As consumers’ lives are becoming increasingly mobile, and the shopping journey becomes more complex and less linear, selecting the right media is essential for brand success. That’s why this month, for our 3 minute interview, we talked with Tanguy Pincemin, Managing Director for Media in Europe, to learn more about the trends that will dominate the retail media market, and how these will impact retailers and brands.

What are the greatest opportunities and challenges for retailers and brands in the EMEA region at the moment?

The challenges in retail are well known – balancing shrinking margins with increasing operating costs and a stream of new competition in terms of online players. For traditional grocery retailers in particular, the growth of discount chains such as Aldi and Lidl is a concern, with nearly a 13% market share vs the 4% they had a decade ago. By 2023 they are predicted to operate a greater floor space in Europe than all existing hypermarkets combined. And as their highly competitive prices continue to drive popularity with shoppers, traditional retailers will be forced to look closely at their own value propositions and seek to differentiate their offer to remain relevant.  

We’re also witnessing a growing number of alliances and partnerships between retailers, which allows greater buying power and lower costs.  Another key strategic move to optimise operations and secure market share.

Data is driving the greatest opportunity for brands, as it creates a new value chain built around the Customer. The proliferation of customer data, generated by numerous touchpoints both online and offline, and the increased technical capabilities to enable harnessing of these different data sources is opening up new ways for targeting consumers, based on granular behavioural insights. With data powering new business models which are built around personalization of the user experience, brands can create engagement on new levels.

With shopper behaviour changing, what factors do you think retailers and brands should prioritise?

Mobile is now the critical touchpoint for online purchasing and customer engagement for many consumers, particularly in European countries with high smartphone penetration such as the Nordics and with rapid mobile growth such as Spain. To ensure they provide a seamless experience for customers as they move between digital and physical shopping environments, retailers need to make sure this channel features prominently in their strategies.

Also, as the digital environment becomes increasingly busy, and brand visibility becomes more challenging, it’s even more important for brands to be harnessing media more effectively to target the right audience with the right message at the right time. As the physical store environment begins to change, with retailers dedicating more floor space to experiences, brands need to start using stores as showcasing stages in order to drive engagement both online and offline. Increasingly retailers and brands should be providing proximity, speed, reliability and convenience to succeed with shoppers, ultimately giving greater choice with ordering, purchasing and fulfilment processes.

And, of course with data now being the enabler for optimization across all elements of retail from supply chain to marketing, retailers and brands can’t afford not to adopt data-driven approaches for their strategic decision-making.
 

Why is retail media becoming so important for brands?

Every brand wants to increase loyalty and grow their sales, and one of the best ways to do this is to connect with shoppers at multiple touchpoints along the shopping journey.  While we know that more than 75% of grocery shoppers make purchase decisions at shelf, the consideration phase does not simply start and end in-store. As much as 56% of in-store sales are influenced by digital interactions[1], meaning that brands need to be reaching shoppers in different ways, in different channels. Delivering exceptional, personalised experiences from sofa to store is essential.

Integrated retail media enables brands to make a greater impact and create a consistent shopper experience via many channels, driving brand preference and purchase intention. Multi-touch attribution measurement helps brands understand the impact of their campaigns on customer buying behavior. By learning and improving with each campaign evaluation, brands will optimise reach, engagement and sales.

What are the biggest trends in retail media and how do you expect the market to change in the near future?

As it continues to grow, Amazon will gain more and more importance in the retail media space in Europe, competing with Google and Facebook as a desired top advertising platform for brands. As the media landscape changes, brands will want to diversify their presence and advertise on other media platforms. This opens up the opportunity for real growth in the retail media space.

Looking at how retailers are evolving, particularly in their ability to collect customer data from many touchpoints in the shopping journey, it’s likely that more of them will take a closer look at either starting their own retail media business or scaling up their existing media operations. By maximizing their data and store real-estate assets, they will not only open up a significant new revenue stream, (generating predicted additional income of up to 1% of their total sales) but will create a media platform that can cover the full customer journey – from digital, to non-digital, to store.

In the end, the consumer will be the biggest winner, if brands and retailers can work in sync to deliver a much more relevant and personalized shopping experience using customer data science to drive action based on true insights.
 

Advertising is a decades-old revenue engine for brands, but it's gone off the rails in an era of data and technology obsession. Little understanding of consumer ad sentiment and too much short-term thinking has led to a crisis in consumer ad experience and threatens brands' business growth. Download this complimentary copy of Forrester research to help you determine what steps to take to get back on track.

Key Takeaways:

Advertising Ignores Consumer Attitudes
Consumer attitudes toward advertising are highly variable, but brands have no idea of this and ignore this critical dimension in their advertising. 

Ad Technology (Adtech) Can Hurt Or Help
Digital and programmatic have ushered in plenty of problems in advertising but also offer marketers the necessary tools to deliver customer-obsessed ad experiences. 

Reorient Advertising Around Consumers
Rethink your tech stack with consumers at the center, start asking consumers how they feel about your ads, and bring creative and media planning back together for better results.

A new format in grocery retail is emerging: the 50,000 square foot convenience store. Its value proposition to customers is simple: higher quality perishables and ready-to-eat items than your typical grocery store. Thousands of the same center-store products you can also find at Walmart, Target, Amazon, Costco and Sam’s Club. Everything at higher prices. Added bonus: since the store is 10x to 20x bigger than your typical c-store, you can get your steps in and burn calories at the same time.

Wait, what?

The reality is that this is not a new format—rather the customer-led repurposing of a familiar one: the traditional, regional grocery store. This finding comes from a follow-up analysis of data collected for the recent 2019 Grocery Retailer Preference Index report, a report which identified winners and losers among the 56 largest retailers in the U.S. Grocery Retail Industry. In this follow-up analysis, we examined the types of trips people took (e.g. bigger vs. smaller) to each retailer, as well as the categories they bought (e.g. produce, ready-to-eat or paper products). The findings cast further light on the problems faced by traditional grocers in an evolving grocery landscape that has seen national mass, club, drug, dollar, convenience and digital players invest more in the grocery game the past few decades.

When considering trip types and categories sought by customers, five general types of retail destinations emerge:

• All-around grocery shop
• Perishable and ready-to-eat small basket
• Quick and convenient meal
• Non-perishable stock-up
• Non-perishable small basket

Certain channels lend themselves to certain destination types. Specialty grocers like Trader Joe’s or Sprouts, with fewer SKUs and smaller formats than the traditional grocer, tend to fall in the “Perishable and ready-to-eat small basket” destination type. Club and mass are non-perishable stock-up destination. Drug, dollar and digital in non-perishable small basket. C-stores in quick and convenient meals. However, many traditional grocers have an identity crisis. Only 6 in ten are seen primarily as “all around grocery shop” destinations, despite all of them carrying the full complement of SKUs.

In other words, almost half of traditional grocery stores are shopped more like a convenience and specialty store than like a store with 10-20x more products than that. At best, categories beyond perishable and RTE food are typically an afterthought and only shopped in a pinch. At worst, those categories are bypassed completely by shoppers, who instead buy the same products for cheaper at widely available mass, club, digital, dollar or drug channels. 

The result of being treated as a perishable c-store is a lower share of customer wallet. Traditional grocers who are all-around grocery destinations win 33% of their customer’s share of wallet, versus only 20% for traditional grocers shopped like a perishable c-store.

So, what can traditional grocers who are not being viewed as an all-around grocery shop do about it?

According to an analysis of customer needs gathered from a survey sent to 7,000 shoppers in the U.S., if traditional grocers want to ensure they’ll be an all-around grocery shop, they need to ensure some key ingredients are in place:

• Highly relevant assortment, which is rarely out of stock
• Prices that are consistent on inelastic and competitive on key-value items, while offering discounts on the products that are important to customers and responsive to promotions
• Decent perishable quality

For now, traditional retailers aiming to be all-around grocery shops can trade-off on having the best digital offering and the best ability to get customers in and out quickly. These things are less important to customers when picking an all-around grocery destination.

While some traditional grocers are struggling to win the title of all-around grocery shop, one non-traditional store isn’t: Aldi. Aldi’s consistently industry-leading prices and their ability to manage out of stocks and store cleanliness just as well as your average traditional grocery store, has made them a stock-up destination for perimeter categories, like produce and dairy, as well as center store packaged food items. As a result, despite having stores which carry less than 2,000 SKUs, Aldi’s share of customer wallet is in line with that of the average traditional grocery store, which often carry more than 40,000 SKUs.

