Study: 85% Of Grocery Retailers Lack Capabilities To Use Insights To Monetise Data & Drive Customer Experience

In this rear view, an unrecognizable woman stands with a shopping cart in front of a shelf full of food in the bread aisle of a grocery store.

dunnhumby has released The Future of Retail Revenues Must Be Data Led, a commissioned study conducted by Forrester Consulting, that found 85 per cent of global grocery retailers lack the technology, people and processes to use insights to monetise their data and drive customer experience in the $5.9 trillion worldwide grocery retail market.

Despite the apparent barriers, the majority (83 per cent) of Australian grocery retailers list growing new revenue streams as the top priority in 2020 and plan to do so by improving their use of data insights to develop customer strategies (84 per cent) and to make business decisions (82 per cent).

“Many businesses in the global grocery market are in a fight for survival with heightened competition from discounters, pure plays and other non-traditional competitors, whilst the cost of doing business is increasing, further squeezing razor-thin margins,” said David Clements, global retail director at dunnhumby.

“We commissioned this study to better understand why so many retailers aren’t taking advantage of new revenue streams, while improving the shopping experience for their customers. We believe the study findings highlight the growing importance of the role of customer data in attaining sustainable growth.”

According to Forrester’s 2018 report How Customer Experience Drives Business Growth, retailers globally are missing out on more than $200 million in revenue on average, through failing to improve their customer experience.

Key findings from the study include:

  • Just 15 per cent of global grocery retailers are Leaders, differentiated by data-led customer strategies for growth and improved supplier relationships, while the majority are lagging behind. Forrester uncovered three levels of maturity in grocery retail: leaders (15 per cent), intermediate (55 per cent) and novice (30 per cent). Leaders set themselves apart by showing improved CPG supplier collaboration with 1) sharing customer data insights, 2) providing insights and measurement solutions to support media planning, and 3) negotiating retail media placements as part of their annual trade agreements. Regionally, retailers in the United States, Brazil, Italy, United Kingdom, and Thailand standout as early leaders in developing customer strategies that drive revenue growth.
  • Almost all global retailers (96 per cent) are experiencing significant challenges when trying to use data to develop customer strategies to drive growth – meanwhile all Australian retailers (100 per cent) are struggling with this. Australian retailers are facing several obstacles including  cultural barriers to using data to drive decision making (51 per cent). The other main challenges are a lack of access to data (43 per cent), lack of data management tools or technology (40 per cent), and an inability to harmonise data and recommendations across channels, banners, brands, and locations (37 per cent).
  • Most grocers are already capitalising on the revenue potential of customer data and in-store/online media channels. Social media (57 per cent), mobile apps (54 per cent), customer data (54 per cent), promotions data (54 per cent), customer location (31 per cent) and web metric/clickstream data (34 per cent) are Australian grocers’ top sources of using customer data to capitalise on revenue potential.
  • Majority of grocers leave money on the table by not monetising media assets. Only 42 per cent of grocers are currently selling branding opportunities on their website and only 37 per cent offer media placements in-store and on their print media. Only 31 per cent of global grocers are selling branding opportunities on their mobile apps except for Brazil (49 per cent), China (47 per cent), and Spain (38 per cent) where apps are used more frequently.
  • 96 per cent of grocers who offer media opportunities for CPG suppliers on their apps saw an increase in revenue over the last 12 months, with 40 per cent seeing an increase of more than 10 per cent. In addition, 92 per cent of firms offering ads and branding opportunities on their websites saw an increase in revenue from this channel.

“Time is of the essence for grocery retailers to activate the data they already have to improve the customer experience and create new revenue streams that can support their businesses into the future,” said Clements.

“There is a significant amount of untapped revenue in grocery. Those that unlock the potential of their data and media assets, and improved supplier collaboration, will thrive. Retailers that fail to adapt will fall behind in the increasingly competitive marketplace.”

The full study can be downloaded here.



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