How dunnhumby is helping retailers reduce the impact of inflation on their customers

Inflation is a topic that we’ve covered a number of times over the past couple of years. From our Customer First strategies for inflationary times through to shifting consumer behaviours and the impact on consumer packaged goods brands, there’s been no shortage of digital column inches dedicated to these difficult economic circumstances on our blog.

While we’ve looked at the causes and consequences of inflation in plenty of detail, though, and provided some key learnings and recommendations, we haven’t yet looked at how dunnhumby is actually supporting retailers through this period. To address that, I wanted to look at three of the biggest inflation-related issues that retailers are facing right now, and how some of the tools and products that we offer can help to tackle them.

In turn, then, let’s look at the interweaving issues of price, promotions, and private brand.

1. Delivering the right prices on your most important products demands expert optimisation

It should come as no surprise to learn that inflation is having a damaging impact on purchasing behaviours. In data from both the UK and Norway, we have seen that  customers aren’t just cutting back on discretionary and luxury items – they’re cutting back as a whole. Even in “core” categories like meat, fish, and fruit and veg, basket sizes are beginning to shrink.

Naturally, many retailers will find themselves feeling both morally and commercially obligated to help counter that trend – and the best way to do so is by optimising prices on products seen to be most popular amongst price sensitive customers and have the greatest impact on price perception. What are those products, though? And how can you balance customer needs with commercial responsibilities?

dunnhumby Price uses world-leading data science to help retailers answer both of those questions. Recommending optimal base prices for both shelves and customers alike, Price also helps retailers forecast the impact of those changes – ensuring that they can build trust with customers through stronger value perception. Learn more about dunnhumby Price here.

2. Driving value for price sensitive customers depends upon your ability to deliver campaigns effectively

Promotions have become increasingly important over the past 12 months, as demonstrated by our frequent Consumer Pulse studies. Of all the “value-seeking” strategies adopted by global grocery shoppers, promotions seem to hold the greatest appeal, with more than half (52%) citing offers and coupons as one of their main ways to save money.

Promotions can also have an outstated impact on the behaviours of certain customer groups. Data from one of our international clients suggests that price-sensitive and mid-market customers are particularly engaged by promotions, making them an excellent way to enhance value perception. Doing so, of course, means delivering more market-leading campaigns while minimising those that fail to move the needle.

dunnhumby’s Campaigns Health Check provides a 360° view on the sophistication of a retailer’s promotional strategy, evaluating maturity across six key criteria – Strategic Planning, Process & Governance, People & Integration, Customer Understanding & Data, Tools & Reporting, and Supplier Collaboration. In doing so, it helps build a tailored plan to leverage a retailer’s strengths and offer solutions that close any gaps that may exist. Promotional analytics will then review past promotions and refine future campaigns plans throughout the year, helping retailers maximise the value of their promotional investments.

3. Developing your private brand is a powerful way to support customers across the board

Like promotions, private label products have become a key indicator of value in the early 2020s. Our RPI Series – major research studies that look at issues of shopper preference around the world – shows that many customers now see private label as a defining factor when deciding where to buy their groceries. That is further reinforced by recent (and dramatic) sales growth in own brand goods[1].

For many retailers, the priority now is the successful evolution from private label to private brand. With the increased focus on own-brand lines comes an opportunity to build a genuine, retailer-exclusive brand; one that caters not just to price-conscious shoppers through highly commoditised products, but addresses a wider audience across a range of shopping missions.

Developing a private brand, of course, requires an ability to understand customer needs across multiple categories and at differing levels of price sensitivity. dunnhumby’s Customer Loyalty capabilities can help with the assessment and profiling required to achieve that level of understanding, while dh Assortment offers a way to identify specific private brand opportunities on a category-by-category basis.

Clearly, these are not the only ways in which retailers can address the impact of inflation. Relevant communications, assortment, and category optimisation all have key roles to play as well. More than anything, though, the priority should be on finding out what matters most to your own customers – and adapting your strategy in a way that best benefits them.

To find out more about how we can support you with your own inflation-related challenges, please get in touch.


[1] The facts and figures behind own-label's incredible growth – The Grocer, 14th May 2023

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