What does it take to deliver on the promise of customer centricity?

Jun 29, 2016

It is clear that supermarket operators and other retailers need to invest in the products, promotions and services that matter most to customers, or they risk losing market share. Near-term success for food companies will require laser-focused attention on the needs and desires of customers, not only in the marketing department, but also in the merchandising department.

Walmart, with Savings Catcher, as well as Kroger, Target and Safeway, with their loyalty programs and mobile apps, and, most recently, Whole Foods, with its rewards program have all listened to their customers and created a unique experience that really engages the shopper. They are constantly gaining insight into the consumer’s behavior so they can better satisfy customer needs and capture more of their grocery spend.

US Foods has successfully implemented a customer-centric approach across departments and included assortment, pricing, customer marketing and supplier collaboration. They’ve put the customer at the center of everything they do, branding its customer centricity strategy “CookBook”. CookBook powers customer-centric, actionable insights through predictive analytics. These insights allow the company to deepen customer relationships. CookBook continues to expand as US Foods develops its customer centricity journey and, when fully deployed, the company believes it will create more value across all stages of the customer lifecycle.

US Foods and others have found that, to truly deliver on the promise of customer centricity, grocers need to pursue a series of integrated, customer-centric strategies and tactics. The benefits can be substantial, with leading grocers seeing ROIs of 5-to-8 times their customer centricity investments while competing effectively by satisfying the needs of shoppers better than the competition.

DISCUSSION QUESTIONS: How do you define customer centricity? What are the key success factors to fully deliver on the promise of customer centricity? What retailers do you think are most customer-centric?

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15 Comments on "What does it take to deliver on the promise of customer centricity?"

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Shep Hyken

Customer-centricity is a total focus on the customer. It means that every employee understands his/her role in the company and how it impacts customer experience. It also means that every decision that is made has the customer in mind. It doesn’t mean every decision will make a customer happy. Raising prices may not be a customer-friendly choice, but when the retailer decides to do so, they discuss and analyze the impact it will have on their customers, good and bad. They go forward with the answers in mind.

The other important point to remember is that customer-centricity may help define the retailer’s customer. A luxury brand will offer a different experience than a discounter. The retailer makes choices to keep the customers they want and to enhance the value of the relationship they have with those customers. There is no way to please everyone, and the retailer shouldn’t try. Focus on the customers you want — the customer base that will be loyal and help you grow through repeat business and word-of-mouth.

Chris Petersen, PhD.
Declaring that you are going to be “customer-centric” doesn’t mean much unless consumers “feel the difference.” Mr. McVie provides some good examples of adding value beyond products and price from the food industry. However, most of these examples are about marketing, loyalty programs and value-adds like “Cookbook.” Nothing wrong with any of those strategies, but from the eyes of the customer there is much more. One of the best ways to describe true consumer-centricity is letting customers “have it their way” … any time, anywhere. Omnichannel consumers not only want choice in when and how they shop, but how and where they take delivery. One of the biggest revolutions related to consumer-centricity in the food industry is the click-and-collect and home delivery options. HyVee and Kroger are revolutionizing how consumers shop and purchase their groceries. This requires major investments in systems, logistics and people in order to deliver the customer’s experience of when, how and where they want it. And oh by the way, one of the most consumer-centric retailers in the world chomping at… Read more »
Dr. Stephen Needel

I like Shep’s definition of customer-centricity. Key takeaway for me — you’re never going to please all the customers, or potential customers, in a marketplace. You can treat most of the customers well and make them feel like you care (whether you do or not is a different story).

And I’m pretty sure none of those loyalty programs create a unique experience that truly engages the customer. We’re shopping for groceries — how truly engaged does anyone think we are?

Ralph Jacobson

Customer-centricity is all about understanding your retail customers and delivering the right experience at just the right moment to create unbreakable bonds. Today’s consumers are empowered to shop and buy in entirely new ways. With a vast array of merchants and products at their fingertips, customer experience is one of the last controllable differentiators that shoppers care about. Responsiveness and agility are critical to delivering the optimal customer experience. Retailers must identify and acknowledge trends as they are happening and possess the tools to understand and derive insights to capture the mindshare of their target audience.

Tom Redd

Customer-centricity means and defines the customer as number one. Next, success in this area is not just about all the technology we hear about every day, it is about the humans that interface with the customers — be it in stores, online, service calls, etc. To fully deliver there is one common goal — make the customer HAPPY and/or SATISFIED. How? Train people up that work in stores, get greeters that TALK, train helpline people to really work at cutting wait times and drive assortments that are logical and maintained in the store (in-stock).

Who is good at this? The Home Depot, Kroger and my local BMW Motorcycle store.

Big retailers need to act like they are still small shops — as Kroger stores do. The change in business and trips per week will amaze them.

Ian Percy
I understand that very advanced technology and analytics are required behind the curtain to support a primary focus on the customer. Still, the biggest mistake would be to think that customer-centricity is a technology challenge. That would be like trying to improve a relationship with your spouse by emailing more often. My wife absolutely loves Safeway’s “Just for U” program. BUT we are loyal to the local store because they have a great team working there. Just yesterday in another store I was served by someone who clearly didn’t want to be there and even more clearly didn’t want to be serving me. In that situation I wouldn’t care what customer-centric technology they had. This is a little tangential and triggered by work I’m doing re: environmental pollution. I’m not talking about the ozone layer … I’m talking about in the store! The lighting, the scents, the quality of the air, the “off-gassing” of materials, electro-magnetic (EMF) contamination and on and on. Many stores are unknowingly assaulting both the customer and the employees. There are… Read more »
Kim Garretson
I worry about customer-centricity powered inordinately by predictive analytics. This tech is still making bets on “guesses” even though it sifts and sorts through big data to make its predictions. Let me give you a fresh, personal case-in-point: You would expect Google to be great at predictive analytics and yesterday there was a lot of media buzz about its enhanced predictive ability to serve ads of interest to each individual based on all of their activity within the Google ecosystem (except Gmail). I logged in to my dashboard to see the seven topics of interest Google has guessed will help drive the ads I see. Four of the seven I have zero interest in, and I can’t imagine what my past behavior within Google offerings made them guess “fashion modeling” and “Reggaeton” (which I don’t even know what it is). One of three topics that I related to, “banking,” must have come from my use of my online banking accounts. Does that mean I want to see ads for competing banks? Not likely, since I… Read more »
Richard J. George, Ph.D.