Of course, the reality is that no single non-traditional competitor is eating away at traditional grocers’ hold on the all-around grocery shop. Rather, a host of non-traditional competition, each with unique value propositions, are all taking small bites, which add up. The data suggests that this is because traditional grocers took their eye off the retail basics, perhaps because they grew complacent after decades of dominance and relatively little industry disruption from non-traditional substitutes.

So, the call to action is clear: before overinvesting on any shiny new toys, like eCommerce or technology to speed up checkout, get back to your roots and make sure you’re offering the right prices on the right products.

To mark dunnhumby’s 30th birthday this year, we’re looking ahead to what the next three decades could bring.

There’s no doubt that the world of retail has changed enormously since dunnhumby was born in June 1989. From the launch of contactless payments to self-checkouts and digital shelf edge pricing, the world of commerce has come on leaps and bounds. This begs the question: what changes could the next 30 years bring, for both retailers and their customers? Looking at the direction of travel retail is taking today, here’s what our experts think shopping might look like in the near future...

Food for thought: the menu of tomorrow

While there’ll always be dishes that will never go out of style, certain foods are set to go through some pretty exciting changes. Forget beef burgers – think plant-based protein, or ‘meat’ grown from cells in a lab. Sushi fans will be tucking into Ahimi® – a tuna alternative made from tomatoes. And that delicious bacon served up with breakfast? A meatless substitute made from shiitake mushrooms. But that’s just for starters.

We also expect to see fresh produce harvested from the grow tower or ‘living wall’ in local stores, or even from the roof garden on every apartment building. There’ll be personal genetically-engineered nutrition bars and snacks designed to help meet individual health and disease-state needs too. All produced by a 3D printer that keeps a record of individuals’ DNA profiles. Truly taking the science of personalisation to the next level…

Delivery on tap: food shopping that’s easy as pie

Who will have time to go to the store themselves? Already today one-hour order-to-delivery is common, particularly in urban areas. Yet in 30 years’ time, this will be the norm, with drones, driverless vehicles and food printers delivering the food shop. Don’t want to wait in? Groceries can be securely delivered to customers’ own refrigerators by the ride-sharing service or to electric scooters or hoverboards or jet-packs (whatever modes of personal transport are trending…), ready for them to collect at their leisure.

For retailers, this means much leaner supply chains and super slick delivery models will be essential. Robotic technology is likely to handle many of the jobs such as warehousing, distribution and store operations. Machines will even help consumers decide what’s for lunch and then prepare it for them. And hopefully clean up afterwards too...

Cool customers: the surprising potential of your fridge

We’re already seeing smart technology in some appliances. Let’s take fridges as an example – current ‘smart’ models are able to look up recipes and read the steps out as you cook, or set expiration dates and display notifications to make sure you use food while it's fresh. But things are set to go next-level in the future. We’re talking about fridges that become ovens, with sections that hold pre-prepared meals and can warm them on demand, all operated remotely by mobile device. Particle detectors within the fridge will monitor gases released by fresh food as it ages, alerting owners when food is near to spoiling. This tech will also have the ability to detect the nutritional value of the food in the fridge. These smart devices will work in partnership with domestic robots who will plan menus for their owners based on nutritional calculations and efficient use of what’s already in stock.

Consumers who prefer to choose for themselves will be able to use VR-enhanced technology from the comfort of their sofa. With the store of their choice projected into their headsets or glasses, they’ll be able to browse the aisles, touching and smelling the products as well as seeing them – all without setting foot in the shop. As if spending wasn’t easy enough already…

High sustainability standards: the norm of the future

Through public opinion and legislation, the grocery industry of the future will become more sustainable. Fewer visits to stores and deliveries made by electric or solar-powered vehicles will reduce the carbon footprint. And the current packaging crisis will be resolved, with plastic likely to be outlawed and biodegradable materials used as standard.

Customers of today are already demanding more local, regional products – and this is a growing trend, so it will be no surprise to see local brands outperforming global ones. To keep them happy, retailers will need to engage with smaller suppliers in the way they do the big brands today, using customer data and working collaboratively to anticipate and meet demand for products produced or grown in more environmentally-friendly ways. Food provenance scandals show that even today, the supply chain is on the brink of scale implosion and use of blockchain technology to improve traceability in food supply chains is likely to become standard practice.

Brick by brick: physical stores are safe as houses

Bricks-and-mortar stores will still exist in 2049, but they’ll look very different to today’s stores. People will still visit shops, but for entertainment instead of necessity. Rather than just pop in for their bread and milk, they’ll visit to check out new brands, watch recipe demonstrations, sample new products or services and see what the latest trends are. If they like what they see, they might take goods-to-go, but more likely will have them delivered.

This means that larger format stores will probably all but disappear, replaced by smaller, easier-to-shop stores that hold less stock. But, most importantly, they’ll still be made of bricks.

The devil’s in the data: the customer is always… first

Data being the driver behind modern retail strategies is something that will continue to evolve – in fact, no retailer or CPG (Consumer Packaged Goods) brand will survive without it. Customer Data Science will have an all-encompassing customer model, allowing deep 360-degree understanding of customer interactions and how different marketing levers impact customer behaviour, purchase intent and satisfaction.

But customer intuition around the value and leverage of their own data will evolve alongside this. Customers will access, control and share the data held about them by others, aided by radical new services and software.

Game on: value versus innovation

With no sign of the pressure on retail margins easing, it’s likely that private label products will overtake brands, making retailers operate more like manufacturers. However, CPG manufacturers will themselves operate more like retailers, selling direct to consumers, and through third-party marketplaces like Amazon.

Private label will continue to compete with brands on value, with branded products continuing to hit back with innovation. And both will have to compete on quality.

Differentiating commoditised goods will be increasingly challenging in the coming years. In 30 years’ time, we may see customers buying subscriptions for unlimited household goods, in the same way that we buy unlimited data on mobile phone plans today.

Customer first, 2049 style

Whatever the future brings, grocery retail will be a very different industry in 30 years time. But one thing that won’t change is the need for retailers and CPGs to put their customers first.

With physical visits to stores no longer driven by the need to replenish, footfall will be lower and retailers will need to provide experiences that inspire and entertain to motivate shoppers to want to visit them. Having said that, physical stores will still offer an invaluable opportunity to build relationships with customers that will be much harder for online-only marketplaces to achieve. For many, ordering online is often not quite as gratifying as the in-store shopping experience.

Wherever they shop, tomorrow’s clientele will demand an exceptional experience from retailers – and providing this will still be founded on a solid understanding of people.

From all of that, one thing is clear: getting to grips with today’s data-driven economy is the best option for any retailer or brand who wants to be prepared to serve the needs of their customers of the future.

Loyalty strategies are an essential component of modern retailing, and when executed well, they can generate valuable Customer behavioural data which powers sales and revenue generation. Recent research has shown that loyal Customers are responsible on average for 73% of sales growth for brands. Yet despite this, the vast majority of loyalty initiatives are failing to engage the modern consumer. How can you ensure your loyalty approach delivers sustainable results while keeping pace with shopper needs and expectations?

Our latest report shares 10 important tips to help you a create a loyalty strategy that will drive preference for your brand and make a real impact on your bottom line. Download today to learn more about:

• the right combination of rewards, incentives and engagement initiatives
• how you can move beyond “cards and points”
• which KPIs are important for measuring loyalty
• how personalisation can aid flexibility for future change

It’s easy to see why click-based attribution has been so enduringly popular in digital. It’s simple, it’s direct, it’s more or less free to set up through widely available tools, and it doesn’t take a mathematics PhD to track the measure. Moreover, it allows marketers to quickly calculate an ROI and prove, in theory at least, that their chosen channels are effective. Little surprise, then, that last click remains extremely popular as an attribution model[1].

Deep down, though, most marketers can spot the flaws in this method. Last click and last touch may have been appropriate in another age, when there were fewer channels, fewer publishers and generally fewer ways of interacting with customers. That’s even before you take into account that globally, fewer than 1 in every 2,000 ads served even gets clicked[2].

With ever-increasing marketing sophistication, customer expectation and speed at which the array and complexity of marketing channels is expanding, the numbers just don’t add up to support this model any longer. 95% of marketers say they know how important multichannel marketing is for targeting, yet only 73% say they have a multichannel strategy in place[3]– a very telling gap.

What’s worse is that by persisting with this model, tech providers are actively rewarded for bad practice. If the attribution is all about what the customer saw or did last, the best strategy for each channel is bombardment. If a retargeting ad is in front of a customer 20 times a day, there’s a much higher chance it’ll be the last touch than if they only saw it once. Multiply this across competing channel providers, and there’s little wonder customers get annoyed with digital advertising.

