retailer preference index - dunnhumby.com · keep up with each other's pricing and fend off...

© 2019 dunnhumby 1

Grocery Channel Edition

January 2019

dunnhumby Retailer Preference IndexThink, Feel, and Do

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• While the economy this past year has led to smooth sailing for many retailers, choppy waters are ahead. Price pressures are increasing, tariffs are introducing economic uncertainty, and digital grocery shopping growth is accelerating shifting shopper needs, behaviors and leading to retailer cost pressures. As a result, securing dollars as well as an emotional bond with Customers is more important than ever.

• dunnhumby’s Retailer Preference Index measures the strongest combination of financial performance and emotional bond and uncovers the factors that impact near and long term performance. 56 of the largest grocers in the U.S. are ranked from first to last, and this report examines how retailers rose to the top and how retailers can improve their Customer preference.

• Two needs rise above all others for most retailers and have the greatest weight in determining RPI ranking: Price and Quality. Together, these form the core of value perception. Stronger value perception results in better emotional connection and financial performance. Retailers that rank in the First Quartile overall excel in value perception and, as a result, have sales growth that is 2x greater than retailers in the Second Quartile and 9x greater than retailers in the Bottom Two Quartiles. The other Customer needs, like Digital, Speed, Convenience or Discounts/Rewards, while still important, are less associated with retailer preference.

• First Quartile retailers are mostly non-traditional grocers, who have developed a highly targeted offering designed to maximize value perception for their specific Customer. More traditional, regional grocery banners with a long history are hurting because of it, having relatively poorer performing financials and/or emotional bonds. This is because these traditional banners have inferior Price perception and/or Quality. Trader Joe’s, ranked first in our study two years in a row, is an example of a First Quartile retailer with a tailored offering designed to maximize value perception, while Peapod, 12th place in the First Quartile, is another.

• For some traditional, regional grocers, rewards and promotions are contributing to sales growth, and for many of them, this is adding fuel to the fire of financial difficulty. 71% of promotions aren’t profitable, and hundreds of millions of dollars are spent on discounts, rewards and promotions every year. To maximize the success of a discounts/rewards program, retailers need to have at least average price perception and a highly relevant assortment, supported by a strong private brand. This then helps drive promotion and rewards relevance.

• Private brand is a common key to driving value perception and improving Retailer Preference for retailers up and down the rankings. Six of the top 10 private brand performers are in the First Quartile of the RPI Overall. Additionally, many of the most successful traditional, regional grocers occupy the Second Quartile, and they complement a highly relevant assortment with a strong private brand, allowing them to maintain solid Price perception. Lastly, private brand is a key element in driving both Price and Quality perception and thus overall value perception, where retailers in the bottom two retailers are struggling the most.

• Retailers who rank high in Digital performance also tended to see slips in their Operations (i.e. out of stocks, pricing consistency, clean stores, right product variety). Retailers that ramp up investment in Digital must be cautious not to take their eye off the retail basics.

• Some retailers have achieved an excellent Digital Customer experience, but their financial performance has not benefited, while others with a focus on Digital manage to thrive. Retailers missing any of the following are not maximizing the impact of Digital investment: large scale, great price perception and a category DNA leaning toward center store items and non-grocery products.

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The grocery retail environment of the past year has led to smooth sailing for many, but there are signs that things are about to get tougher. Those retailers with the best combination of financial success and emotional bond with their Customers, as a result of an offering that is well-aligned with their Customers’ needs, will have the best insurance policy for the future.

As of the publication of this report, the economy is producing strong tailwinds for the grocery industry. Consumer spending is increasing, and consumer confidence in the U.S is at a near 18 year high thanks to 97 months of continuous job growth and U.S economic growth that is outpacing the rest of the world. 1 Additionally, while eCommerce in grocery has received a lot of headlines, digital investment is still as much a bet on the future as it is a result of business realities today – while about half of Customers shop online for groceries at least occasionally, only 3% to 5% of all grocery sales happened online last year.2

ContextState of the Grocery Industry

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However, there are also signs of choppy waters ahead:

• Price pressures are threatening margins. Downward price pressures come from those industry leader’s attempts to keep up with each other's pricing and fend off growing threats Amazon, Aldi and Lidl.3 Amazon’s grocery sales growth outpaces every other retailer in this study,4 Aldi is expanding their store count by ~50% in the next few years,5 and Lidl’s entry into the U.S market, while softer than initially advertised, have prompted competitors in areas they open to lower prices anywhere between 10% and 50%.6

• Tariffs recently imposed between U.S., China, and other countries have introduced uncertainty into long-term relationships that may yield unforeseen disruptions to the established global supply chain, further complicating cost and price management. Based on a 10% tariff on consumer goods, Walmart said that tariffs could threaten their margins, as one-third of its goods come from outside of the U.S..7 This threat is likely high for other grocers who have a category DNA leaning toward center store items sourced from China.

• The use of Digital not only as a channel, but as a source of information about food and shopping, likely only quickens the pace of evolution in shopper tastes and behaviors, requiring grocers to be nimble in their understanding of shoppers and agile in their ability to respond to shifts in behavior. Retailers are focusing investment on Digital, in an attempt not to be left too far in the wake of Amazon and digital investments made by industry leaders Walmart, Target, and Kroger. All are wary of the cautionary tale from Amazon’s entry in other industries, and they are worried the same may play out in grocery.

• Shoppers are continuing to buy from a wider variety of channels. This fragmentation has hit traditional grocery stores in particular, eroding their hold as the primary grocery destination over the past decade – in 2005, 67% of Americans used this channel as their primary destination, compared to only 49% today.8 Mass and warehouse began stealing share, and now convenience, dollar, digital, and restaurants are aggressively moving in. More targeted players have been able to zero in on specific shoppers with specific value propositions.

This report reveals which retailers are best positioned to win in the market, given current financial success and the emotional bond they’ve developed with their Customers. It also reveals how Customers prioritize needs when awarding retailers a share of their wallet and heart. Finally, it reveals several high-level strategies retailers have used to align their offering with Customer needs in order to maximize performance.

1 Bureau of Labor Statistics (consumer spending), The Conference Board (consumer confidence), Bloomberg (U.S economic growth), New York Times (job growth). October 2018.2 Progressive Grocer, Grocery Dive. October 2018. Food Marketing Institute, 2018.3 Food Marketing Institute, October 2018.4 Planet Retail, 2018.5 Supermarket News, August 2018.6 CNBC. January 2018.7 New York Times, September 2018. Bloomberg, October 2018.8 Food Marketing Institute Grocery Trends 2018.

