GROCERY CX Driving loyalty in a disloyal market In association with AT A GLANCE CONTENTS he concept of good customer experience is nothing new CHAPTER 1: and cannot be judged on just one factor, such as exemplary In-store experience: what customers want from customer service or a smooth user journey online. Customer grocery stores experience, or CX, is more expansive, with the Harvard CHAPTER 2: TBusiness Review neatly defining it in 2010 as the “sum-totality of Online experience: what makes or breaks how customers engage with your company and brand, not just in a ecommerce loyalty? snapshot in time, but throughout the entire arc of being a customer”. Although that was nine years ago, the definition still stands. CHAPTER 3: And for grocers the pressure to deliver is acute – people shop more Taking CX up a level: future trends for keeping frequently at supermarkets than any other retail business, and customers happy competition is incredibly fierce. On top of that, omnichannel grocery shopping means there are more ways than ever for customers to engage with a retailer and experience either good, satisfactory or bad CX. From easily parking in the supermarket car park to finding every item on a shopping list or receiving a food delivery at a specified time with no substitutions – these all factor into how customers perceive a retailer. And intertwined into CX is loyalty and a customer’s likelihood to choose one grocer over another. To better understand what customers want from a food shopping experience, Retail Week partnered with dunnhumby to conduct an exclusive survey of 2,000 UK consumers about their in-store and online retail grocery experiences. The report identifies the top criteria for customer satisfaction, how each major retailer is measuring up and the key actions retailers must take if they are to improve their customer experience both online and offline. We then, crucially, examine how all this feeds into growing market share in the most competitive of retail markets. METHODOLOGY In March 2019, we surveyed 2,000 UK consumers with an equal split across gender and in-store and online grocery shoppers. Consumers were asked how important different factors were to them when it comes to the in-store or online shopping experience. They then ranked how well their usual grocer(s) delivers on these using a scale of one to 10, with the highest being ‘does this well’. Unless indicated, the rankings in this report are based on combining the volume of respondents who scored retailers with a nine or a 10. RETAIL WEEK CONNECT: GROCERY CX Commercial Director Acting Head of Commercial Acting Commercial Imogen Jones Content Operations Production Editor 020 3033 2969 Abigail O’Sullivan Rebecca Dyer [email protected] 020 3033 2940 020 3033 2806 abigail.o’[email protected] [email protected] Contributors: Helen Berry, Rose Bundock and Rachel Horner 2 | May 2019 In association with DUNNHUMBY VIEWPOINT GUILLAUME BACUVIER CHIEF EXECUTIVE, DUNNHUMBY rocery retailers can employ a The survey also indicated some wide range of tactics to remain distinctions between emotional and competitive in today’s turbulent behavioural loyalty. Respondents rated Becoming more market. However, resources are ‘shopping with a retailer that offers a loyalty Customer-centric is Gfinite and it’s important to know where to scheme’ as being more important than prioritise investment. ‘feeling loyal’ towards a retailer. a transformation that During 30 years of partnering with Two-thirds of respondents with a Tesco retailers and brands across the globe to help Clubcard claimed they would be more likely to requires the buy-in and them become ‘Customer-First’, we have shop in store with Tesco. While grocery loyalty observed that the companies that truly programmes have been around for years, support of everyone understand the wants and needs of their they may be more important than ever in the in the organisation Customers – and focus on meeting these marketplace of today. The key is developing needs – are those that succeed in generating a loyalty offering that Customers value. sustainable growth. This study reveals what It’s clear that data is now integral to is most important for UK grocery shoppers understanding and meeting Customers’ and how well they think their usual store needs. Smarter application of data can help performs in these areas. retailers put the Customer at the centre of The findings highlight the importance their decision-making, improving the online of getting the basics right: Customers and in-store experience and creating deeper expect freshness, a good range of products connections with shoppers. and value for money as standard. A strong Becoming more Customer-centric isn’t online offering is also critical, as Customers quick or easy; it’s a transformation that increasingly