Without more sophisticated attribution methods, marketers risk a triple threat to their efforts: an inaccurate measurement framework, promoting partners with poor practices, and alienating the very customers they’re trying to attract. This can only lead to brand erosion in the long term.

Savvy marketers are increasingly turning to multi-touch attribution. Instead of thinking about the last channel the customer saw, they’re thinking about how their whole marketing effort works together and how channels work in sync to drive sales. That’s why good campaign design should be focused around customer data insights.

Moving beyond last click

Measurement models to date have proven to be misleading and, perhaps, focused in the wrong areas. Recently, a global telecommunications client challenged us to prove Programmatic performance. Their incumbent last-click measurement model indicated that this approach wasn’t performing well.

But was the last click the most important result to be measuring? Was it ensuring the customer received the best experience and the client had the best sales outcome, which is what a good model should prove? This was put to the test when a neutral third party was asked to decipher if this was adding value or not.

Their approach was to measure through a multi-touch model and a straightforward A/B test: half of the target market ran with dunnhumby Programmatic (in addition to other paid and owned channels), and half without. The question was simple: was this approach generating incremental sales for the client?

The results were unequivocal. In the space of one month, the area running Programmatic generated 15% more sales than the area without. Having this customer experience-driven focus along with the data-driven insights were a measurable benefit to all other channels; switching it off led to a 12-50% drop in sales for every other channel in the marketing mix. The chart below indicates where the losses occurred for each of the channels not supported by programmatic activity. The study also showed that in a single month, running the tool was delivering an incremental 2,800 sales of big-ticket electrical items for the client, generating an extremely strong ROI and the lowest CPA of any marketing channel.  

Improving the marketing mix with multi-touch

This approach was hugely beneficial for the client. Using the multi-touch model and smart attribution techniques gave them invaluable insight into the ideal mix of channels. As a result, they were able to allocate budget based on true performance, increasing the efficiency and effectiveness of their spend. The study gave them confidence to upweight their investment in dunnhumby Programmatic by almost 20% vs the previous year and they went on to achieve a 54% growth in peak season sales year-on-year.

The danger for marketers using last click or last touch is that the results don’t tell the same meaningful story. By only focusing on clicks or final actions, brands will miss the combined effect and value of channels and solutions. At worst, this can lead to a heavily unbalanced marketing mix which prioritises the wrong channels or even the wrong partners, creating a marketing effort that works against itself rather than channels improving each other.

It’s not an easy step to move away from the classic models, but by evolving your success metrics to focus on multi-touch attribution, you’ll have greater visibility of the true performance of your marketing efforts.

Much of the retail industry is talking about Digital Transformation and looking at how best to support their transition from the old to the new, with a minimum of pain. Maintaining legacy systems alongside cutting-edge technology creates an interesting challenge, so this month we talked to Denise Day, Chief Information Officer to get her views on how clever management of technology can drive operational efficiencies and enable smarter decision making.

With constant change in the technology landscape, what factors do you think retailers and brands need to prioritise in their efforts to modernise their processes and systems?

Where to start! This is a complex question to answer, as many of the main priorities are inter-connected.  However, these are the key questions retailers and brands should be asking themselves when it comes to keeping their technology fresh:

• What hardware does your business run on, where is it located and how old is it? How is modernisation and renewal prioritised and funded?
• How does data flow around the business? Where is data produced and stored and through which tools and systems is it consumed? How is it protected and secured? 
• What is the current operational support footprint?  Attributing value to efficiencies delivered through transformation makes for an easier business case.
• Consider the end-user experience in everything. Creating simplicity, improving processes, making things faster, smarter and easier to use makes a big difference.
• What role does science and innovation play in this space? Are these core strengths within your retail business? Is it clear when best to build, buy or partner to innovate and modernise?
• How has the technology landscape of today impacted your business continuity? Much might be in the cloud, but the cloud is still a physical data centre with physical infrastructure, which requires secure processes and governance.

What do you think is the biggest game changer when it comes to enhanced technological experience?

Questions such as what data to keep, what to discard, how to secure and protect it– all are common conundrums facing our clients today. The variety of data points allows technology to leverage science in a wide range of contexts. It provides opportunities to model complex scenarios and test hypotheses. At the heart of this is Machine Learning (ML).  Allowing ML to determine the interplay of seemingly unconnected data points delivers surprising, and sometimes seemingly counter-intuitive results. But its power lies in the removal of natural human bias and instinct – allowing science to determine what is important and what is not in a given situation.

Modelling, theorising, testing, applying, enhancing and repeating complex science can now be managed dynamically, delivering modularity and scale. Having the ability to build and process on demand is becoming more and more important too.

Tell us a little bit about how the work of the technology services team helps clients win.

My team specifically supports, maintains, operates and renews the technology ecosystem to ensure our clients have access to the fastest, smartest customer data science to allow them to make informed business decisions, quickly and efficiently.

High availability of our services and platforms is critical to building a trusted relationship with clients, and is a key success measure that we monitor. There are aspects of the science we have developed for retailers and brands that is replicated in our own internal services and systems, for example improving the customer experience when engaging directly through the service desk. Embedding machine learning and chatbots to optimise our own systems, powered by data-driven science is hugely impactful – it helps to streamline processes, deliver fast first fixes, and helps to predict issues in order to remedy them using incident clustering and links to change.

What are your retail technology / infrastructure trend predictions for the next 12 months?

Legacy technology and the housing thereof will continue to be a thorny issue for businesses to wrestle with. To cloud or not to cloud, to go all in or not, how fast to make the move – the debate will continue to challenge not just retail, but many industries as they refresh their IT infrastructure.

On a positive note, technology and infrastructure developments will create greater improvements in the day-to-day working life of employees. It is already providing greater flexibility, powering smarter ways of working, and delivering optimised workflow processes.  My prediction is that it will elevate the employees’ experience to more closely match that of an online shopper.

In dunnhumby’s first Retailer Preference Index study conducted for the Australian grocery market,  we examined closely what drives Australian shoppers to choose their preferred grocery retailers. The report takes a snapshot of Customer preference for grocery retailers and explores the various levers retailers can pull to improve their rankings over time.

The Australian Grocery RPI applies a focused lens by looking at the five national Australian grocery retailers -- Woolworths, Coles, Aldi, IGA, and 7-Eleven -- based on how well they are meeting their Customer needs today.

The study included 1,500 individual respondents -- resulting in 3,900 unique retailer evaluations -- factoring age, state, and family composition. There are a number of ways the RPI can be used to develop effective grocery retail strategy. But our chief goal was to answer four core questions:

• What drives retailer preference among Australian shoppers?
• Which retailers are winning or losing?
• Why are they winning or losing?
• What can retailers do to improve emotional connection and financial performance?

The methodology in the RPI correlates a retailer’s preference driver scores (convenience and quality; easy shopping experience; price; operations; drive time) with their emotional connection with Customers (satisfaction; likelihood to recommend; trust; intensity of attachment) and financial performance (share of visits). By understanding what creates the strongest combination of financial performance and emotional connection with their Customers, Australian retailers can be better prepared to take on their competition in competing for Customers today.

For more information, download a free copy of the report. If your banner is in our report and you'd like your custom brief, contact us. 

The list of banners evaluated, in alphabetical order, include:

• Aldi
• Coles
• IGA
• Woolworths
• 7-Eleven

There is an age-old debate in retail which pits two diametrically opposed ideas against each other: on the one hand, the idea that offering a wide choice of products enables customers to find something that meets their specific needs. On the other hand, too much choice leads to clutter, complexity and overall a painful shopping experience. How do retailers find the right balance to provide a good shopping experience?

Shopping as self-expression

The arguments for the first position – call it the “individualisation argument” – start from the assumption that different customers, generally all being different from each other in various ways, would benefit from a more tailored solution to their specific problem. One customer has sensitive teeth, another wants fresh breath; one would like 2 servings, another 4 servings; and so on. In this scenario, more choice offers advantages for some and few if any disadvantages for others. The more options there are, the more likely you are to find a product with the right combination of attributes to suit your taste and budget.

Choice also encourages innovation and experimentation which would seem to be a long-term benefit for consumers. Ultimately until you try something, you don’t know if you’re going to like it. Through a recent study we know that consumers go through periods of “exploration” followed by long periods of “exploiting” their preferred option. Without sufficient choice, a customer’s opportunities to explore (and hence find a product that they prefer) are much curtailed.

