The changing landscape of customer data and technology are driving change throughout CPG Manufacturers’ and Retailers’ planning and promotional processes in the US, and across the world. I read a blog post on Supermarket News online regarding Analytics in customer centric category management.
U.S. Retailers’ best practices are migrating from traditional category performance approaches to shopper marketing-based methodologies. Core customer or “key customer” identification is the first and most essential step, it seems obvious to do this at times yet very few retailers, and almost NO manufacturers, have an actionable definition of their best customers / consumers.
The future does belong to those who do study their best customers. Consider Kroger’s joint venture with Dunn Humby, certainly the most advanced example of both core customer identification and application of loyalty card data among US supermarket retailers. Kroger is leading sales growth through this recession among major supermarkets. Comparable store (stores open longer than 12 months) sales were 5.8% higher during its fiscal first quarter 2008; management estimates 55% of that growth stemmed from higher traffic volume while the other 45% resulted from a larger average ticket. The rise in average tickets can be partially associated with the idea that consumers are less willing to go to restaurants in an effort to save cash. Kroger is also clearly well positioned to benefit from its advanced portfolio of high-quality Kroger brands. But David B. Dillon, Kroger chairman and chief executive officer, has repeatedly credited Kroger’s leveraging of the customer data gleaned from loyalty cards for the continuing market share growth of Kroger.
With or without loyalty card transactional data, the key to the future competitiveness of both retailers and manufacturers is customer and shopper knowledge.