dhVoice
A Roundtable Discussion with dunnhumby Thought Leaders
With regard to eCommerce, what should grocers be thinking about in mid-2022? We’ve gathered a panel of experts at dunnhumby to break it down for us. What should grocery retailers prioritize? What should they understand about the competition? How can grocers level the playing field by adopting the Customer data science that can support eCommerce growth?
Our panel
Tracey Lewis Media & Customer Engagement
David Brandt Global Head of Shopper Research
Emily Turner Media & Customer Engagement
Dave Clements Global Head of Retail
Feroud Seeparsand Consumer Psychology
David Ciancio Global Head of Grocery
Erich Kahner Competitive Strategy
Natalia Rojas Strategy & Insights
Jorge Romero Category & Store Solutions
Faye Kadhim Shopper Insights Manager
Executive Summary
- As part of the inaugural dunnhumby Quarterly report, dunnhumby experts in Media, Shopper Research, Category Solutions, Pricing, Loyalty, Competitive Strategy, and Consumer Psychology – gathered together to discuss our mutual passion Customers, and to respond to some of the most universal questions we get from retailers.
- What is eCommerce worth today? The ~ $100B grocery eCommerce channel is not as profitable as most retailers would like it to be, at least not in the traditional channel lens. Instead, we look at the long-term Customer profitability perspective AND the various revenue streams that can help tell a sunnier story.
- Why does winning online matter? The cost of a poor online experience is losing both online and offline purchases of omnichannel Customers to another retailer or 3rd party provider. In more mature markets, 1/6 of all grocery dollars go to pure plays. The positive news is that winning the most loyal omnichannel Customer can help offset declining margins that have best described eCommerce until now.
- And who is the omnichannel shopper? This demographic is made up of younger, growing families strapped for time that “care for their creatures and drink their stress away” (more on that later). Price perception is less of a driver of performance online as this Customer is willing to sacrifice the in-store sensorial experience and price (!) for convenience.
- How can dunnhumby help retailers win the omnichannel shopper?
- (product and category management) Align the mix to the less price-sensitive online mission (i.e. baby, organic, pet, alcohol) and adapt category taxonomy to improve the experience for our omnichannel shopper.
- (connected multichannel) Merge clickstream and offline data to help simplify the omnichannel journey, grow the omnichannel Customer’s share of wallet and drive incremental sales.
- (fulfillment and operations) Make a strategic choice on how to use 3rd parties from a tactical point of view for fulfillment purposes, which is where their strength lies. Whether you use a 3rd party or not, make sure your retailer brand is the face of the experience, and do not deliver late and miss items or you risk losing the omnichannel Customer for good.
- (monetization) Drive for Customer profitability, not Channel profitability. Customers don’t see channels as a separate experience, but rather as a whole, and so should we. The best way to increase profitability is to diversify revenue streams via supplier insight and media monetization.
- (Customer strategy and lifecycle) Own the Customer relationship and touchpoints to retain omnichannel Customers, understand the attributes they value, namely the ease and reliability of the shopping experience, have a clear competitive advantage and complementary partnerships, and understand the online journey pain points with the primary objective of providing frictionless convenience.
Erich Kahner
Competitive Strategy
Hello everyone! We’re all here today to discuss some burning questions retailers have about the present and future of grocery eCommerce. You’re all here to represent the voice of dunnhumby and our army of thought leaders. Let’s get started.
While grocery eCommerce has had superior growth rates compared to brick and mortar stores in recent years, 9 out of every 10 consumer dollars are still spent in brick and mortar, and ~50% of the U.S. population still doesn’t shop online and doesn’t appear to have any plans to start. And for many retailers, eCommerce revenue isn’t as profitable as brick and mortar revenue.
My devil’s advocate question is, given the shaky case financially for investing in grocery eCommerce and omnichannel grocery capabilities, why should grocery retailers prioritize it?