Choice can also be regarded as enabling self-expression, which is a fundamental value in Western democracies. The idea is that the choices a consumer makes can create an identity for themselves which represents their own unique qualities and personal brand. In an age when people are urged above all to “be yourself”, it becomes almost a moral imperative for retailers to offer customers choices and ways to “stand out from the crowd” or at least validate their personal identities.

Decision paralysis and the paradox of choice

Despite these strong arguments, the idea of a “paradox of choice” – that too much choice can be a bad thing – remains relevant and still carries a lot of weight with brands, retailers, and even customers themselves. 

First, there is the obvious point that too many options can delay the customer finding the product they are looking for or indeed any product which would approximately meet their basic need. Having to scan hundreds of French cheeses in the supermarket before finding any Cheddar does not feel very customer-centric.

A subtler argument suggests that presenting too much choice accentuates various cognitive biases such as “buyer’s remorse” that a customer may experience while making a purchase.  The thinking here is that too many options prevent the customer from feeling entirely satisfied with their final choice as it probably involved some trade-offs (such as price vs convenience) which are likely to require an unreasonable amount of brain power in a busy shopping environment where shoppers are looking to shop quickly and efficiently.  

There is potentially a vicious circle where the more options, the more the customer’s brain is literally overloaded with information, more stress is created, the more customers will look to take short cuts and end up making a sub-optimal decision. One famous study published in 2000 by psychologists Sheena Iyengar and Mark Lepper discovered that customers offered 24 different types of jam were less likely to make a purchase than those offered only 6 types. In this case customers who faced greater choice were presumably driven into a kind of “decision paralysis” where making no purchase seems like the safer option.

Finally, there is the argument that beyond a certain point, choice becomes essentially vacuous. In some cases, the customer is presented with the appearance of choice but in fact many of the so-called choices are the same basic product only with a different name or wrapper. There is a memorable scene from The Simpsons showing an extreme example of this, where Homer visits the ‘Duff’ beer Factory and is shown seemingly three distinct flavours of Duff beer all supplied by the same pipe.

The worry here is that choices are being invented to “fool” the customer into thinking there is something new to explore or there is a “light” or “healthy” or “max” version of something which could bring added benefits (but the differences are imperceptible). Furthermore, such tactics are sometimes considered a conspiracy on the part of brands to increase shelf space for their products (at the expense of other brands) by artificially inflating their product count to improve their bargaining position for space.

Are customers facing information overload?

So, the Individualizer argues that greater product choice promotes freedom, self-expression, and customer self-actualisation. The more cynical consumer psychologist would claim that all these products are effectively the same, probably coming from the same factory, and making customers wade through dozens of artificial alternatives is frustrating and time-consuming for no real benefit.

The problem with the cynical argument is that it portrays the retail shopping experience as being fundamentally a challenging and stressful environment from which the customer’s job is to “escape” with a product that mostly meets their needs.

Using metaphors like the customer being “bombarded” with information reinforces the impression the customer is a victim of merchandising and promotional tactics and their only real choice is either to succumb to a blitz of competing product claims or opt-out altogether and make no purchase.

In fact, simply posing the problem as a question of what will induce the customer to make a purchase? (any purchase) already presents the customer as being at the limit of their stress tolerance, instead of a willing and active forager for information.

So, what can retailers do to make it easier for the customer to find the information necessary to make the right decision for their circumstances?

One key area is improving the flow of products in a category so that instead of being presented with 100+ alternatives all at once, the customer is presented with 5-6 binary options which together whittle down the consideration set to just a handful. This can reduce the risk of “decision fatigue” for the customer while subtly guiding them towards the product which is most likely to be right for them.

Personalised recommendations are also incredibly powerful whether in direct marketing or from a “digital assistant” who might pop up during an online shopping trip. Home Depot in the US have taken this a step further by providing a map and an in-store product location in their app such that a customer can cut through the “noise” of a vast in-store assortment and quickly locate the product they want. Imagine if your phone were to bleep or flash as you got closer to the product, or even when you walked past a promotion that an algorithm thought could be interesting to you, providing you a personalised recommendation in real time. Suddenly it feels as if the whole store is transformed into a “personalised experience”.

Perhaps most important of all is to provide choices that will truly resonate with customers. That means avoiding false dichotomies and hyped-up claims and instead investing in developing alternatives that a customer would recognise and respond to. Some of the questions a brand might consider are: Which segment does the customer belong to and what are their wider lifestyle needs? What dietary requirements do they have? Which product attributes do customers consider most important? Which products do customers consider substitutable with each other?

Neither should brands be ashamed of selling a vision as much as a reality. The cynic who argues from the fact that one toothpaste produces similar results to another that therefore most product variety is redundant, is essentially trying to reduce the customer experience to the lowest common denominator. Retaining the possibility for the customer to learn something, be inspired, or feel like they got a great deal is an essential first step for retailers and brands to delight shoppers and exceed their expectations every time they get chosen.  

从1994年互联网接入中国，发展到2019年，已经整整25年。25年的时间，一个出生婴儿已经长大成人，意气风发并可以独步江湖了。

1999年是中国电商起步的一年，当时eBay和亚马逊仍是商业媒体的焦点，直至2008年以阿里巴巴和京东为代表的中国电商开始腾飞。谁能想到仅仅8年之后，中国的线上交易量就能够超过美国，并在此后3年仍保持强劲增势。eMarketer提供的一组数据中显示，中国零售市场到2020年网购交易额将达到2.5万亿美元，是美国的3.5倍，网购人数将占全世界线上交易人数的60%，但只占中国总人口的一半不到，中国的线上销售额将增长24%，增长速度冠绝全球。

2008年也是《自然》杂志专刊首次提出BigData概念的时候，随后的2年大数据逐步从成熟走向应用，一直到今天，学术界及企业界对于大数据应用研究的讨论火热依旧，渗透在商业、科技、医疗、政府、教育、经济、交通、物流及社会的各个领域。

那么2019年，数据科学在零售业领域面临哪些挑战和机遇呢？以下是我的一些观点。

零售供应链变革

零售业应用大数据和数据科学最直接的目的是帮助零售商实现精准营销，从而降低营销成本，扩大销售额，同时帮助厂商减少产品过剩。随着C2M（Customer to Manufactory）的时代来临，消费者将主导市场，从零售到制造，市场驱动力和驱动方向发生逆转，供应链的变革随之而来。在新的供应链模式到来之际，数据科学的应用会进一步深入。

如果营销是商家的脸，产品和运营是气质和才华，供应链就是经脉和血液。供应链模式变革会从本质上改变零售商和制造商的命运，这一方面包括通过供应链的结构优化来提升快速反应能力，另一方面是通过供应链的数字化来提升需求管理能力。

自动算法和机器学习自动化

在中国，电商的爆发式增长引发了一定的大数据热潮，如今电商巨头将触角伸向了线下零售，因此很多企业把数据科学作为技术投资的一个主要领域，数据量随之快速大幅度增长。

随着数据科学家拥有越来越多的数据和工具，自动算法和机器学习自动化将被用来探索更多假设，比如以前是人工凭经验去调整参数，这个过程比较繁琐，时间也很长，现在将通过机器学习的方法代替人调整参数。Gartner预测，到2020年，超过40％的数据科学任务将实现自动化，那将是所有人都能成为数据科学家的时候，数据洞察将在整个企业中得到更广泛的应用，

然而，实体零售业实现数字化的压力不小

线上零售相比实体零售具有一定优势，首先是比较容易获得数据，再加上有阿里巴巴、腾讯这些公司的一系列投资行为，线上在数据科学应用和覆盖面上相对来说比线下要好很多，同时也能更好地切入到运维中去。

如果线上零售的数字化程度是10分，那么线下零售可能只能打5分。线下零售的问题很大程度上，一是因为数据本身很难收集到，各个零售商和品牌商各自有各自的数据，彼此之间很难去打通，二是有了这些数据，做完分析之后，很少能够呈现成运维的工具，比如消费者的洞察报告很难落实到执行层面。由于有很多因素不能被量化，使得部分数据在一开始做数据分析的时候就没有被带入进去，结果是报告存在没有被考虑的方面，最后报告的结论也不一定能够被执行。

换句话说，因为很多环节是由人来操作的，所以线下很多场景的数据不像电商那样，可以将所有消费者行为数据一五一十地记录在后台。

比如传统上做海报的选品，评估海报选品效果，用历史的记录迭代式地更新下一次选品性能提升，以前主要是人为操作，只是用IT的系统做辅助的数据记录，甚至一些地区门店在IT设置方面都不到位，基础的信息捕捉都没有，所以运维上的其他信息就更难获得。