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• Price• Quality• Digital• Convenience • Discounts, Rewards & Info• Speed• Operations

PREFERENCE DRIVERS

• Satisfaction• Likelihood to recommend• Trust• Intensity of attachment

EMOTIONAL CONNECTION

• 2017 marketshare• Sales Growth - 5yr CAGR• 2017 Sales per square foot

FINANCIAL PERFORMANCE

PREFERENCE PROXY

Data used in the statistical modelling was gathered from publicly available financial data and a customized, online survey of ~7,000 U.S. households. We used financial measures of size (grocery market share), efficiency (grocery sales per square foot), and recent growth (grocery sales growth). We used emotional measures of trust, intensity of attachment, satisfaction, and recommendation.

The main differentiator between our approach and other approaches to rank retailers is that our ranking results from a combination of financial success, emotional bond, and performance on preference drivers. Other lists typically produce simple ranks of retailers on just one of these dimensions. The result of using only one of these dimensions is that the industry has conflicting accounts of which retailer is “best”, and those lists often don’t associate what retailers do (preference drivers) with resulting emotional connections and financial performance.

Our Methodology for the Grocery Retailer Preference Index

Our rankings are a result of a statistical model that predicts how retailer execution on various Customer needs impact emotional bonds and financial success. The resulting emotional bond and financial success is how we measure Customer preference: the Retailer Preference Index (RPI).

How We Measure Retailer Preference

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The Pillars of Emotional Bond and Financial PerformanceHow Shoppers Prioritize Needs

All Customer needs are important, but some are more important than others. Retailers that make trade-offs in their investments – by focusing finite resources on delivering excellence on some needs while diverting resources from other, less important needs – will stand out from the pack and win Customer preference.

The Customer needs, in order of their importance in earning Customer preference are:

Perceived Prices – Lower than the competition

Quality – Right items, in a clean store, with helpful employees

Digital – Simple and easy ways to shop online

Operations – Out-of-stocks and pricing consistency

Convenience – Location, one-stop-shop-ability

Discounts and Rewards

Speed – Get in and out quickly

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RPI Pillar

Prices Lower prices than other stores, Fair prices on organic/natural items

Product freshness and quality, private brand, prepared foods, natural and organic, product variety

Store experience includes customer service, store cleanliness, whether or not it offers an upscale experience

Easy ways to shop online or with an app

Out of stocks, price consitency

Convenient locations and ability to do all shopping at one store

Relevancy and ease of redeeming discounts/coupons, rewards for shopping, provides relevant information

Easy to get in and out quickly, speedy checkout

Quality (Assortment + Store Experience)

Digital

Operations

Convenience

Discounts, Rewards & Information

Speed

Primary Drivers in Pillar

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Why Some Needs Emerge in Our Study as More Important Than Others: Price Versus Speed

Readers may ask themselves, why is Price, in general, deemed as the most important Customer need and Speed the least? The answer is that prices demonstrate the clearest combined relationship to both emotional connection and financial performance, while Speed demonstrates the most opaque relationship.

Price has a stronger positive correlation with financials, while Speed actually has a negative (albeit weak) correlation with financials. This doesn’t mean that Speed hurts financial performance. It just means that being superior on Speed is not commonly associated with strong retail financials. Speed may be a key cog in a retailer’s success but only in rarer cases and, only if Price and/or Quality are already strong (see Trader Joe’s and Amazon).

1st Quartile2nd Quartile3rd Quartile4th Quartile

Price’s Relationship to Financial Performance(composite of Share, Sales Growth, Sales/Sq Ft)


Speed’s Relationship to Financial Performance(composite of Share, Sales Growth, Sales/Sq Ft)

*shows positive correlation between Financial Performance and Price

*shows a weak, and negative correlation between Financial Performance and Speed

Better

Financial Performance

Worse BetterPrice

Better


Worse BetterSpeed


Price also has a strong positive correlation with emotional connection. Speed has a positive correlation with emotional connection as well, but it isn’t as strong as Price.

When examining these correlations with financials and emotional connection, two needs rise above all others for most Customers: Price and Quality. If a retailer does not excel at one or both of these, it’s going to have trouble maintaining Customer visits and basket spend when faced with a competitor who does, especially when economic times are tougher and when competition intensifies. Price and Quality, considered together, can be thought of as the two biggest facets of value perception - or what Customers feel like they’re getting for what they’re paying.

The other Customer needs, like Digital or Convenience, will almost never earn strong Customer preference for a retailer if value perception is poor, even if they deliver those other needs better than any other retailer in the country. A retailer could implement a Digital strategy to rival Walmart and Amazon, but if they have poor Prices, Quality or both, their financial success and emotional bond will suffer. Any issues with Prices and Quality must be prioritized before additional investment in Digital or any of the other supporting pillars.


Price’s Relationship to Emotional ConnectionBetter

Emotional Connection

Worse BetterPrice

*shows positive correlation between Emotional Connection and Price


Speed’s Relationship to Emotional Connection

Better


Worse BetterSpeed*shows a weaker positive correlation between Emotional Connection and Speed


Rank

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The First Quartile (Ranks 1 – 13)

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Who Are the Winners?

Trader Joe’s is a prime example of a retailer making trade-offs in order to deliver superior Value, and it has earned them the top spot in our rankings two years in a row. With its small format, lack of Digital shopping and limited national brand offering, the retailer focuses on speed of in-store shopping and having a rich Private Brand offering. This bricks and mortar only, Private Brand approach minimizes costs and keeps prices low, allowing them to pad margins and reinvest in Customer service, product quality and in-store experience. This strategy sacrifices reaching Customers through a growing Digital channel and breadth of assortment – particularly in non-food items – and therefore Trader Joe’s loses on one-stop shop-ability and convenience. However, this loss is also their gain, since it allows them to be excellent at what matters most to their Customers.

If some retailers in the First Quartile come as a surprise, remember that both financials and emotional connection matter. These retailers tend to have the strongest combination of financial performance – when looking at a composite of market share, sales growth and sales efficiency – as well as emotional connection with their shopper base. Retailers not appearing in the First Quartile may score very highly on one or two dimensions, but they don’t excel on enough dimensions or fall too far down on either Price, Quality or both to make the First Quartile.

Ranking in bold Any changes in ranking among First Quartile retailers from last year are within the expected margin of error

What to watch out for next

Only the ranking of the First Quartile overall is revealed in this report, but strategies retailers use to reach and compete with the First Quartile are discussed in detail. Briefer reports revealing who are in the top quartile for each of the Preference Pillars (Price, Quality, Digital, Operations, Discounts/Rewards, Convenience and Speed) will be published by dunnhumby throughout 2019.


