Progressive Grocer

DEC 2016

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88 | Progressive Grocer | Ahead of What's Next | December 2016 Technology Big Data Mining for Insights in Loyalty Data Retailers with mature loyalty programs have household- level shopper data showing basket activity over time that experts say can be used to identify product trends, segment shoppers, define product affinities, and more. Hari Shetty, global head — retail vertical at Bangalore, India-based consultancy Wipro Ltd., agrees, but only if grocers have the capability to analyze the data in a mature loyalty program. "The more grocers and other retailers know about their customers — the way they shop and when, their preferred methods of communication, their buying patterns and habits — the better they can tailor products and services, which improves the overall customer experience," asserts Shetty. As evidence, he cites key findings from a study of retailers by the London-based Economist Intelligence Unit: 64 percent believe data increases brand loyalty 52 percent say Big Data enabled them to expand their sales by offering the next logical item 64 percent of retailers have made financial gains in customer relationship management through Big Data 66 percent significantly increased the amount of information held about customers last year "It's obvious that the more you know about your customer, the more effectively and efficiently you can deliver on their needs," notes Shetty, "and loyalty programs are one way to do just that." Elliott gives an example regarding assortments: Big Data enables grocers to optimize which prod- ucts shoppers see in the store, how many facings are needed, and the total linear feet by category, given the shopper segments in the store. "With Big Data and advanced analytics," he explains, "we better understand which store clusters need to be sharper on price and which can save money by not investing in price quite as deeply. With a better understanding of willingness to pay by customer segment, by key value item and by store cluster, retailers are better able to make investments in loyalty that pay off." Optimizing Promotion Pricing "Making correlations between verified price-to- consumer information and a retailer's own POS data allows individual stores to optimize pricing by location," points out Guy Amisano, CEO and founder of Salient Management Co., a Horse- heads, N.Y.-based software provider. Retailers can do this in three ways: Finding the best price point for a specific product or an entire brand Effectively offering promotion Tracking product flows and understanding profitability "Combining the mass amounts of data already at a retailer's fingertips — from invoice info to scan records to vendor rebates — allows them to gain a clear picture of profitability by day, as well as digging deeper into performance of each vendor, department or individual store as a whole," he says. Personalizing Promotions According to Elliott, the consultant, there are two ways that Big Data enables companies to motivate their customers. e first is localization, which allows companies to tailor which products are available in which stores and which promotions best appeal to the local shopper market. "e second approach is personalization, which is a step beyond localization," he explains. "With this, companies move from a segment of many to a seg- ment of one. is can be reflected in simple targeted pricing promotions as well as 'awareness' promotions targeted to shopper interests without requiring a price promotion to get their attention." He gives the real-time example of a store send- ing a text to alert a shopper that an item they have purchased a lot previously is currently on clearance in a nearby store, or to share a recipe near dinnertime to spur an incremental trip for the ingredients. Summing up the benefits, Alberino, of Grey Jean Technologies, stresses that the biggest piece of knowledge grocers can take away from the data they've accumulated is that perceived "volume" of data doesn't matter. "What you do with your data is much more im- portant than how much data you have," he says. "In order to provide the biggest value for your customers — and, consequently, grocers themselves — grocers need to make those data insights actionable. e key to successful Big Data use is the ability to identify exactly which customer data points will help them understand individual buyers, what motivates them and what drives them to purchase — and understand that this data can and will change from purchase to purchase." PG By effectively leveraging shopper data, grocers can customize marketing activities, pricing, product assortments and customer service in order to build consumer loyalty and increase revenue." —Eileen Kolev, MicroStrategy

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