人、货、场全链路数据洞察

从0到1，零售行业大数据整合应用全攻略一文中说到转型成为数据驱动的企业需要长远规划和坚定实施，就是说要转型成为数据驱动的企业在基础设施上需要加大投入，并且有很多需要变革和改进的地方，包括建立围绕人、货、场的消费者、产品、营销、渠道、物流等建立全面深度的数据体系。

“人”就是顾客洞察或者消费者洞察，包括从大数据形成基于顾客群的分类和顾客洞察，他们是谁？喜欢什么？购物的偏好是什么？网上社交媒体行为是怎么样的？这些数据量很大，通过机器学习的方法可以获得方方面面的顾客洞察，用来指导营销决策，甚至于形成将来一些新的趋势，帮助产品研发做前期的调研。虽然线上数据更多，但是如果只用线上数据会有偏颇，加入线下数据能够更完整地画出顾客画像。

“货”就是产品，包括通过销售数据和顾客数据，指导淘汰老品或者新品上市，产品的概念本身从何而来也可以通过大数据做调研，新品价格和定位、新品上市后做跟踪、新品表现、营销活动表现、营销策略的制定、媒介推广的不同媒体渠道哪个ROI效果最好，背后也可以有很多的数据科学做帮助。

比如当品牌商想做精准营销时，我们根据品牌商的目的去做人群的筛选，可以通过一些KPI指标将目标人群过滤出来，通过我们内部的一些算法标签知道具有哪些标签的用户当你给他做产品推广的时候，更容易接受优惠券。

我们的精准营销能力已经得到业界的认可，并在腾讯开发者大会上被当做经典案例被分享。目前已经服务过31家知名的品牌商，包括宝洁，玛氏，百威英博，可乐，美素佳儿，亿滋等等。

“场”可以是线上线下的各种消费场景。从中获得的各种数据，经过有效的整合、分析、应用能够帮助零售商和品牌商做出更正确的商业决策，提升顾客购物体验，增加企业运营效率。例如选品工具可以协助零供双方做到千店千面的货架陈列和品类管理；门店诊断工具，可以帮助零售商快速识别问题门店及其整改策略。

邓韩贝在全球范围内拥有30年零售行业经验，由于始终专注于零售业，我们从合作伙伴身上获得了很多行业特色的数据能力。我们涉及但不限于快消、金融服务、医药连锁行业的顾客洞察、顾客战略、定价与促销、品类管理及零供合作等各个方面。

与零售商和品牌商直接合作的方式，让我们有颗粒度最细的数据，在这个基础上我们用数据科学打标签，那么形成的洞察对于这个特定零售商体系内是最完整最精准的。

此外，我们可以基于顾客购买的真实数据提供数据产品和服务，这比通过采样得到的调研数据或二手三手数据更精准、更有效。

总结来说，数据价值存在很大的挖掘空间，有效使用数据能够帮助企业降低成本、增加收益、优化营销、预测未来，比如千人千面的广告是营销方面的数据科学应用。供应链方面的数据科学应用是新零售下一个要解决的问题，也就是怎么用更低的成本更快速地将产品交到消费手上。现在微软、亚马逊、阿里巴巴等大企业纷纷把能力放在各自的云服务上，当更多企业都能够接受把数据布局在云上，可以像水电煤气费一样简单地调用，AI的普及将会更快……

数据科学无论在学术领域还是应用领域的讨论从未间断，多元化全渠道的趋势给行业带来更多挑战和机会，未来数据科学的探索领域也会不断扩大。

原文最先刊载于邓韩贝官方微信公众号：邓韩贝dunnhumby（ID: dunnhumby-China），扫描下方二维码关注我们，获得更多精彩。

Understanding what drives Customer preference in grocery retail and how emotional connection links to financial performance is key to competing in the battle for Customer loyalty and spend.

Dunnhumby’s  Australian Grocery RPI applies a focused lens on Customer preference by looking at the five national Australian grocery retailers -- Woolworths, Coles, Aldi, IGA, and 7-Eleven -- based on how well they are meeting their Customer needs today.

Here are a few key takeaways:

For more information, download a free copy of the report. If your banner is in our report and you'd like your custom brief, contact us. 

The list of banners evaluated, in alphabetical order, include:

• Aldi
• Coles
• IGA
• Woolworths
• 7-Eleven

To mark dunnhumby’s 30th birthday this year, we’re looking ahead to what the next three decades could bring.

There’s no doubt that the world of retail has changed enormously since dunnhumby was born in June 1989. From the launch of contactless payments to self-checkouts and digital shelf edge pricing, the world of commerce has come on leaps and bounds. This begs the question: what changes could the next 30 years bring, for both retailers and their customers? Looking at the direction of travel retail is taking today, here’s what our experts think shopping might look like in the near future...

Food for thought: the menu of tomorrow

While there’ll always be dishes that will never go out of style, certain foods are set to go through some pretty exciting changes. Forget beef burgers – think plant-based protein, or ‘meat’ grown from cells in a lab. Sushi fans will be tucking into Ahimi® – a tuna alternative made from tomatoes. And that delicious bacon served up with breakfast? A meatless substitute made from shiitake mushrooms. But that’s just for starters.

We also expect to see fresh produce harvested from the grow tower or ‘living wall’ in local stores, or even from the roof garden on every apartment building. There’ll be personal genetically-engineered nutrition bars and snacks designed to help meet individual health and disease-state needs too. All produced by a 3D printer that keeps a record of individuals’ DNA profiles. Truly taking the science of personalisation to the next level…

Delivery on tap: food shopping that’s easy as pie

Who will have time to go to the store themselves? Already today one-hour order-to-delivery is common, particularly in urban areas. Yet in 30 years’ time, this will be the norm, with drones, driverless vehicles and food printers delivering the food shop. Don’t want to wait in? Groceries can be securely delivered to customers’ own refrigerators by the ride-sharing service or to electric scooters or hoverboards or jet-packs (whatever modes of personal transport are trending…), ready for them to collect at their leisure.

For retailers, this means much leaner supply chains and super slick delivery models will be essential. Robotic technology is likely to handle many of the jobs such as warehousing, distribution and store operations. Machines will even help consumers decide what’s for lunch and then prepare it for them. And hopefully clean up afterwards too...

Cool customers: the surprising potential of your fridge

We’re already seeing smart technology in some appliances. Let’s take fridges as an example – current ‘smart’ models are able to look up recipes and read the steps out as you cook, or set expiration dates and display notifications to make sure you use food while it's fresh. But things are set to go next-level in the future. We’re talking about fridges that become ovens, with sections that hold pre-prepared meals and can warm them on demand, all operated remotely by mobile device. Particle detectors within the fridge will monitor gases released by fresh food as it ages, alerting owners when food is near to spoiling. This tech will also have the ability to detect the nutritional value of the food in the fridge. These smart devices will work in partnership with domestic robots who will plan menus for their owners based on nutritional calculations and efficient use of what’s already in stock.

Consumers who prefer to choose for themselves will be able to use VR-enhanced technology from the comfort of their sofa. With the store of their choice projected into their headsets or glasses, they’ll be able to browse the aisles, touching and smelling the products as well as seeing them – all without setting foot in the shop. As if spending wasn’t easy enough already…

High sustainability standards: the norm of the future

Through public opinion and legislation, the grocery industry of the future will become more sustainable. Fewer visits to stores and deliveries made by electric or solar-powered vehicles will reduce the carbon footprint. And the current packaging crisis will be resolved, with plastic likely to be outlawed and biodegradable materials used as standard.

Customers of today are already demanding more local, regional products – and this is a growing trend, so it will be no surprise to see local brands outperforming global ones. To keep them happy, retailers will need to engage with smaller suppliers in the way they do the big brands today, using customer data and working collaboratively to anticipate and meet demand for products produced or grown in more environmentally-friendly ways. Food provenance scandals show that even today, the supply chain is on the brink of scale implosion and use of blockchain technology to improve traceability in food supply chains is likely to become standard practice.

Brick by brick: physical stores are safe as houses

Bricks-and-mortar stores will still exist in 2049, but they’ll look very different to today’s stores. People will still visit shops, but for entertainment instead of necessity. Rather than just pop in for their bread and milk, they’ll visit to check out new brands, watch recipe demonstrations, sample new products or services and see what the latest trends are. If they like what they see, they might take goods-to-go, but more likely will have them delivered.

This means that larger format stores will probably all but disappear, replaced by smaller, easier-to-shop stores that hold less stock. But, most importantly, they’ll still be made of bricks.