Retailers with higher RPI rankings have stronger value perceptions, which correlates with higher financial and emotional performance.

Why a Higher-Ranking Matters

1.92

U.S Grocery Market Share (%), by Overall RPI Ranking Quartile

0.96

0.36 0.44

4th Quartile3rd Quartile2nd Quartile1st Quartile

842

Total Sales Per Square Foot (ft), by Overall RPI Ranking Quartile

636 634

466


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Emotional Connection (standard deviation from average retailer score), by

Overall RPI Ranking Quartile

0.31

-0.80


-0.08

9.0

U.S Grocery Sales 5 Year Annual Growth Rate (%), by Overall RPI Ranking Quartile

4.8

1.80.8


1st Quartile Sales Growth 11x Higher than 4th Quartile


In addition to having the best value perception, the retailers in the top are also distinguished from most of the rest by their targeted real-estate and value propositions. Many of these First Quartile retailers entered the grocery sector in earnest only in the past few decades. They are mostly non-traditional grocery formats, typically with either much smaller (limited SKU, specialty formats or digital pure play) or much larger (mass merchants or club warehouses) stores compared to the traditional regional grocers with average store sizes in the 35,000 to 65,000 square foot range.

The First Quartile retailers – unlike most traditional grocers – have been able to carefully select the store locations that best align their offering with the right local Customer base. Traditional grocers, by contrast, are operating with a store base configured for success in a different era, when their dense store count in a region signalled to shoppers they were a local institution, and their extensive SKU count allowed shoppers to get everything they needed in one place.

Any one of these First Quartile retailers may not be able to meet all of a given shopper’s needs, because they have limited SKUs or execute well in certain categories but not others. However, shoppers’ willingness to shop multiple stores enables them to stitch together a whole grocery basket by visiting only First Quartile retailers. As a group, the First Quartile is a threat to every traditional grocer.

This superior Value offered by First Quartile retailers is too compelling for shoppers to ignore. So compelling in fact, that shoppers have formed deeper emotional bonds with these retailers in a shorter amount of time than regional grocers were able to build up with their local constituency over decades. And shoppers’ dollars have migrated along with their hearts.

Number of Grocery Retailers in the RPI, By Average Store Size: First Quartile Retailers vs Retailers in the Bottom Half

First Quartile Retailers(typically non-traditional grocery formats)

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6

<35,000 sq ft

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6

35,000 to 50,000 sq ft

50,000 to 65,000 sq ft

>65,000 sq ft

Bottom Two Quartile Retailers(typically traditional, regional grocers)

13

1

<35,000 sq ft

11

3

35,000 to 50,000 sq ft

50,000 to 65,000 sq ft

>65,000 sq ft


The Importance of Value Perception: The Key to Improving Customer Preference and Financial PerformanceStores that maintain high Quality perception, while also having higher overall preference and performance largely do so by making quality-focused investments that do minimal to no damage to Price perception. Most Customers don’t want to feel like they are shopping an “expensive” store. However, at the same time, Customers want high Quality for the Prices they pay. Retailers that have found out how to deliver Quality where it matters most to their Customers, while making focused, coordinated efforts to control pricing, win the value perception game and, as a result, deliver superior preference and performance.

Retailer’s Actions

As perceived Quality increases, value perceptions increase

As perceived Price increases, value perceptions fall

Customer Preference and Financial Performance

Value Perception

Quality

Price


It is no surprise that the average First Quartile Retailer achieves superior Price and Quality perceptions.

Of course, there are some exceptions to this rule, but those exceptions tend to provide Quality (e.g. The Fresh Market) or Price (e.g. Aldi or Walmart) that is so clearly superior to most everyone else that they could afford to have less than superior perceptions on the other side of the value equation and still have superior value to retailers in lower Quartiles.


Value Perception’s Relationship to Financial Performance (composite of Share, Sales Growth, Sales/Sq Ft)


Value Perception’s Relationship to Emotional Connection

*shows positive correlation between Financial Performance and Value Perception

*shows positive correlation between Financial Performance and Emotional Connection

Better


Worse BetterValue

Perception

Better


Worse BetterEmotional

Connection


Even getting to simply average, let alone being above average, on Quality and Price can boost finances. The typical 2nd Quartile Retailer is about average on both, and their growth rates are almost 3x higher than the 3rd Quartile Retailer (below average on Price) and 6x higher than the 4th Quartile Retailer (below average on Price and Quality).

Getting to average or above average on both Quality and Price pays, but it isn’t easy for a retailer who isn’t already there. And those retailers already there tend to have differentiated formats and operating models, compared to the lower quartiles, which are populated mostly by traditional supermarkets. For any store looking to make improvements in Quality or Price, they will have to make smart, well-informed decisions so that any Quality improvement doesn’t too adversely impact Price Perception (and vice-versa).

Grocery Retail Landscape 2018: Value Perception

Average First Quartile Retailer5 YR Sales CAGR: 9.0%

Average Second Quartile Retailer5 YR Sales CAGR: 4.8%

Average Third Quartile Retailer

5 YR Sales CAGR: 1.8%

Average Fourth Quartile Retailer

5 YR Sales CAGR: 0.8%

Better

Quality

Worse BetterPrice


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The Importance of Price

Maintaining a well-informed perception of a retailer’s Prices could potentially take a lot of work for a shopper. There are practically an infinite number of grocery items to consider, each with a variety of price-related information, across the multiple stores they could likely shop. As a result, they take shortcuts when storing and updating price perceptions. They rely on automatic, subconscious thinking to make these everyday decisions, which is more error prone than the slower, more effortful and thus more reliable decision-making for more complex decisions. Retailers that understand those shortcuts and focus their attention on managing prices in those areas that Customers pay most attention to, will win the price perception game.

Despite the wealth of commentary in the news committed to Customer needs surrounding Convenience, Digital and having the most on-trend products, Price remains more important to most shoppers--even those who have higher than average income. Few retailers secure superior Customer preference and financial performance by waving the white flag on Price and pursuing a Quality-dominant focus, and Price-only promises to demand more and more retailer attention in the future.

