Top Insights from the inaugural dunnhumby Retailer Preference Index: Grocery Edition
At the start of 2018, dunnhumby published its inaugural Retailer Preference Index, focused on the U.S. Grocery channel. Our goal: to understand what drives consumer preference for U.S. grocery banners. Those at the top of the list best delivered on the areas most important to their particular shoppers, resulting in a higher preference score and overall higher performance – both financially and emotionally.
As we get ready to head into 2019, here are a few of the key takeaways for retailers to consider:
- By far, the core drivers of preference are Price and Quality. They are so much more important than the other drivers that a very poor score on either measure can significantly impact preference and their corresponding market performance. Retailers with a weak value core should focus on shoring up that weakness before turning attention to other drivers such as Convenience, Rewards, or Speed.
- The second quartile include some of the higher performing banners with the longest histories, like King Soopers and Harris Teeter. This quartile has the highest Top of Mind recall and the second highest financial performance. This group does not perform as well as the top quartile because their Price and Quality scores are not as strong, but this second group differentiates itself by exceling at secondary preference drivers, such as Promotions, Rewards, and Information.
- Many undifferentiated mainstream banners, like Winn-Dixie and ShopKo are delivering minimal value to their shoppers. Even though many have been shopped for a long period of time, they have the weakest emotional connection. They must focus on improving value perceptions and reconnect with their shoppers, or risk losing those customers in an increasingly competitive market.
The list of grocery banners, in alphabetical order, includes:
Big Y Foods
Brookshire Grocery Company
Fry’s Food & Drug
Shaw’s / Star Market
Smart & Final
Smith’s Food & Drug
Sprouts Farmers Market
Stop & Shop
Tops Friendly Markets