The devil’s in the data: the customer is always… first

Data being the driver behind modern retail strategies is something that will continue to evolve – in fact, no retailer or CPG (Consumer Packaged Goods) brand will survive without it. Customer Data Science will have an all-encompassing customer model, allowing deep 360-degree understanding of customer interactions and how different marketing levers impact customer behaviour, purchase intent and satisfaction.

But customer intuition around the value and leverage of their own data will evolve alongside this. Customers will access, control and share the data held about them by others, aided by radical new services and software.

Game on: value versus innovation

With no sign of the pressure on retail margins easing, it’s likely that private label products will overtake brands, making retailers operate more like manufacturers. However, CPG manufacturers will themselves operate more like retailers, selling direct to consumers, and through third-party marketplaces like Amazon.

Private label will continue to compete with brands on value, with branded products continuing to hit back with innovation. And both will have to compete on quality.

Differentiating commoditised goods will be increasingly challenging in the coming years. In 30 years’ time, we may see customers buying subscriptions for unlimited household goods, in the same way that we buy unlimited data on mobile phone plans today.

Customer first, 2049 style

Whatever the future brings, grocery retail will be a very different industry in 30 years time. But one thing that won’t change is the need for retailers and CPGs to put their customers first.

With physical visits to stores no longer driven by the need to replenish, footfall will be lower and retailers will need to provide experiences that inspire and entertain to motivate shoppers to want to visit them. Having said that, physical stores will still offer an invaluable opportunity to build relationships with customers that will be much harder for online-only marketplaces to achieve. For many, ordering online is often not quite as gratifying as the in-store shopping experience.

Wherever they shop, tomorrow’s clientele will demand an exceptional experience from retailers – and providing this will still be founded on a solid understanding of people.

From all of that, one thing is clear: getting to grips with today’s data-driven economy is the best option for any retailer or brand who wants to be prepared to serve the needs of their customers of the future.

Loyalty strategies are an essential component of modern retailing, and when executed well, they can generate valuable Customer behavioural data which powers sales and revenue generation. Recent research has shown that loyal Customers are responsible on average for 73% of sales growth for brands. Yet despite this, the vast majority of loyalty initiatives are failing to engage the modern consumer. How can you ensure your loyalty approach delivers sustainable results while keeping pace with shopper needs and expectations?

Our latest report shares 10 important tips to help you a create a loyalty strategy that will drive preference for your brand and make a real impact on your bottom line. Download today to learn more about:

• the right combination of rewards, incentives and engagement initiatives
• how you can move beyond “cards and points”
• which KPIs are important for measuring loyalty
• how personalisation can aid flexibility for future change

It’s easy to see why click-based attribution has been so enduringly popular in digital. It’s simple, it’s direct, it’s more or less free to set up through widely available tools, and it doesn’t take a mathematics PhD to track the measure. Moreover, it allows marketers to quickly calculate an ROI and prove, in theory at least, that their chosen channels are effective. Little surprise, then, that last click remains extremely popular as an attribution model[1].

Deep down, though, most marketers can spot the flaws in this method. Last click and last touch may have been appropriate in another age, when there were fewer channels, fewer publishers and generally fewer ways of interacting with customers. That’s even before you take into account that globally, fewer than 1 in every 2,000 ads served even gets clicked[2].

With ever-increasing marketing sophistication, customer expectation and speed at which the array and complexity of marketing channels is expanding, the numbers just don’t add up to support this model any longer. 95% of marketers say they know how important multichannel marketing is for targeting, yet only 73% say they have a multichannel strategy in place[3]– a very telling gap.

What’s worse is that by persisting with this model, tech providers are actively rewarded for bad practice. If the attribution is all about what the customer saw or did last, the best strategy for each channel is bombardment. If a retargeting ad is in front of a customer 20 times a day, there’s a much higher chance it’ll be the last touch than if they only saw it once. Multiply this across competing channel providers, and there’s little wonder customers get annoyed with digital advertising.

Without more sophisticated attribution methods, marketers risk a triple threat to their efforts: an inaccurate measurement framework, promoting partners with poor practices, and alienating the very customers they’re trying to attract. This can only lead to brand erosion in the long term.

Savvy marketers are increasingly turning to multi-touch attribution. Instead of thinking about the last channel the customer saw, they’re thinking about how their whole marketing effort works together and how channels work in sync to drive sales. That’s why good campaign design should be focused around customer data insights.

Moving beyond last click

Measurement models to date have proven to be misleading and, perhaps, focused in the wrong areas. Recently, a global telecommunications client challenged us to prove Programmatic performance. Their incumbent last-click measurement model indicated that this approach wasn’t performing well.

But was the last click the most important result to be measuring? Was it ensuring the customer received the best experience and the client had the best sales outcome, which is what a good model should prove? This was put to the test when a neutral third party was asked to decipher if this was adding value or not.

Their approach was to measure through a multi-touch model and a straightforward A/B test: half of the target market ran with dunnhumby Programmatic (in addition to other paid and owned channels), and half without. The question was simple: was this approach generating incremental sales for the client?

The results were unequivocal. In the space of one month, the area running Programmatic generated 15% more sales than the area without. Having this customer experience-driven focus along with the data-driven insights were a measurable benefit to all other channels; switching it off led to a 12-50% drop in sales for every other channel in the marketing mix. The chart below indicates where the losses occurred for each of the channels not supported by programmatic activity. The study also showed that in a single month, running the tool was delivering an incremental 2,800 sales of big-ticket electrical items for the client, generating an extremely strong ROI and the lowest CPA of any marketing channel.  

Improving the marketing mix with multi-touch

This approach was hugely beneficial for the client. Using the multi-touch model and smart attribution techniques gave them invaluable insight into the ideal mix of channels. As a result, they were able to allocate budget based on true performance, increasing the efficiency and effectiveness of their spend. The study gave them confidence to upweight their investment in dunnhumby Programmatic by almost 20% vs the previous year and they went on to achieve a 54% growth in peak season sales year-on-year.

The danger for marketers using last click or last touch is that the results don’t tell the same meaningful story. By only focusing on clicks or final actions, brands will miss the combined effect and value of channels and solutions. At worst, this can lead to a heavily unbalanced marketing mix which prioritises the wrong channels or even the wrong partners, creating a marketing effort that works against itself rather than channels improving each other.

It’s not an easy step to move away from the classic models, but by evolving your success metrics to focus on multi-touch attribution, you’ll have greater visibility of the true performance of your marketing efforts.

Much of the retail industry is talking about Digital Transformation and looking at how best to support their transition from the old to the new, with a minimum of pain. Maintaining legacy systems alongside cutting-edge technology creates an interesting challenge, so this month we talked to Denise Day, Chief Information Officer to get her views on how clever management of technology can drive operational efficiencies and enable smarter decision making.

With constant change in the technology landscape, what factors do you think retailers and brands need to prioritise in their efforts to modernise their processes and systems?

Where to start! This is a complex question to answer, as many of the main priorities are inter-connected.  However, these are the key questions retailers and brands should be asking themselves when it comes to keeping their technology fresh:

• What hardware does your business run on, where is it located and how old is it? How is modernisation and renewal prioritised and funded?
• How does data flow around the business? Where is data produced and stored and through which tools and systems is it consumed? How is it protected and secured? 
• What is the current operational support footprint?  Attributing value to efficiencies delivered through transformation makes for an easier business case.
• Consider the end-user experience in everything. Creating simplicity, improving processes, making things faster, smarter and easier to use makes a big difference.
• What role does science and innovation play in this space? Are these core strengths within your retail business? Is it clear when best to build, buy or partner to innovate and modernise?
• How has the technology landscape of today impacted your business continuity? Much might be in the cloud, but the cloud is still a physical data centre with physical infrastructure, which requires secure processes and governance.

What do you think is the biggest game changer when it comes to enhanced technological experience?

Questions such as what data to keep, what to discard, how to secure and protect it– all are common conundrums facing our clients today. The variety of data points allows technology to leverage science in a wide range of contexts. It provides opportunities to model complex scenarios and test hypotheses. At the heart of this is Machine Learning (ML).  Allowing ML to determine the interplay of seemingly unconnected data points delivers surprising, and sometimes seemingly counter-intuitive results. But its power lies in the removal of natural human bias and instinct – allowing science to determine what is important and what is not in a given situation.

Modelling, theorising, testing, applying, enhancing and repeating complex science can now be managed dynamically, delivering modularity and scale. Having the ability to build and process on demand is becoming more and more important too.