• Amazon and Walmart have a proven ability to flex their economies of scale and undercut prices of the competition and will likely respond similarly to an Aldi and Lidl expansion. Given that Aldi can flex back with their own powerful and growing economies of scale, retailers who cannot engage in this back-and-forth must find their own ways to address Price and value perception or become collateral damage

• Aldi, a leading Price competitor, plans to increase its store count by 50% over the next few years, until it becomes the third largest grocery retailer in the U.S. by store count

• Lidl has designs for a US expansion--and in markets where Lidl has entered, competitors have lowered prices between 10% to 50%

• Costco’s CFO has expressed an urge to be first to market when it comes to price drops and will likely look to cover or beat the moves of Amazon, Walmart and competitive entrants

Shoppers’ behavior is likely to be influenced by the increased Price transparency brought about by the rise of digital and mobile shopping behaviors

Deep Dive into Price


Drivers of Price

There are many drivers in this study that determine overall Price Pillar ranking. However, some are more important than others, and the drivers with the most weight can be divided into primary drivers of Price rank and secondary drivers of Price rank.

For the drivers of Pillars, dunnhumby measured what the desirable outcomes for Customers are, in their own opinions, at a 30,000 foot level.

Primary Drivers of Price Pillar Ranking

Prices are lower than other retailers

Offers fair prices on natural/organic products

Secondary Drivers of Price Pillar Ranking

I love their private/store brands

9 Reuters, December 2018. Wall Street Journal, September 2017.10 Supermarket News, August 2018. Reuters, December 2018.11 CNBC. January 2018. Business Insider, February 2018.12 CNN, September 2018.


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Winners in Price

Just as we can determine rankings for RPI Overall, we can determine ranking for each of the Pillars that determine the Overall RPI Quartile. Retailers in the First Quartile in Price held fairly steady in their Price rank from last year.



Aldi, with their focus on Private Brand, small format and stripped-down operations, and Walmart, with their Every Day Low Price (EDLP) message, scale, and use of data to efficiently manage their supply chain, have well-documented approaches to achieving Price pillar leadership.

WinCo, a small regional grocery retailer whose ~120 stores are located primarily in states west of the Rockies, has managed to hold a place atop the Price pillar with these multinational giants.

They have many tactics and ways of operating that not only earn them low-price leadership, but also a place in the First Quartile for Operations. This combination of Price and emphasizing Quality in the right places with a focus on the retail basics earns them First Quartile status in the RPI Overall:

A Look at a Price Leader: WinCo

• They focus on delivering better store experience in the fewer areas that matter most to their lower income target Customer. Compared to other stores that have a similar target Customer (e.g. Walmart and Foods Co/Food4Less), WinCo has cleaner stores and are better at managing out-of-stocks. Unlike many grocers, they don’t appear to have invested much in Digital, offering only limited click-and-collect offerings, which allows them to continue to invest in smooth store operations and low Prices.

• Their no-frills approach has allowed them to focus on another area of retail basics:having the right variety of products Customers want – another area where they beat their low-price competitors. As a result, this, in combination with low Prices, has earned them a greater share of full-shop trips from their Customers.

• While their store staff may not earn the highest marks from a Customer’s perspective, being employee owned has contributed to what is likely lower than industry average turnover (at least 400 front-line employees have stayed around long enough to become millionaires due to WinCo’s ESOP), which in turn leads to a more motivated, knowledgeable, and efficient employee base. And lower turnover means lower overhead, which means more room to lower prices and have competitive profit margins.

• WinCo receives raves from Customers about its extensive offering of bulk foods. A wide variety of bulk foods likely means less time spent on stock keeping and a more cost-efficient labor force.


And Customers express their appreciation of this low-price leadership and approaches to achieving it:

This is my go-to place for when I'm trying a new recipe and don't want to buy a full bag of that specialty flour. Their bulk section has plenty of options and I only have to buy enough to try that recipe.

WinCo has a lot of items that are sold much cheaper than other big stores like Walmart. I love their wide variety of bulk food items (in containers where you scoop them into a baggie). Their bulk food concept sets them apart from the other stores.

They have some of the lowest prices in the [central California] valley, and their products are high quality.


The Importance of Quality

Quality, along with Price, is the biggest determinant in driving Customer preference and financial performance. Our study revealed that shoppers do not generally distinguish between the quality of the assortment and the quality of the store experience. As a result, it is very hard for a retailer to have high quality marks on one but not the other. This means that to improve the Quality perception of their assortment, they must also improve the Quality perception of their store Experience. Stores that do this win the Quality perception game.

Determining the right assortment is becoming more challenging as shopper preferences swiftly change:

• Health and wellness support from grocery stores continues to be in demand. 57% of shoppers say they expect health and wellness help from their primary grocery store, right up there with health and fitness clubs, a booming industry. This has clear implications for assortment and store experience.

• Better quality for the money is a growing need. Private Brand sales growth is outpacing growth of national brands, even in upscale products, where Premium (Tier 5) Private Brand sales are growing the fastest, at 10.6% in 2017.

• Many of the biggest CPG brands recently lost market share to smaller brands.

• These niche brands will only become more available to consumers. To offset share declines for their heritage brands, the big brand manufacturers are acquiring the once-small and local brands and distributing them to a wider base of retailers.

• Shoppers are relying more on the store to fulfill their needs for quick meals, particularly in a stronger economy when more people are employed and there is less time to cook. In-store meal kit sales grew rapidly in the past year, up 26.5% . To keep shoppers coming back for meal kits, retailers will need to continue to innovate to ensure shoppers won’t get bored of the same eating options.

Quality fresh food is being democratized, no longer a hold of the traditional or high-end grocer. Aldi has plans to expand their fresh offering by 40%, as retailers from up and down the price spectrum – including dollar and convenience store competition – invest in fresh.

Drivers of Quality

Deep Dive into Quality

FPO

13 Food Marketing Institute Grocery Trends, 2018.15 Forbes (fitness industry), September 2018.16 Food Navigator, Nielsen. April 2018.17 Ad Age, Catalina. September 2015.18 Forbes, July 2018.

Primary Drivers of Digital Pillar Ranking

Has the freshest meat, fruits and vegetables Offers the highest quality products

Offers appetizing prepared and ready to eat foods Offers a wide variety of natural/organic products

Look & feel of the store is up-scale/high-end My store is clean and well-maintained

I love their private/store brands Staff make me feel valued

The retailer has easy ways to shop online Sends me useful information

Secondary Drivers of Digital Pillar Ranking

Offers fair prices on natural/organic products


Retailers in the First Quartile for Quality held fairly steady in their Quality rank from last year.


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Winners in Quality

Mostly non-traditional grocers, who have developed a highly targeted offering designed to maximize Value Perception for their specific Customer.

More traditional, regional grocery banners with a long history are hurting because of it, having relatively poorer performing financials and/or emotional bonds.

