CHICAGO — A “special edition” of the dunnhumby Retailer Preference Index (RPI) places Amazon, H-E-B and Kroger atop the latest rankings of grocery retailers in terms of their abilities to personalize shopping experience to best serve shoppers.
The inaugural RPI for Leadership in Personalization finds that Amazon stands apart from all other retailers, dunnhumby says in releasing the index.
“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,” says Matt O’Grady, president of dunnhumby for 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 seven retailers with the next highest overall customer preference index scores are, in descending order, Giant Eagle, King Soopers, Meijer, The Giant Co., Target, Fry’s and Smith’s.
“The Personalization RPI 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,” says O’Grady.
The dunnhumby RPI is the only approach to ranking grocers that combines financial results with customer perception, the company says. The new PRPI includes 65 of the largest grocery retailers in the industry that sell in the everyday food and nonfood household categories.
For the Personalization RPI, 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 that rank higher are those that drive a higher share of visits and bigger basket sizes.
Dunnhumby says its Personalization RPI 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, frictionless experience and localized assortment.
Among other findings:
• Amazon, H-E-B, Target and Shoprite are the only retailers ranked in the top quartile in dunnhumby’s annual U.S. Grocery RPI that also appear in the top quartile in the PRPI. Perennial top-quartile performers Costco and Aldi are absent from the PRPI, as are fast-growing grocery chains like Lidl and dollar stores looking to drive scale via geographic expansion and cost-cutting rather than through personalization. If their ability to expand into new markets diminishes, these retailers will need to look to personalization to drive growth with existing customers.
• Retailers in the top quartile outperform on benefits, costs or both. For top quartile grocery retailers, this translates to a 14% increase in shoppers with a strong emotional connection, a 41% increase in share of wallet, a 34% increase in per-person online visits each month, and a 131% increase in traffic share within the grocer’s footprint.