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    Expert Column: The Perception Gap Between Grocers and Shoppers

    Catering to shopper needs will drive competitive advantage, profitable growth

    By Graeme McVie, Precima

    Customer-centric strategies produce results. When grocers make the investment to understand who their shoppers are and use that knowledge to make the shopping experience truly focused on customer needs, they earn their loyalty and encourage customers to consolidate their spend, resulting in increased frequency of shopper visits and basket size. We’ve found that when a retailer uses a customer-centric strategy, they could see a net incremental sales increase of 1-4 percent and an average increase of 4-7 percent in gross profits. For a $2 billion retailer, this could potentially equate to an additional $80 million in sales per year and an additional $30 million in gross profits per year.

    Retailers and manufacturers understand that building pricing, promotion, assortment and marketing decisions around customer needs is an essential approach to success. In fact, retailers and manufacturers cite a customer-centric strategy as the most important factor for success — more than twice as important as even high-quality products, low prices or a great in-store experience, according to a 2014 survey of U.S. food and drug retailers and CPG manufacturers conducted by LoyaltyOne.

    The troubling news is that we’re seeing a perception gap between how good a job retailers think they’re doing and how customers really see their relationships with retailers. Top retailers believe they’re embracing shopper insights, but something’s not resonating.

    Let’s look at the details.

    More than nine in 10 top U.S. retailers say they consistently leverage customer insights to develop strategies and plans across the organization. They say they regularly track customer metrics, use customer insights for digital, social and mobile plans, heavily invest in staffing and technical resources, and educate store personnel on using customer insights in their daily jobs.

    These retailers also say they consistently draw from customer insights to improve the in-store experience, to deliver personalized marketing communications and to collaborate with manufacturers.

    For the top U.S. retailers, that’s doing a lot of things right.

    However, we also surveyed U.S. shoppers who say they aren’t feeling personalization or relevance in their shopping experiences overall. Instead, they’re reporting luke-warm attention:

    • 64 percent say the offers (e.g. coupons) they get are the same as everyone else’s
    • 50 percent say companies do not consistently send personalized and relevant marketing communications
    • 40 percent say companies do not know how they prefer to receive promotional offers (e.g. coupons by mail)
    • 35 percent say they do not receive promotional offers for products that they want

    Our research shows that while retailers say they’re delivering, shoppers just aren’t buying it.

    By Graeme McVie, Precima
    • About Graeme McVie As VP of Business Development for Precima, a leading retail analytics solution owned by LoyaltyOne, Graeme McVie leads the customer analytics and loyalty services sales efforts across North America.

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