19 Forbes, March 2018.20 Supermarket News, August 2018.


ADD NEW CHART FROM WORD DOC

Private Brand: A Lever That Correlates Strongly to Both Quality and Price Having a Private Brand Customers love, more than any other lever measured in this study, influences both a retailer’s Price and Quality perceptions. Therefore, it is no surprise that Private Brand is one of the most efficient levers to pull to increase Value perception and, as a result, overall Customer preference and financial performance. Out of the 10 best Private Brand performers in the U.S., five are in the First Quartile of the Overall RPI.

Private Label's Relationship to Emotional Connection

Private Label's Relationship to Financial Performance (composite of Share, Sales Growth, Sales/Sq Ft)

*shows positive correlation between Emotional Connection and Private Label Perception

*shows positive correlation between Financial Performance and Private Label Perception

Better


Better


Worse

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Private Label Perception

Private Label Perception




For them and other retailers, own label offers a variety of benefits, beyond better profit margins:

• Private Brand offers superior growth. From 2013 to 2017, Private Brand grocery sales grew at an annual rate of 2.0%, compared to just 1.2% for national brands. That pace seems to be accelerating. In 2017 alone, Private Brand grocery sales grew 3.0%, while national brands sales actually shrunk -0.5%.

• A Private Brand with an entry price point or simply a price point that is clearly competitive to the national brand can bring a positive price halo to the store image.

• It can act as a branding vehicle, representing who the retailer is to its Customers and satisfying their need to shop somewhere that shares their values. Branding is one opportunity for traditional, regional grocers to evolve beyond a reliance on letting the store speak for itself. Cohesive branding is especially crucial since the store may sometimes be a result of siloed efforts on the part of merchandising, pricing, and operations managers to hit sales and cost targets.

H-E-B: A Leader in Quality and Private Label

Regional retailer H-E-B, based in Texas, thrives on the Quality it offers its Customers, which places it in the First Quartile overall, right up there with non-traditional grocery retailers Trader Joe’s, Costco, and Amazon. How can this traditional, regional retailer maintain such a high standing among the industry’s disruptors with a Quality-first focus? The answer again lies in focusing on Private Label, Quality in the right places, and delivering on retail basics to run a smooth, cost-efficient retail operation -- all of which keep their Value Perception from suffering too much.

• H-E-B may grab headlines for the Quality of its experience and products, but their value perception, while not clearly superior to the majority of the market, is above average. They likely maintain this with a focus on providing a superior Private Brand offering. Their Private Brand scores are equal to that of well-known Private Brand leaders Costco and Trader Joe’s. This focus allows them to provide higher Quality products at more competitive Prices.

• This focus on Private Brand underscores H-E-B’s focus on getting their overall product selection right. They also have some of the highest scores in the study for having the right variety of products to meet a Customer’s needs.

• At least some of their stores demonstrate smart approaches to store operations – instead of an “invisible” storeroom far removed from the floor, the storeroom frames up the entire store in a narrow extra ring, with products stored as close as possible to where they are stocked. This cost-efficient approach to assortment selection and stock keeping likely allows them to maintain higher levels of Quality at lower Prices while preserving margins.

• Some of their stores clearly provide a unique experience with solid Customer service. They have effectively executed the “store within a store” approach, offering clear signage indicating where things are. They have trendy sections (e.g. a whole set for those on the Paleo diet) and they showcase their local Texas pride throughout the store, featuring local Texas products. They do this without appearing to be too upscale – just clean and well-maintained.

21 Nielsen, December 2017.


And Customers Have A Lot to Say...

They are personalized to you. They will bring an electric cart to your [car]. They will actually assign someone to help you shop. What more can you ask for? This is the only store that I know that offer these services.

Great produce, especially fruit, and their selection is massive. The store brands are very high quality.

Their weekly grocery ads help me plan my shopping trips. With H-E-B Organics, Central Market Organics, and other H-E-B house brands, I get all the products I need.


...About H-E-B

I love their Central Market store that has in house roasted deli meats, more imported foods and cheeses and harder to find produce items.

Local, a Texas Tradition, great prices, wide variety and selection, excellent store brands.


The Importance of Digital

Digital’s hold on the attention of the grocery retail world may seem outsized, given the small share of grocery sales it represents and the hurdles to adoption presented by fresh categories. However, more and more Customers are at least giving online grocery shopping a try, with the number of people at least occasionally buying groceries online doubling in the past year, to about half of U.S. shoppers. Challenges facing retailers as they determine Digital’s place in their offering:

• Shoppers’ biggest barrier to shopping fresh is their lack of trust in others to pick perishables like they personally would.

• Enhancements to Digital means hefty investments in technology and fixed costs, which can put these investments out of the reach of smaller, regional retailers who lack the cashflow and scale to pay for them.

• Meanwhile, larger retailers – like Walmart, Target, and Kroger – can quickly ramp up their Digital operations through acquisition of pureplay online or delivery companies, and they can afford to sink money into internal Digital research and development. Additionally, with 90% of Americans living within 10 miles of a Walmart, they have a significant advantage in the click-and-collect game.

• While fresh is a hurdle for shoppers, Digital as a convenience is also mixed. Although the shopping and checkout experience itself can be speedier online, for many shoppers having to be at home at a certain time to receive their fresh groceries from delivery is a bigger inconvenience than dropping in the store at whatever time fits into their schedule.

• Also, many shoppers just enjoy the experience of shopping in the grocery store, with some of those reasons being: 1) the ability to browse and put unanticipated food discoveries or things they forgot they needed in their basket, 2) the ability to more easily scan products on the shelf versus navigating product pages on a website, and 3) the ability to experience the ambiance, staff, and food service a store can provide.

Digital platforms that best capture the in-store-like sense of exploration and ability to tailor to personal tastes, while also maximizing its convenience and ease of use, will win out, provided the platform supports products with strong Value perception.

Deep Dive in Digital

Drivers of Digital

Primary Drivers of Digital Pillar Ranking

The retailer has easy ways to shop online

Sends me useful information

Secondary Drivers of Digital Pillar Ranking


22 Food Marketing Institute, 2018.23 dunnhumby proprietary research, online shopper focus groups and online survey, 2018.24 Forbes, March 2018.



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25 Washington Post, August 2017.26 dunnhumby proprietary research, online shopper focus groups and online survey, 2018.

The Digital Pillar saw more movement in the rankings up and down the Quartiles, compared to almost any other Pillar (with the exception of Operations). Given that Digital is a relatively new capability for retailers and consumers in large numbers are only now becoming more familiar with digital options, greater turbulence in the Digital ranks is unsurprising.

Retailer performance on the Digital pillar, as with any RPI Pillar, is measured from the Customer perspective. Retailers that have the easiest online shopping experience, best app and most useful product and shopping information will rank higher in the Digital pillar.


