What Do Customers Want?

Dunnhumby’s methodology for ranking grocers involves creating a composite score based on customer perception and financial performance. This enables the grocery industry — which perennially struggles with razor-thin margins — to understand what’s working and what isn’t across the U.S. and across different store categories (e.g., supermarkets, hypermarkets, discounters, specialty stores, convenience stores). The RPI highlights the value of first-party data, which can be anonymized to enhance retailer performance in areas like category management, retail media, and price and promotions.

Five Things That American Shoppers Care About

The report shows that grocers meeting customers’ specific expectations generally fare better financially. Surveying more than 11,000 U.S. shoppers across 72 American grocery stores, this year’s survey identified five things that American shoppers care about. In order of importance, those things — the “drivers” of success, in dunnhumby parlance — are price, promotions, and rewards; quality; digital; operations; and speed and convenience.

A Unique Value Proposition

So, what’s the key to H-E-B’s success? Not just low prices. Each of the top five grocers (H-E-B, Market Basket, Costco, WinCo, and Aldi) differentiate on price. The magic of H-E-B is a unique value proposition based on other things that matter to customers. The report highlights quotes from anonymous shoppers, rich with the detail on what sets that the grocer apart. Cleanliness, helpful staff, local produce, imaginative freebies (like fresh tortillas, catering to the Tex Mex population they serve). In fact, being a regional brand has its benefits; it enables the brand to trade on its deep knowledge of regional culture and preferences. Unsurprisingly, local brands did well this year. Of the top five brands in this year’s RPI, three are regional.

For Love and Money

Perhaps they will believe him. After all, everyone loves a winner, and H-E-B’s place in dunnhumby lore has created publicity worthy of a cult—not a store.

Conclusion

Moral of the story: it truly pays to know your customer, and to look at the broader economic picture, which tells a related story about the long-term trend of what dunnhumby calls “fiscal conservatism” where all shoppers, affluent and not, are looking for the right price.

But just as important is paying attention to the other attributes that matter to your shoppers, which a grocer can uncover by understanding what their customers think and feel. It’s the promise of customer data science, which provides both the mindset and technology that allows a grocer to compete, even if they’re not a household name.

FAQs

Q: What is the Retailer Preference Index (RPI)?

A: The RPI is a report by dunnhumby that ranks grocers based on customer perception and financial performance.

Q: What are the top five grocers in the RPI?

A: The top five grocers in the RPI are H-E-B, Market Basket, Costco, WinCo, and Aldi.

Q: What is the key to H-E-B’s success?

A: The key to H-E-B’s success is its unique value proposition, which is based on other things that matter to customers, such as cleanliness, helpful staff, local produce, and imaginative freebies.

Q: What is the importance of first-party data in the grocery industry?

A: First-party data is essential in the grocery industry, as it allows retailers to understand what their customers think and feel, and to enhance their performance in areas like category management, retail media, and price and promotions.