A special edition of dunnhumby’s Retailer Preference Index, designed to determine which retailers in the $1 trillion U.S. grocery market best personalize the customer shopping experience, finds that Amazon leads the way, followed by H-E-B in second and then Kroger.
According to the inaugural report for “Leadership in Personalization,” these three retailers are at the top because they deliver targeted savings, localized assortment and frictionless shopping experience best.
The seven retailers with the next highest overall customer preference index scores are Giant Eagle, King Soopers, Meijer, The Giant Co., Target, Fry’s and Smith’s. Seventy percent of those in the top-quartile of the Personalization Retailer Preference Index ranking also are in the top quartile for Targeted Savings, the most important personalization driver.
“With the long-term trend of shoppers across all income brackets demanding lower prices, personalization is an opportunity for grocers to better retain and acquire customers,” said Matt O’Grady, dunnhumby’s president of the Americas.
“The goal of this report is to help retailers improve personalization as a whole – the way customers define it. And because customers define personalization as targeted savings, local assortment and a frictionless shopping experience, understanding their preferences is key.
“The Personalization Retailer Preference Index provides a framework not only for grocery retailers looking to lead the market in personalization, but also for those who are in the earlier phases of their personalization journey who are trying to understand where to focus their resources.”
The dunnhumby RPI is the only approach to ranking grocers that combines financial results with customer perception. It includes 65 of the largest grocery retailers in the industry that sell everyday food and non-food household items.
For the Personalization Retailer Preference Index, the financial data and the customer perception data is sourced from dunnhumby’s survey of 10,000 American grocery shoppers.
Dunnhumby analysts cross-validate the model with financial data from Edge by Ascential, foot traffic data from Placer.ai and web traffic data from Similarweb to ensure that grocery retailers who rank higher in its approach are driving a higher share of visits and bigger basket sizes.
The Personalization Retailer Preference Index model also identifies which dimensions of the personalization proposition matter the most for driving financial and emotional performance by grouping more than 30 personalization levers into three main personalization preference drivers – targeted savings, localized assortment and frictionless experience.
Key findings from the study:
- Only Amazon, H-E-B, Target and Shoprite, which ranked in the top quartile in dunnhumby’s annual U.S. Grocery RPI published in January, were also ranked in the top quartile in the Personalization Retailer Preference Index.
- Retailers in the top quartile outperform the rest of the retailers on benefits, costs or both.
- Smith’s, Winn-Dixie, Kroger, Fry’s and Giant Eagle offer shoppers the best targeted savings.
- H-E-B, Big Y, Wegmans, Food City and Schnucks feature the best localized assortment, the second most important driver of personalization.
- Amazon, Target, H-E-B, CVS and Walgreens provide shoppers with the best frictionless experience, the third most important driver of personalization.
The full RPI report can be accessed here.
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