How Digital Can Be an Amplifier for Retailers… For a Certain Type of RetailerRetailers must carefully consider if they already have the right offering in place to maximize their investment in Digital. A close look at the retailers in the First Digital Quartile reveals keys to what types of retailers are best positioned to capitalize on Digital investment.

The retailers with the best Digital experience in the eyes of Customers fall into two groups: those thriving financially and those who are simply treading water. Both groups are delivering superior websites and/or apps that make shopping easier, but the five-year grocery sales CAGR for Thrivers is, on average, a phenomenal 11.1%, while those treading water with an excellent Digital experience have growth rates that are practically flat, at 0.02%! So, beyond just offering an excellent Digital experience, what are the hidden keys that allow Digital to drive success?

Retailers with Superior Digital Customer Perception in the U.S.:An Amplifier If The Retailer Is Already Positioned For It

Group 1: 9 Retailers Thriving Financially

Group 2: 7 Retailers Treading Water Financially

Digital Quartile *All in the First *All in the First

Overall RPI Quartile *All in the First All in the Third

5 Years Sales Growth 11.1% 0.02%

U.S. Marker Share (of average retailer in group) 2.7% 0.5%

*Or 2 or less ranking spots out (but within the margin of error of being in the First Quartile)


The Thrivers are big—and with Digital being a relatively new channel, they were likely already big before Digital grocery sales growth started to accelerate. Scale matters if Digital is going to be an amplifier of retailer success.

Additionally, an examination of the value core and the product categories these two groups offer yields other answers. You must be good at Price if Digital is going to drive success, and you need to be a desired destination for center store products, but not necessarily fresh products.

Digital retailers treading water financially have superior fresh Quality and a more up-scale experience, but they have weak Price perception. On the other hand, Digital retailers thriving financially are thought of as a destination for center store products first and foremost:

The call to action for any retailer investing in Digital is to ensure that they have a well-priced offering of digitally in-demand, center store products as well as the scale within its footprint to reach a wide audience. Otherwise, Digital as an amplifier of financial success is in doubt.

Retailers with Superior Digital Customer ExperiencesValue Core: Prices and Quality

Prices are lower than other retailers

Offers fair prices on natural./organic products

I love their private/store brands

Has the right variety of products to meet my needs

Offers a wide variety of natural/organic products

Offers appetizing prepared and ready to eat foods

Has the freshest meat, fruit and vegetables

Offers the highest quality products

Look and feel of the store is up-scale/high-end

Store is clean and well-maintained

Staff make me feel valued

Thrivers are better than Treaders

Treaders are better than Thrivers

Retailers with Superior Digital Customer ExperiencesCategory DNA

Thriving Financially Treading Water Financially

Non-grocery products (clothing, jewelry, etc.)

Common HH Items (toilet paper, paper towel, cleaning supplies, etc.)

Packaged Food

Fresh Meat

Fresh Produce

RTE Meals

Dairy

Meat from the deli

Seafood

Services (banking, pharmacy, etc.)

Thrivers are better than Treaders

Treaders are better than Thrivers

Thriving Financially Treading Water FinanciallyBelow Average Above Average

Below Average Above Average


The Importance of Digital

Customers don’t have insight into the processes and systems the corporate office and store managers use to run retailer operations, but Customers do feel the results of those practices: how well out-of-stocks are managed, whether or not the store chose the right products to stock in the first place, how much sense the pricing makes, and how well-maintained the store is.

These retail basics are as important as ever, in an increasingly digital and fragmented grocery landscape, where price and product information are more transparent and access to different retailers’ assortments is easier to browse and buy.

Deep Dive in Operations

A Deeper Look at the Operations Pillar

Primary Drivers of Operations Pillar Ranking

Does not run out of the items I buy regularly

Does not change prices too often

Secondary Drivers of Operations Pillar Ranking


My store is cleaned and well-maintained



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Winners in Operations

Maintaining a focus on the retail basics can be difficult in a grocery market where Digital is demanding attention. However, this focus can pay off and is one of the most pressing points of weakness, outside of Price, for many traditional, regional grocery banners. Therefore, it is an important area for these retailers to address to increase Customer preference and financial performance.

Many retailers in the First Quartile of Operations held steady, signalling their consistent commitment to the retail basics.


Many retailers have been investing their dollars in Digital to catch up to first-movers and take advantage of the growth of sales in digital channels. It is perhaps because of this growing emphasis on Digital and consumers’ growing familiarity with different digital offerings that Digital experienced larger ranking swings within the pillars than most other pillars. The average retailer moved up or down nine spots in Digital pillar ranking, beyond the expected margin of error.

Operations is also connected to some stark shifts in rank and weight in driving Overall RPI ranking, from this year to last. It is no coincidence that Digital and Operations are the two pillars experiencing the most volatility. Based on an analysis of the data, it appears that Operations ranks are closely tied to Digital ranks. The better the Digital rank, the worse the Operations rank.

Digital's Impact on Operations

OPERATIONS

Average Pillar Rank Changes (+/-)

DIGITAL

CONVENIENCE

QUALITY

SPEED

PRICES

DISCOUNT, REWARDS, INFO

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27 Forbes, March 2018.


We cannot narrow the source of the problem down to one area, such as whether retailers are struggling with digital fulfilment of food and non-food products, or if using stores as click-and-collect fulfilment centers is adversely impacting store operations. However, we can assume that as retailers face a learning curve in how to manage these emerging capabilities, we may continue to see Digital investment impact perceptions of how smoothly an organization is running its operations. Of course, certain retailers, due to excellent execution, may be better at managing this transition than others. Costco, who has recently focused their Digital investment carefully on the easy wins that Customers also value , is one example of this, maintaining superior Digital and Operations scores.

The Relationship Between Digital and Operations

Better

Operations

Worse BetterDigital*shows that the better DIgital is, the worse Operations is


Deep Dive in Discounts, Rewards, and InformationThe Importance of Discounts, Rewards and Information

Shoppers face a diverse world of food choice and food information. With this comes the opportunity for shoppers to find food solutions that are closely personalized for their needs and preferences. However, this, along with a shoppers’ desire to get the best Value, makes finding the right food at the right price a navigational headache for shoppers.

The retailers who use their Discounts, Rewards and Information as a personalization engine to point shoppers in the right direction can earn stronger Customer preference and financial success. By contrast, the retailers who continue to throw a lot of money at discounts and promotions just to make sure some of them stick, will also throw fuel on the fire of financial trouble. With estimates of promotional dollar waste as high as 71% and many regional grocers with Discounts and Rewards programs struggling, a lack of promotional relevance is no small problem.