I tend to agree with many of the comments previously made. To me, customer-centricity is having the right blend of products and services (think Foodservice) available at the right time, right price, and right place. I realize there are a lot of “rights” food marketers need to consider, but each needs to be addressed if an organization claims it is customer-centric. In the final analysis, whether an organization is customer-centric is not a function of corporate announcements or PR campaigns. Instead, it is about customers declaring that the marketer puts them in the middle of all thinking and activities. It is like a customer stating, “Don’t tell me how good you make your products and services; tell me how good your products and services make me.”

Peter Charness

Agree that Shep has a good cover concept for this topic. It is the total experience that a retailer offers as it interacts with the shopper. I do think it starts with the product, and the assortment as the lead, and then goes back to basics as to how the Retailer communicates it’s offering, and interacts with the customer all the way through the purchase experience, research, order, and fulfillment. In principle, nothing new in this; in practice, the bar is incredibly high due to all the choice available to the customer, and all the technology available to make this experience easy and compelling.

Dan Raftery

I’m looking at a 12 inch tall stack of books published a quarter century ago under the joint industry Efficient Consumer Response (ECR) initiative. Kroger is one of the retailers who embraced the total system form the start. Meijer and HEB are two more. ECR was never proposed as a quick fix. Those who embarked on that long journey are still traveling the road to success.

Karen McNeely
Lots of good comments here from Shep & Tom and Ian’s comment about improving your relationship with your spouse by emailing more often not only made me laugh, but is spot on. To me, being customer centric is an attitude that happens with every interaction with the customer. It’s looking up and smiling at a customer when you are stocking and for goodness sakes, placing your cart of merchandise so customers can actually get through and moving it if it is in the way of them getting to what they are buying all without being asked. Adding a polite, “excuse me, let me move that for you” wouldn’t hurt. It’s genuinely greeting someone at check out, asking them how they are doing, and actually listening. It’s not asking them if they found everything alright if there isn’t a darn thing you will do about it if they didn’t (a huge pet peeve of mine! Either have a log that you pass along, or don’t ask!). Even better, it’s figuring out how to get it for… Read more »
Jeff Hall

The ability to deliver on the promise of customer-centricity is dependent upon:

  1. The customer experience being designed from both the brand lens and the customer lens. Too often, brands design customer centricy only from an inside-out perspective. Understanding customer preferences and priorities must also inform CX design. What is important to you might not be a customer priority, and vice versa.
  2. Enabling and empowering front-line associates to deliver on your brand promise, and the customer-centric expectations it creates, in such a manner that the experience comes across as intentional, consistent and authentic.
  3. Creating brand/organizational insights as to how well you are achieving customer-centricity — by measuring performance, rewarding the right associate behaviors and focusing on continual improvement around the key drivers having the most significant impact on satisfaction, loyalty and revenue.
Bill Hanifin

Successfully becoming more customer-centric is a matter of willingness to invest and maintain commitment to a strategic plan. It sounds so simple, but don’t miss the subtlety here.

Too many brands continue to talk the talk, but limit their potential for success through intermittent investment in data analytics, employee training, or their customer marketing initiatives. Becoming “customer-centric” is not a promotional plan that one runs over a particular fiscal year. It is an enterprise wide commitment to excellence that demands resources from many disciplines within the company.

As you evaluate this general statement, think about how many retailers talk about customer-centric strategies and invest, but later get off the track due to operational or financial pressure. In those moments of truth, we see retailers, grocers and others return to promotional campaigns highlighting coupons, discounts, and price driven marketing. While giving those benefits to customers are beneficial, they will always be tactics and do not sum up to make an organization customer-centric.

Herb Sorensen
This is a $15 trillion industry, and I want to explain why “customer centricity” is so difficult for the industry, that it is far more honored in the breach, than by actual CUSTOMER centricity. The most common exceptions to this are higher-end retailers who actually have sales personnel mediating a large share of their sales. For the self-service world (by far the largest share,) it is “crickets” for them. The reason for this is quite simple: self-service retailers are not really “selling” anything. They are merchant warehousemen, who build vast neighborhood warehouses, stock them, and wait at the door for their UNPAID STOCK-PICKERS, aka shoppers, to pick their own merchandise and bring it to checkout for payment. THIS is the accurate statement about who and what self-service retailers are. Ladling on concepts of “customer centricity” to them is like paint on a puppy. The reason is simple, beginning with the fact that the retailer must select from MILLIONS of items offered to them for display in their stores. They get that down to a few… Read more »
David Slavick

Deliver integrated customer-centric strategies and tactics. I honestly think grocery category companies talk a good game to justify customer compliance — identifying themselves at point of purchase and through online coupon selection, but they are not implementing at the individual/customer-centric level. Absolutely taking the data in and using it to inform their buying, display and logistics planning. The store is merchandised differently to accommodate the customer by unique location needs — CVS, and Walgreens in particular are best practitioners where no two stores are alike.

Engaging the customer upon entry to the store, providing real-time recognition and reward as they shop the store — a highly satisfying customer experience that drives basket metrics and lifts overall satisfaction — the category will get there … eventually.


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