Thursday, February 22, 2024

Retailers struggle to monetise data and drive experience

Eighty-five per cent of global grocery retailers lack the capabilities, technology, people and processes to use insights to monetise their data and drive customer experience, says a new study commissioned by dunnhumby.

Despite the apparent barriers, the Forrester Consulting-conducted study, The Future of Retail Revenues Must Be Data Led, finds that the majority (83 per cent) of Australian grocery retailers surveyed list growing new revenue streams as the top priority in 2020.

They plan to do this by improving their use of data insights to develop customer strategies (84 per cent) and to make business decisions (82 per cent).

“Many businesses in the global grocery market are in a fight for survival with heightened competition from discounters, pure plays and other non-traditional competitors, whilst the cost of doing business is increasing, further squeezing razor-thin margins,” dunnhumby Global Retail Director David Clements said.

“We commissioned this study to better understand why so many retailers aren’t taking advantage of new revenue streams, while improving the shopping experience for their customers.

“We believe the study findings highlight the growing importance of the role of customer data in attaining sustainable growth.”

Key findings

  • Just 15 per cent of global grocery retailers surveyed are “leaders”, differentiated by data-led customer strategies for growth and improved supplier relationships, while the majority are lagging behind.
  • Almost all global retailers (96 per cent) surveyed are experiencing significant challenges when trying to use data to develop customer strategies to drive growth. Meanwhile, all Australian retailers surveyed are struggling with this.
  • “Most” grocers surveyed are already capitalising on the revenue potential of customer data and in-store/online media channels.
  • The “majority” of grocers surveyed leave money on the table by not monetising media assets.
  • Ninety-six per cent of grocers surveyed who offer media opportunities for CPG suppliers on their apps saw an increase in revenue over the last 12 months.

Looking to the future

Mr Clements says grocery retailers must activate the data they already have to improve the customer experience and to create new revenue streams that can support their businesses into the future.

“There is a significant amount of untapped revenue in grocery,” he said.

“Those that unlock the potential of their data and media assets, and improved supplier collaboration, will thrive.

“Retailers that fail to adapt will fall behind in the increasingly competitive marketplace.”

Download the full study here.

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