Drivers of Discounts, Rewards and Information

After getting the core components of a Discounts and Rewards program right, supporting it with an app that makes Discounts and Rewards easier to access will help retailers be in the First Quartile for the pillar.

Secondary Drivers of Discounts, Rewards, Info Pillar Ranking

This store's phone app makes shopping easier

Primary Drivers of Discounts, Rewards, Info Pillar Ranking

Has discounts/coupons on items I buy regularly

Discounts/coupons here are easy to use

The retailer rewards me for shopping with them


28 Motley Fool, December 2018. Barron’s, August 2018. Business Insider, March 2018.


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Winners in Discounts, Rewards and Information



Discounts, Rewards, and Information: The Path to Success or A Way to Dig the Hole Deeper?Does this mean that having a rewards program and investing heavily in promotions is unnecessary to improve Customer preference and financials?

The answer is: it depends. Excellence in Discounts and Rewards can be the differentiator that allows traditional grocers to not only stay alive but thrive in the face of non-traditional, First Quartile competition; or traditional grocers can bury themselves even deeper through continued investment in Discounts and Rewards.

So, what is the difference between retailers who use Discounts and Rewards to thrive versus those who are using it to dig themselves deeper? The answer lies in the strength of its Value core and the relevance of those Discounts and Rewards.

Those Thriving financially with Discounts and Rewards clearly offer greater relevance of discounts and information than those who simply offer a higher volume of discounts and rewards. In addition, using promotions too much can train shoppers to purchase only when an item is on sale, which can have negative impacts on margin.

7 Retailers Thriving Financially

7 Retailers Lagging Financially

Digital Quartile All in the First All in the First

Overall RPI Quartile All in the Second All in the Fourth

5 Years Sales Growth 4.1% 0.02%

Sales per Square Foot $660 0.5%

The Best Discount, Rewards Retailers in the U.S.:The Path to Success or The Way to Dig the Hole Deeper?

Discounts/Rewards Retailers and Keys to SuccessThriving Financially Lagging Financially



Also (and more importantly) Thrivers have a solid Value Core, which amplifies the success of their Discounts and Rewards program. Thrivers have solidly average performance in areas of Quality and Price, focusing on strengthening the core the most in Private Brand and assortment relevance. Additionally, they are satisfied delivering average store look-and-feel, Customer service and RTE offerings.

In fact, even compared to First Quartile retailers of the RPI Overall, who tend to be non-traditional banners without Discounts and Rewards programs, Thriving Discounts and Rewards retailers have better assortment relevance on average. This means that a Discounts and Rewards program, if done correctly, can be one element that separates retailers from the rest of the pack chasing non-traditional banners.

Most estimates conclude that between 40% and 70% of promotional dollars are wasted every year, totalling hundreds of millions of dollars of ineffective spending. This is often because many of the Lagging regional grocers continue to throw money at irrelevant promotions. A powerful combination of decent prices, relevant assortment and relevant Discounts and Rewards can set traditional, regional retailers apart from other traditional retailers struggling to stay alive.

Discounts, Rewards Retails and Keys to SuccessValue Core: Prices and Quality

Thriving Financially Lagging Financially

Thriving Discounts and Rewards Retailers versus First Quartile RetailersValue Core: Prices and Quality

Thriving Financially First Quartile




Deep Dive in ConvenienceThe Importance of Convenience

“Convenience is King.” It’s an often-repeated headline. It also happens to be wrong. Between grocery stores, mass merchants, discounters, convenience stores, eCommerce, fast food, and fast casual, easy to reach food destinations are everywhere. Customers have demonstrated that they are willing to shop multiple channels to get all the products they want to get the prices they want. Those retailers in the First Quartile of the RPI Overall often don’t have the most locations in a given city or region--and some don’t have a wide range of products in every category.Rather, they have the right product for the right shopper at the right price.

Convenience can help keep a retailer afloat. With enough locations and products, Customers can’t help but be captive to visiting those stores for at least some products, especially if they have built up a habit of doing so. However, those retailers will always be vulnerable to retailers with superior Value who have the ability to move in and grab a shoppers’ attention.

Drivers of Convenience

Secondary Drivers of Convenience


Primary Drivers of Convenience

Has convenient locations

I can do all of my shopping at this one store

29 Food Marketing Institute Grocery Trends 2018.


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Deep Dive in SpeedThe Importance of Speed

Retailers have continued, over many years, to experiment with format reinvention to keep up with shifts to urban centers, preference for the conveniences offered by new digital shopping habits, pressures to lower costs, and the overarching goal of improving Customer experience. From Amazon Go’s cashier-less stores and resulting interest in just walk-out technology on the part of competitors, to many retailers experimenting with smaller formats or other ways to speed up checkout, the innovations reflect shoppers’ need for speed and desire for time savings that frictionless shopping provides.

However, providing superior Speed is not for every retailer. Consider First Quartile retailers Walmart, Costco, Market Basket, WinCo and H-E-B, who are among the weakest in the study at Speed and prove that Speed can help, but is not necessary for success. These retailers have sacrificed Speed to bring shoppers an excellent Value through a combination of a wide range of products and/or excellent prices.

Drivers of Speed

Secondary Drivers of Speed

Staff make me feel valued

Primary Drivers of Speed

It's easy to get in and out quickly

Check out is fast and easy

29 Food Marketing Institute Grocery Trends 2018.


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Typically, less square footage – or not having any square footage at all in the case of Amazon and Peapod – is associated with making it in the First Quartile for Speed. Retailers in this quartile have average square footage that is 42% less than retailers in the other quartiles.



Many of the largest regional, traditional grocery chains in the U.S. occupy the Third and Fourth Quartiles. These retailers often not only face stiff challenges from First Quartile retailers with non-traditional grocery formats – like Walmart, Costco, and Amazon – but they are also battling amongst themselves for survival, facing competition from at least one other regional, traditional grocer.

So, how can retailers in this position compete for Customer preference? An examination of dunnhumby’s RPI data offers some key building blocks for a Customer Strategy.

Let’s examine a case study, using actual data from a retailer in this situation, who we will name as Retailer X. Retailer X operates in the Northeast and has been a mainstay for decades, serving generations of Customers in its neighborhoods with a dense regional footprint of ~45,000 square foot traditional grocery stores. It is a typical Third Quartile retailer, with slightly above average Quality and clearly below average Price Perception.

Its four largest competitors, based on % of its own Customers who cross-shop these other stores, are: Walmart, Costco, Amazon and regional grocer Stop & Shop.