Tell us a little bit about how the work of the technology services team helps clients win.

My team specifically supports, maintains, operates and renews the technology ecosystem to ensure our clients have access to the fastest, smartest customer data science to allow them to make informed business decisions, quickly and efficiently.

High availability of our services and platforms is critical to building a trusted relationship with clients, and is a key success measure that we monitor. There are aspects of the science we have developed for retailers and brands that is replicated in our own internal services and systems, for example improving the customer experience when engaging directly through the service desk. Embedding machine learning and chatbots to optimise our own systems, powered by data-driven science is hugely impactful – it helps to streamline processes, deliver fast first fixes, and helps to predict issues in order to remedy them using incident clustering and links to change.

What are your retail technology / infrastructure trend predictions for the next 12 months?

Legacy technology and the housing thereof will continue to be a thorny issue for businesses to wrestle with. To cloud or not to cloud, to go all in or not, how fast to make the move – the debate will continue to challenge not just retail, but many industries as they refresh their IT infrastructure.

On a positive note, technology and infrastructure developments will create greater improvements in the day-to-day working life of employees. It is already providing greater flexibility, powering smarter ways of working, and delivering optimised workflow processes.  My prediction is that it will elevate the employees’ experience to more closely match that of an online shopper.

In dunnhumby’s first Retailer Preference Index study conducted for the Australian grocery market,  we examined closely what drives Australian shoppers to choose their preferred grocery retailers. The report takes a snapshot of Customer preference for grocery retailers and explores the various levers retailers can pull to improve their rankings over time.

The Australian Grocery RPI applies a focused lens by looking at the five national Australian grocery retailers -- Woolworths, Coles, Aldi, IGA, and 7-Eleven -- based on how well they are meeting their Customer needs today.

The study included 1,500 individual respondents -- resulting in 3,900 unique retailer evaluations -- factoring age, state, and family composition. There are a number of ways the RPI can be used to develop effective grocery retail strategy. But our chief goal was to answer four core questions:

• What drives retailer preference among Australian shoppers?
• Which retailers are winning or losing?
• Why are they winning or losing?
• What can retailers do to improve emotional connection and financial performance?

The methodology in the RPI correlates a retailer’s preference driver scores (convenience and quality; easy shopping experience; price; operations; drive time) with their emotional connection with Customers (satisfaction; likelihood to recommend; trust; intensity of attachment) and financial performance (share of visits). By understanding what creates the strongest combination of financial performance and emotional connection with their Customers, Australian retailers can be better prepared to take on their competition in competing for Customers today.

For more information, download a free copy of the report. If your banner is in our report and you'd like your custom brief, contact us. 

The list of banners evaluated, in alphabetical order, include:

• Aldi
• Coles
• IGA
• Woolworths
• 7-Eleven

从1994年互联网接入中国，发展到2019年，已经整整25年。25年的时间，一个出生婴儿已经长大成人，意气风发并可以独步江湖了。

1999年是中国电商起步的一年，当时eBay和亚马逊仍是商业媒体的焦点，直至2008年以阿里巴巴和京东为代表的中国电商开始腾飞。谁能想到仅仅8年之后，中国的线上交易量就能够超过美国，并在此后3年仍保持强劲增势。eMarketer提供的一组数据中显示，中国零售市场到2020年网购交易额将达到2.5万亿美元，是美国的3.5倍，网购人数将占全世界线上交易人数的60%，但只占中国总人口的一半不到，中国的线上销售额将增长24%，增长速度冠绝全球。

2008年也是《自然》杂志专刊首次提出BigData概念的时候，随后的2年大数据逐步从成熟走向应用，一直到今天，学术界及企业界对于大数据应用研究的讨论火热依旧，渗透在商业、科技、医疗、政府、教育、经济、交通、物流及社会的各个领域。

那么2019年，数据科学在零售业领域面临哪些挑战和机遇呢？以下是我的一些观点。

零售供应链变革

零售业应用大数据和数据科学最直接的目的是帮助零售商实现精准营销，从而降低营销成本，扩大销售额，同时帮助厂商减少产品过剩。随着C2M（Customer to Manufactory）的时代来临，消费者将主导市场，从零售到制造，市场驱动力和驱动方向发生逆转，供应链的变革随之而来。在新的供应链模式到来之际，数据科学的应用会进一步深入。

如果营销是商家的脸，产品和运营是气质和才华，供应链就是经脉和血液。供应链模式变革会从本质上改变零售商和制造商的命运，这一方面包括通过供应链的结构优化来提升快速反应能力，另一方面是通过供应链的数字化来提升需求管理能力。

自动算法和机器学习自动化

在中国，电商的爆发式增长引发了一定的大数据热潮，如今电商巨头将触角伸向了线下零售，因此很多企业把数据科学作为技术投资的一个主要领域，数据量随之快速大幅度增长。

随着数据科学家拥有越来越多的数据和工具，自动算法和机器学习自动化将被用来探索更多假设，比如以前是人工凭经验去调整参数，这个过程比较繁琐，时间也很长，现在将通过机器学习的方法代替人调整参数。Gartner预测，到2020年，超过40％的数据科学任务将实现自动化，那将是所有人都能成为数据科学家的时候，数据洞察将在整个企业中得到更广泛的应用，

然而，实体零售业实现数字化的压力不小

线上零售相比实体零售具有一定优势，首先是比较容易获得数据，再加上有阿里巴巴、腾讯这些公司的一系列投资行为，线上在数据科学应用和覆盖面上相对来说比线下要好很多，同时也能更好地切入到运维中去。

如果线上零售的数字化程度是10分，那么线下零售可能只能打5分。线下零售的问题很大程度上，一是因为数据本身很难收集到，各个零售商和品牌商各自有各自的数据，彼此之间很难去打通，二是有了这些数据，做完分析之后，很少能够呈现成运维的工具，比如消费者的洞察报告很难落实到执行层面。由于有很多因素不能被量化，使得部分数据在一开始做数据分析的时候就没有被带入进去，结果是报告存在没有被考虑的方面，最后报告的结论也不一定能够被执行。

换句话说，因为很多环节是由人来操作的，所以线下很多场景的数据不像电商那样，可以将所有消费者行为数据一五一十地记录在后台。

比如传统上做海报的选品，评估海报选品效果，用历史的记录迭代式地更新下一次选品性能提升，以前主要是人为操作，只是用IT的系统做辅助的数据记录，甚至一些地区门店在IT设置方面都不到位，基础的信息捕捉都没有，所以运维上的其他信息就更难获得。

人、货、场全链路数据洞察

从0到1，零售行业大数据整合应用全攻略一文中说到转型成为数据驱动的企业需要长远规划和坚定实施，就是说要转型成为数据驱动的企业在基础设施上需要加大投入，并且有很多需要变革和改进的地方，包括建立围绕人、货、场的消费者、产品、营销、渠道、物流等建立全面深度的数据体系。

“人”就是顾客洞察或者消费者洞察，包括从大数据形成基于顾客群的分类和顾客洞察，他们是谁？喜欢什么？购物的偏好是什么？网上社交媒体行为是怎么样的？这些数据量很大，通过机器学习的方法可以获得方方面面的顾客洞察，用来指导营销决策，甚至于形成将来一些新的趋势，帮助产品研发做前期的调研。虽然线上数据更多，但是如果只用线上数据会有偏颇，加入线下数据能够更完整地画出顾客画像。

“货”就是产品，包括通过销售数据和顾客数据，指导淘汰老品或者新品上市，产品的概念本身从何而来也可以通过大数据做调研，新品价格和定位、新品上市后做跟踪、新品表现、营销活动表现、营销策略的制定、媒介推广的不同媒体渠道哪个ROI效果最好，背后也可以有很多的数据科学做帮助。

比如当品牌商想做精准营销时，我们根据品牌商的目的去做人群的筛选，可以通过一些KPI指标将目标人群过滤出来，通过我们内部的一些算法标签知道具有哪些标签的用户当你给他做产品推广的时候，更容易接受优惠券。

我们的精准营销能力已经得到业界的认可，并在腾讯开发者大会上被当做经典案例被分享。目前已经服务过31家知名的品牌商，包括宝洁，玛氏，百威英博，可乐，美素佳儿，亿滋等等。

“场”可以是线上线下的各种消费场景。从中获得的各种数据，经过有效的整合、分析、应用能够帮助零售商和品牌商做出更正确的商业决策，提升顾客购物体验，增加企业运营效率。例如选品工具可以协助零供双方做到千店千面的货架陈列和品类管理；门店诊断工具，可以帮助零售商快速识别问题门店及其整改策略。

