as little more than price discount cards, to which Publix is fundamentally opposed. The bottom line is, "Publix is doing just fine without a bunch of consumer data."
Well, for now anyhow.
As Publix moves into new markets where shoppers and competitors behave differently, its lack of data, and particularly shopper data, is likely to become more of an issue, says John Rand, SVP of retail insights for the Market Insight Group of Kantar Retail. For example, "Without the ability to track household level behavior, the company doesn't know what products shoppers aren't buying in its stores, so it can't provide an offer that encourages them to come back to Publix for those items. But they're already expanding into markets where companies like Kroger do have that data. And as they move up the East Coast, they'll quickly run into Ahold and Safeway, which have it too. So while it hasn't been a big problem up until now, it could become a real disadvantage."
As a result, adds Ginny Valkenburgh, SVP at Kantar Retail, vendors that do business — or want to do business — with Publix could find themselves in a better position if they've got shopper insights to share. In fact, several vendors say Publix already requires a lot of data, particularly for new items without a proven track record. Because of this, it's developed a somewhat conservative reputation. "It's definitely not a risk-taker," confirms one manufacturer. Lack of internal data to inform decisions regarding assortment could be one reason why.
Clearly, says Mr. Rand, Publix has won the home game, rolling over relatively weak opponents in Florida and a handful of other states. But now it's moving into markets where the competition is likely to be a lot stiffer.