Case Study for a Traditional Retailer: Its position, and how it could better compete

Grocery Retail Landscape 2018: Value Perception

Average First Quartile Retailer

Average Second Quartile Retailer

Average Third Quartile Retailer

Average Fourth Quartile Retailer

Retailer X

Better

Quality

Worse BetterPrice


The Diagnosis:

• Number of trips per month is about average, but these are smaller basket size trips, leaving them with a lower Share of Wallet than some key competitors.

• Trips over index in non-staple bakery, deli categories, in addition to staple dairy items.

• Losing on non-perishable food and cleaning/paper product trips.

• Fresh produce presents a lost opportunity against Walmart, Costco, and Amazon, considering that Retailer X’s quality is higher, but it doesn’t do as good of a job capturing produce trips as it potentially could.

• Prices are a weakness to all key competitors except Stop & Shop.

• Quality of store experience is solid, particularly in staff and store cleanliness.

• However, product variety and Private Brand offer areas to improve in order to compete better with key competition, including product variety relevance.

• Retailer X has one of the more active discounts, rewards program in the study. However, this program is not contributing to financial success as much as it could be. Average price perception and exceptional assortment relevance need to be in place in order to get the most out of a discounts, rewards program. Retailer X does not have either of these.

• Will frequently go head-to-head with Amazon for the upper income, younger families.

The above just represents diagnosis of the Value Core (Quality and Price) within the context of categories, trip types, and demographics. A more extensive analysis of the supporting pillars will add additional power to the diagnosis, adding an understanding of the retailer’s Digital, Operations, Discounts/Rewards/Info, Convenience, and Speed.

However, based simply on the above diagnosis, implications for Customer Strategy, in order to address struggling basket size and boost share of grocery wallet, might be:

• Maintain performance on store experience(which is solid) while instead focusing investment increases on assortment relevance.

• Close price perception gap, while maintaining Quality edge, by improving Private Brand.

• On the back of increases in assortment relevance and increases in price perception, focus on driving discounts, rewards, and promo relevance by tying these offers only to the most relevant products. This will increase efficiency of marketing spend.

• Identify ways (e.g. marketing, merchandising, etc.) to better leverage advantage in Fresh category quality in order to drive more Fresh category trips.

Do you work for a retailer in our study? dunnhumby can provide an even more detailed case study for you. Please contact us for details.


Conc

lusi

on


Although this study presents a simple rank order of how Customers prioritize needs, the answer to “how should I compete?” is not simple. No single scholarly article or industry deep dive will have the answer. The answer to that question is different for every retailer, and answering that question starts with understanding their target Customers, competitive strengths and weaknesses, market trends and how retailers need to tailor their specific assets and competencies to uniquely address their target market. And, once this strategic understanding is achieved and a Customer strategy is put in motion, maintaining it requires a system of governance focused on continuous monitoring of the right data, accountability for shortfalls to goals, and the ability to nimbly tweak operations to address shortfalls.

“I do understand our Customers, and we have a process for figuring out a business strategy,” a retailer may say. That may be true, but what distinguishes First Quartile retailers is not merely having a process, but having a superior process for diagnosing key issues and making trade-offs to execute on those key issues. Improving this process will only increase the odds that retailers survive in an intensely competitive market, and persistence with this process over time will lead to winning Customer preference and financial success.

TBD

I do understand our Customers, and we have a process for figuring out a business strategy.


Key Takeaways• Value Perception must be diagnosed, and shortcomings must be improved in areas

of Price or Quality before retailers consider investing in other areas. If you don’t, your investments in other areas are not getting as much ROI as they could.

• Make one of those thing you’re excellent at Private Brand. Whether you’re a non-traditional banner in the First Quartile, a retailer investing in Digital, or a regional, traditional retailer with an active discounts, and rewards program, Private Brand is a common theme to success.

• Assess your Customer target, market position and assets and competencies before you decide if any of these key takeaways apply to you.

• Make trade-offs to be excellent at some things, even if it means being bad at some things. Non-traditional formats – such as mass merchandisers, wholesalers, specialty retailers and digital pure-players – do this while traditional, regional grocery banners tend not to. As a result, non-traditional formats win Customer preference.

• The call to action for any retailer investing in Digital is to ensure that they have a well-priced offering of digitally in-demand, center store products, as well as the scale within its footprint to reach a wide audience. Otherwise, Digital as an amplifier of financial success is in doubt.

• Solve assortment relevance and price perception issues before investing any more in discounts and rewards. Using Customer data science can determine the right way to promote products for profit, and better target Customers with relevant offers to drive ROI.


The list of banners evaluated, in alphabetical order, include:

Acme

Albertsons

Aldi

Amazon

Big Y Foods

Bi-Lo

BJs Wholesale

Brookshires

Costco

Food City

Food Lion

Food4Less/Foods Co.

Fred Meyer

Frys Food Stores

Giant Eagle

Giant Foods

Hannaford

Harris Teeter

H-E-B

Hy-Vee

Ingles Markets

Jewel-Osco

King Soopers

Kroger

Lidl

Lowes Foods

Market Basket

Meijer

Peapod

Price Chopper

Publix

Raley’s

Ralphs

Safeway

Sam’s Club

Save Mart

Schnucks

Shaws/Star Market

ShopRite

Smart & Final

Smiths

Sprouts Farmers Market

Stater Bros

Stop & Shop

Supervalu

Target

The Fresh Market

Tops

Trader Joes

Vons

Walmart

Walmart Neighborhood

Wegmans

Weis Markets

WinCo

Winn-Dixie


Top Quartile Retailers From dunnhumby’s 2017 Retail Preference Index Report

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THE WORLD’S FIRST CUSTOMER DATA SCIENCE PLATFORMdunnhumby is the global leader in Customer Data Science, empowering businesses everywhere to compete and thrive in the modern data-driven economy. We always put the Customer First. Our mission: to enable businesses to grow and reimagine

themselves by becoming advocates and champions for their Customers.

With deep heritage and expertise in retail — one of the world’s most competitive markets, with a deluge of multi-dimensional data — dunnhumby today enables businesses all over the world, across industries, to be Customer First.

The dunnhumby Customer Science Platform is our unique mix of technology, software and consulting enabling businesses to increase revenue and profits by delivering exceptional experiences for their Customers – in-store, offline and online. dunnhumby

employs over 2,000 experts in offices throughout Europe, Asia, Africa, and the Americas working for transformative, iconic brands such as Tesco, Coca-Cola, Meijer, Procter & Gamble, Raley’s, L’Oreal and Monoprix.

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