shop both in store and online requires the buy-in and support of everyone and expect a convenient, personalised in the organisation. However, retailers with experience across all touchpoints. a solid Customer-First strategy will be better Customers reported feeling ‘most loyal positioned against competitors in the long to’ M&S and Waitrose in store, while Ocado run by delivering what their Customers want. and Tesco generated the strongest feelings of In dunnhumby, we capitalise ‘Customer’. loyalty for the online shopping experience This shows the emphasis we place on the they provide. Customer and being Customer-First, always. DUNNHUMBY: THE WORLD’S FIRST CUSTOMER DATA SCIENCE PLATFORM dunnhumby is the global leader in Customer data science, empowering businesses everywhere to compete and thrive in the modern, data-driven economy. We always put the Customer first. Our mission: to enable businesses to grow and reimagine themselves by becoming advocates and champions for their Customers. With a deep heritage and expertise in retail – one of the world’s most competitive markets, with a deluge of multi-dimensional data – dunnhumby enables businesses all over the world, across industries, to be Customer-First. The dunnhumby Customer Science Platform is our unique mix of technology, software and consulting, enabling businesses to increase revenue and profits by delivering exceptional experiences for their Customers – in store, offline and online. dunnhumby employs over 2,000 experts in offices throughout Europe, Asia, Africa and the Americas, working for transformative, iconic brands such as Tesco, Coca-Cola, Meijer, Procter & Gamble, Raley’s, L’Oréal and Monoprix. Learn more at dunnhumby.com In association with May 2019 | 3 SURVEY SNAPSHOT IN STORE A BIG WEEKLY SHOP (1-2 PER WEEK) WAS THE MOST POPULAR FREQUENCY OF IN-STORE SHOPPING FOR RESPONDENTS, FOLLOWED BY LESS OFTEN THAN ONCE A WEEK 5 MOST IMPORTANT EXPERIENCES OF IN-STORE GROCERY SHOPPING 1 2 3 4 5 GOOD VALUE BEST REALLY FRESH A CLEAN ALWAYS HAS FOR MONEY PRICES PRODUCE STORE ITEMS IN STOCK 5 LEAST IMPORTANT EXPERIENCES OF IN-STORE GROCERY SHOPPING 1 2 3 4 5 BABY MONEY COFFEE CLICK-AND- HELP WITH LARGE CHANGE EXCHANGE SHOP COLLECT OR HEAVY ITEMS HOW DO RESPONDENTS LIKE TO CHECK OUT WHEN IN STORE? 39% 23% VALUE READILY RANK THE AVAILABILITY AVAILABLE MANNED OF SELF-SCAN CHECKOUTS CHECKOUTS AS IMPORTANT TO THEM 4 | May 2019 In association with IN STORE GROCERS COMMANDING THE MOST LOYALTY* SATISFACTION** M&S 72% ALDI 45% WAITROSE 70% M&S 45% ICELAND 69% LIDL 45% MORRISONS 61% ASDA 44% SAINSBURY’S 61% WAITROSE 43% *This ranking was calculated by combining the percentage of respondents who feel ‘quite loyal’ or ‘very loyal’ to the grocer **This ranking was calculated by combining the volume of respondents who rated the retailer with nine or 10 (very satisfied) ONLINE PRICE PERCEPTION OF ONLINE RETAILERS TESCO TOPS THE BIG FOUR FOR THE MOST ONLINE SHOPPERS ICELAND ASDA WAITROSE M&S WHO FEEL VERY LOYAL 5 LEAST IMPORTANT EXPERIENCES OF IN-STORE GROCERY SHOPPING TOWARDS IT VERY CHEAP VERY EXPENSIVE 5 MOST IMPORTANT EXPERIENCES OF ONLINE GROCERY SHOPPING 1 2 3 4 5 DELIVERY GOOD VALUE DELIVERY CHOICES ALWAYS HAS REALLY FRESH IS ON TIME FOR MONEY TO SUIT ME ITEMS IN STOCK PRODUCE 5 LEAST IMPORTANT EXPERIENCES OF ONLINE GROCERY SHOPPING 1 2 3 4 5 ONLINE CHAT EDITORIAL PRODUCT COMMUNICATES ATTRACTIVE CONTENT PROVENANCE WELL WEBSITE May 2019 | 5 CHAPTER 1: IN-STORE EXPERIENCE What customers want from grocery stores rocery is known as the most over things like multi-buy deals, and are intensely competitive retail sector reluctant to buy more than they need. of them all; barely a year goes by Consumers view value as going hand-in- without talk of a hyped-up price glove with low prices, with a third of survey Gwar. And no wonder, given our survey respondents saying that a grocer offering a results, which show value for money (63%) good range of basic own-brand products is and best prices (58%) are the most important important to them. factors when it comes to shopping in store. However, a valued own-label offering may Notably, a grocer having the best not be enough to stop shoppers switching to promotions is ranked 10th, suggesting discounters, which our research shows rank that consumers value everyday low prices well for price, value and quality. GROCERS RANKED ON 10 MOST IMPORTANT TOP 10 FACTORS OF IN-STORE EXPERIENCE 1 2 3 4 5 6 7 8 9 10 1. GOOD VALUE Lidl Aldi Asda Morrisons Iceland Tesco Sainsbury’s M&S Waitrose Co-op FOR MONEY 2. BEST PRICES Aldi Lidl Iceland Asda Tesco Morrisons Sainsbury’s M&S Waitrose Co-op 3. REALLY M&S / Tesco / Morrisons Aldi Lidl Sainsbury’s Iceland – – – FRESH PRODUCE Waitrose Co-op / Asda 4. A CLEAN M&S Aldi Waitrose Sainsbury’s Asda Morrisons Lidl Iceland Tesco Co-op STORE 5.