Dive Brief:
- Amazon outranks all other retailers in terms of its ability to provide personalized experiences for shoppers, according to a report published Tuesday by data analysis firm Dunnhumby.
- The report, which draws on data from Dunnhumby’s Retailer Preference Index, found that a retailer’s ability to provide targeted savings, offer local products and deliver a frictionless shopping experience were the top three drivers of how consumers perceived its approach to personalization.
- Grocers with higher personalization scores tend to generate more customer visits, bigger baskets and a larger share of people’s wallets, Dunnhumby noted.
Dive Insight:
Personalization has emerged as a top priority for consumers as they continue to place a premium on value when purchasing groceries, a trend that offers an opportunity for retailers to improve their standing with shoppers by demonstrating their ability to cater to people’s individual needs, according to Dunnhumby.
Amazon muscled its way to the top of the list in large part because of its unmatched expertise in customizing the shopping experience for people, Dunnhumby said. That dominance helped it overcome below-average rankings in terms of delivering targeted savings and a local assortment of goods.
H-E-B won the No. 2 spot on the list because of its ability to offer a frictionless experience — which Dunnhumby said includes providing reminders to shoppers and making digital shopping easy — as well as an expansive local selection of products.
Meanwhile, Kroger, Giant Eagle, Kroger-owned King Soopers and Meijer, which came next in the rankings in that order, won accolades from consumers by performing well across the top personalization drivers.
The Giant Company and Target, as well as Fry’s and Smith’s — both of which are run by Kroger — rounded out the top 10 retailers on Dunnhumby’s list.
Dunnhumby’s personalization rankings are based on data it collected from about 10,000 grocery shoppers and includes 65 of the largest grocers that sell everyday food items and household goods.
Amazon, H-E-B and Target, along with ShopRite, were the only banners to score in the top quartile of the personalization list as well as among the highest 25% of retailers in Dunnhumby’s overall 2022 Retail Preference Index, released in January.
Dunnhumby found that a retailer’s targeted savings capabilities were responsible for 45% of its personalization score. The research determined that Smith’s, Winn-Dixie, Kroger, Fry’s and Giant Eagle were the best among the retailers on the list when judged by that measure alone.
Shoppers indicated that H-E-B, Big Y, Wegmans, Food City and Schnucks offer the best local assortment, while Amazon, Target, H-E-B, CVS and Walgreens provided the strongest frictionless shopping experience, according to Dunnhumby.
Dunnhumby observed that Costco, which placed second in its overall 2022 Retailer Preference Index, was among the laggards in the personalization rankings, attributing that dichotomy to the fact that the club retailer places a heavy emphasis on costs and geographic expansion, but has paid relatively little attention to personalization.
As they look to grow, club retailers and discounters could benefit from investing in the ability to offer shoppers customized experiences as well as positioning themselves as providers of low-cost goods, Dunnhumby said in the report.
