Throughout 2017, we’ve been covering the data revolution in the grocery sector, as grocers around the world respond to the rise of Amazon and changing shopper habits by beginning the long journey to shopper personalization through investment in data analytics to transform the grocery experience. Now, as LoyaltyOne’s Bryan Pearson notes in Forbes, the most reluctant player in shopper personalization has joined the revolution—Walmart, which is embarking on its own journey of transformation.
By Rick Ferguson
As Pearson notes, Walmart itself, long a naysayer and outlier on the notion of building relationships with individual shoppers, has acknowledged that it must evolve. Money quote from Pearson’s Forbes article:
“The world’s largest brick-and-mortar merchant has acknowledged it is lagging in the quest to personalize through the use of shopper data. Now, perhaps because of Amazon’s purchase of Whole Foods, which could yield unprecedented in-store and online data models, Walmart is embarking on a ‘multiyear journey’ to get its data in good enough shape to produce relevant personalized experiences. ‘From 1 to 10 in our use of data, I would say we’re probably about a 2,’ Doug McMillon, president and CEO of Walmart, recently told attendees at its annual investor conference. ‘We use data to improve in-stock and replenish. We don’t use data to personalize.’”
That’s a stark admission of failure on the part of Walmart’s chief executive. Or perhaps it’s not an admission of failure, but rather an admission of the need to evolve beyond the Everyday Low Price (EDLP) retail model that Walmart pioneered and dominated over the previous thirty years or so. Pearson notes that Walmart has demonstrated commitment to this evolution in its “One Version of Truth” initiative, in which it has partnered with Nielsen to, in part, “provide supply chain partners a consistent view of the market so they can leap on opportunities that cut costs and also improve the shopper experience.”
As Pearson also notes, US rivals Kroger and Albertson’s are likewise investing heavily in data initiatives, with the former a longstanding pioneer in data-based offer personalization. And as we have noted previously, many industry observers predict that grocers of tomorrow will more resemble Silicon Valley startups than traditional grocers. Pearson further outlines three ways in which grocers will most effectively evolve their data use:
- The evolution toward fresh: With many center-of-store commodity and pre-packaged goods purchases shifting online, retailers will us data to evolve the aisles away from the center and more toward fresh and locally-sourced alternatives.
- The evolution toward omnichannel: To maintain share of those commodity and pre-packaged good purchases, retailers will use data to drive purchases of goods that are auto-replenished, ordered in-store and shipped home, or ordered in-store and picked up on the way out.
- The evolution toward personalization: Retailers will follow the lead of Kroger and other early adopters in using data to hyper-personalize offers and communication.
These are all noble and worthy goals, and it’s interesting to note that even Walmart realizes that continued success in grocery retail will require the company to move beyond simple price competition. The grocery revolution is ongoing, and we’ll continue to excitedly watch the space in 2018.
Rick Ferguson is Editor in Chief of the Wise Marketer Group and a Certified Loyalty Marketing Professional (CLMP).