邓韩贝在全球范围内拥有30年零售行业经验，由于始终专注于零售业，我们从合作伙伴身上获得了很多行业特色的数据能力。我们涉及但不限于快消、金融服务、医药连锁行业的顾客洞察、顾客战略、定价与促销、品类管理及零供合作等各个方面。

与零售商和品牌商直接合作的方式，让我们有颗粒度最细的数据，在这个基础上我们用数据科学打标签，那么形成的洞察对于这个特定零售商体系内是最完整最精准的。

此外，我们可以基于顾客购买的真实数据提供数据产品和服务，这比通过采样得到的调研数据或二手三手数据更精准、更有效。

总结来说，数据价值存在很大的挖掘空间，有效使用数据能够帮助企业降低成本、增加收益、优化营销、预测未来，比如千人千面的广告是营销方面的数据科学应用。供应链方面的数据科学应用是新零售下一个要解决的问题，也就是怎么用更低的成本更快速地将产品交到消费手上。现在微软、亚马逊、阿里巴巴等大企业纷纷把能力放在各自的云服务上，当更多企业都能够接受把数据布局在云上，可以像水电煤气费一样简单地调用，AI的普及将会更快……

数据科学无论在学术领域还是应用领域的讨论从未间断，多元化全渠道的趋势给行业带来更多挑战和机会，未来数据科学的探索领域也会不断扩大。

原文最先刊载于邓韩贝官方微信公众号：邓韩贝dunnhumby（ID: dunnhumby-China），扫描下方二维码关注我们，获得更多精彩。

There is an age-old debate in retail which pits two diametrically opposed ideas against each other: on the one hand, the idea that offering a wide choice of products enables customers to find something that meets their specific needs. On the other hand, too much choice leads to clutter, complexity and overall a painful shopping experience. How do retailers find the right balance to provide a good shopping experience?

Shopping as self-expression

The arguments for the first position – call it the “individualisation argument” – start from the assumption that different customers, generally all being different from each other in various ways, would benefit from a more tailored solution to their specific problem. One customer has sensitive teeth, another wants fresh breath; one would like 2 servings, another 4 servings; and so on. In this scenario, more choice offers advantages for some and few if any disadvantages for others. The more options there are, the more likely you are to find a product with the right combination of attributes to suit your taste and budget.

Choice also encourages innovation and experimentation which would seem to be a long-term benefit for consumers. Ultimately until you try something, you don’t know if you’re going to like it. Through a recent study we know that consumers go through periods of “exploration” followed by long periods of “exploiting” their preferred option. Without sufficient choice, a customer’s opportunities to explore (and hence find a product that they prefer) are much curtailed.

Choice can also be regarded as enabling self-expression, which is a fundamental value in Western democracies. The idea is that the choices a consumer makes can create an identity for themselves which represents their own unique qualities and personal brand. In an age when people are urged above all to “be yourself”, it becomes almost a moral imperative for retailers to offer customers choices and ways to “stand out from the crowd” or at least validate their personal identities.

Decision paralysis and the paradox of choice

Despite these strong arguments, the idea of a “paradox of choice” – that too much choice can be a bad thing – remains relevant and still carries a lot of weight with brands, retailers, and even customers themselves. 

First, there is the obvious point that too many options can delay the customer finding the product they are looking for or indeed any product which would approximately meet their basic need. Having to scan hundreds of French cheeses in the supermarket before finding any Cheddar does not feel very customer-centric.

A subtler argument suggests that presenting too much choice accentuates various cognitive biases such as “buyer’s remorse” that a customer may experience while making a purchase.  The thinking here is that too many options prevent the customer from feeling entirely satisfied with their final choice as it probably involved some trade-offs (such as price vs convenience) which are likely to require an unreasonable amount of brain power in a busy shopping environment where shoppers are looking to shop quickly and efficiently.  

There is potentially a vicious circle where the more options, the more the customer’s brain is literally overloaded with information, more stress is created, the more customers will look to take short cuts and end up making a sub-optimal decision. One famous study published in 2000 by psychologists Sheena Iyengar and Mark Lepper discovered that customers offered 24 different types of jam were less likely to make a purchase than those offered only 6 types. In this case customers who faced greater choice were presumably driven into a kind of “decision paralysis” where making no purchase seems like the safer option.

Finally, there is the argument that beyond a certain point, choice becomes essentially vacuous. In some cases, the customer is presented with the appearance of choice but in fact many of the so-called choices are the same basic product only with a different name or wrapper. There is a memorable scene from The Simpsons showing an extreme example of this, where Homer visits the ‘Duff’ beer Factory and is shown seemingly three distinct flavours of Duff beer all supplied by the same pipe.

The worry here is that choices are being invented to “fool” the customer into thinking there is something new to explore or there is a “light” or “healthy” or “max” version of something which could bring added benefits (but the differences are imperceptible). Furthermore, such tactics are sometimes considered a conspiracy on the part of brands to increase shelf space for their products (at the expense of other brands) by artificially inflating their product count to improve their bargaining position for space.

Are customers facing information overload?

So, the Individualizer argues that greater product choice promotes freedom, self-expression, and customer self-actualisation. The more cynical consumer psychologist would claim that all these products are effectively the same, probably coming from the same factory, and making customers wade through dozens of artificial alternatives is frustrating and time-consuming for no real benefit.

The problem with the cynical argument is that it portrays the retail shopping experience as being fundamentally a challenging and stressful environment from which the customer’s job is to “escape” with a product that mostly meets their needs.

Using metaphors like the customer being “bombarded” with information reinforces the impression the customer is a victim of merchandising and promotional tactics and their only real choice is either to succumb to a blitz of competing product claims or opt-out altogether and make no purchase.

In fact, simply posing the problem as a question of what will induce the customer to make a purchase? (any purchase) already presents the customer as being at the limit of their stress tolerance, instead of a willing and active forager for information.

So, what can retailers do to make it easier for the customer to find the information necessary to make the right decision for their circumstances?

One key area is improving the flow of products in a category so that instead of being presented with 100+ alternatives all at once, the customer is presented with 5-6 binary options which together whittle down the consideration set to just a handful. This can reduce the risk of “decision fatigue” for the customer while subtly guiding them towards the product which is most likely to be right for them.

Personalised recommendations are also incredibly powerful whether in direct marketing or from a “digital assistant” who might pop up during an online shopping trip. Home Depot in the US have taken this a step further by providing a map and an in-store product location in their app such that a customer can cut through the “noise” of a vast in-store assortment and quickly locate the product they want. Imagine if your phone were to bleep or flash as you got closer to the product, or even when you walked past a promotion that an algorithm thought could be interesting to you, providing you a personalised recommendation in real time. Suddenly it feels as if the whole store is transformed into a “personalised experience”.

Perhaps most important of all is to provide choices that will truly resonate with customers. That means avoiding false dichotomies and hyped-up claims and instead investing in developing alternatives that a customer would recognise and respond to. Some of the questions a brand might consider are: Which segment does the customer belong to and what are their wider lifestyle needs? What dietary requirements do they have? Which product attributes do customers consider most important? Which products do customers consider substitutable with each other?

Neither should brands be ashamed of selling a vision as much as a reality. The cynic who argues from the fact that one toothpaste produces similar results to another that therefore most product variety is redundant, is essentially trying to reduce the customer experience to the lowest common denominator. Retaining the possibility for the customer to learn something, be inspired, or feel like they got a great deal is an essential first step for retailers and brands to delight shoppers and exceed their expectations every time they get chosen.  

Understanding what drives Customer preference in grocery retail and how emotional connection links to financial performance is key to competing in the battle for Customer loyalty and spend.

Dunnhumby’s  Australian Grocery RPI applies a focused lens on Customer preference by looking at the five national Australian grocery retailers -- Woolworths, Coles, Aldi, IGA, and 7-Eleven -- based on how well they are meeting their Customer needs today.

Here are a few key takeaways:

For more information, download a free copy of the report. If your banner is in our report and you'd like your custom brief, contact us. 

The list of banners evaluated, in alphabetical order, include:

• Aldi
• Coles
• IGA
• Woolworths
• 7-Eleven

Since 1989 dunnhumby has been analysing Customer behaviour to help retailers prepare for the future. We've witnessed some enormous changes in the retail industry over the past 30 years, from what people eat, to how they shop. So what's on the horizon for the future of customer experience?

David Clements, dunnhumby’s Global Head of Retail, shares his views on the trends, challenges and opportunities that retailers and consumers will be facing over the next 30 years in retail.