Kroger CEO Walks the Talk
By Tom Ryan
With the help of dunnhumby, Kroger Co. believes it has more sophisticated
data on its consumers than any of its competitors. But chairman and CEO David
Dillon also frequently does "shopalongs" alongside core customers,
goes incognito on store visits, visits stores unannounced and even visits consumers
in their homes to inspect their cabinets.
He told The Associated Press that
other key Kroger executives follow much of the same routine.
"The data only tells you so much," Mr. Dillon told the AP. "Dunnhumby
tells me what to look for and I go in and see."
Through its joint-venture
with dunnhumby, Kroger gleans shopping behavior data from its loyalty card
holders, and also some 50,000 surveys with customers exploring four areas:
people, prices, products and services. Associates also partake in similar surveys
under its Customer 1st strategy.
"During the first half of 2010, our customers have told us, we continue
to make steady progress in each of the four key areas we target," Rodney
McMullen, president and COO, said on Kroger’s second quarter conference call. "We
continue to seek feedback from our customers and incorporate what they tell
us in our business plans."
Mr. Dillon told the AP that the combination
of the data along with the real-time view of store and home visits guides marketing
and merchandising decisions.
"We can use our own intuition, our own eyeballs, our own sense of how
the store should work, but that can be hugely enhanced by applying real data," he
For example, dunnhumby’s analysis indicated that shoppers’ use of food
stamps had doubled during the recession. Further visits to stores, however,
showed that first-time users often couldn’t figure out which items were valid
under the government’s guidelines. After himself witnessing one man struggling
with food stamps, Mr. Dillon pushed to add more informational signage to stores
and better train store employees to help clear up the issue for customers.
Questions: What insight do retailers gain from visiting stores or customer’s
homes that they can’t get from customer data? What is the most efficient
way to gain such honest input from customers? What are the pros and cons
of the methods mentioned in the article?
- Kroger CEO takes to the checkout to go beyond data – The Associated
Press/The Kentucky Post
- Kroger’s Second Quarter 2010 Conference Call – Seeking Alpha