Getting Smarter

Gathering and using food retailing intelligence has become one of the keys to successful store and transportation operations.

Just as government intelligence has moved far beyond the phone in Maxwell Smart's shoe, so has supermarket intelligence become more than just going down the street to check competitors' prices.

"Traditional grocers are facing unprecedented competition from online, drugstore chains, mega retailers, local farmers markets and specialty food stores," says Diana McHenry, director of global retail product marketing at Cary, N.C.-based SAS.

McHenry says two things this competition can't copy are customer intelligence and executive intelligence. "Bringing in retail solutions that give you the power to know your customer and act on this information for the purpose of creating localized assortments, unique and innovative store experiences, innovative sales programs, personalized offers at the retail moment of truth, etc., gives retailers back their competitive edge," she says.

Franklin Rios, president of Denver-based Luminar, which specializes in Hispanic consumer intelligence, adds: "Having lower prices or better products is no longer a reason for consumers to shop at a store. They are going to look for cues at the retailer that resonate and resemble their lifestyle."

And according to Mike McMahon, president of Monroe, Conn.-based shopper intel provider Spire LLC, "Shopper intelligence provides a single foundation from which to align a supermarket's initiatives across all operating areas of the business. From planning and promotion to transportation to strategic marketing, a retailer firmly grounded in shopper intelligence will activate in ways more relevant to the consumer."

How has intelligence evolved to become such a critical component of today's food retailing landscape?

"Intelligence in the past meant buying smart to get the best deals, moving smart to reduce supply chain costs, and replenishing smart to cut waste and inventory," says Allan Davies, chief marketing officer at Aldata in Palo Alto, Calif. "All these are still needed, but now the evolution — or, in fact, revolution — in intelligence is being driven by shopper behavior change, and it's accelerating."

Ron Paul, president of Chicago-based Technomics, feels that better intelligence handling, coupled with information through shopper loyalty cards, and the capacity to warehouse and mine it, have led to the prominence of today's intelligence.

McHenry says the grocery industry has long had the predictive analytics and data to better inform retail decisions, but now, with the advent of high-performance computing capabilities, there are intelligence solutions to empower retail executives, managers and store associates to use the power of data on the front lines and in setting strategy. "Computing advances, reduced hardware costs and better-informed customers have all driven adoption by retailers," she adds.

McMahon notes that the path of shopper intelligence started with the introduction of the loyalty card. "However, in the early years, many retailers weren't sure how to harness the power of the data captured with the card and relied on sales data and market level data to develop insights into their business," he says.

Over the last five to 10 years, McMahon continues, retailers have been working diligently to maintain and improve the integrity of their shopper card data, mine it for useful insights and segment it in meaningful and actionable ways. "The data and insights become intelligent when they are scaled appropriately and integrated into the right systems and processes to allow for continuous and impactful activation across marketing, merchandising and operations," he stresses.

Just as food retailers vary, so do intelligence-handling organizations. As mentioned, Luminar specializes in Hispanic consumer intelligence, using Big Data analytics, which Rios says uses no sample data in analysis, but derives its business intelligence from empirical analysis to solve what he calls "business pain points."

He says Luminar has aggregated 13 million Latinos into its Big Data environment from more than 2,000 different data sources and 1,600 data characteristics. "By applying proprietary cultural filters, we identify Hispanic behaviors based on consumption patterns," he continues. "We then overlay this data with our customers' data files to develop an unprecedented level of insight that empowers retailers and their bottom line."

Fine-tuning Transport

Qualcomm Enterprise Services in San Diego, Calif., provides critical fleet telematics solutions and mobile applications that deliver real-time updates regarding the location and status of food deliveries, according to director of market intelligence Monica Wyly.

"Our mobile computing platforms (MPC) help organizations monitor and manage fleets' safety and regulatory compliance, as well as realize operation benefits through improved fuel management and increased transportation efficiencies," she says.

Meanwhile, Spire provides its retail partners with shopper intelligence solutions in the areas of segmentation, shopper analytics, vendor collaboration through shopper insights, and shopper marketing activation. McMahon says that many of his company's shopper intelligence efforts are geared toward informing loyal shopper marketing programs — identifying the most important customers through Spire's proprietary segment approach, developing shopper communications and offers that are highly relevant, then measuring the results with an eye toward continuous improvement.

McHenry says SAS for Retail is used by 600 retailers worldwide, including Walmart and Target, and helps grocers with a host of issues, among them: shopper insight, promotion optimization, assortment optimization, price optimization, demand forecasting, inventory optimization, space optimization, marketing resource management, campaign management, marketing optimization, market basket analysis, enterprise forecasting, workforce optimization, social media analytics, visual analytics, high-performance analytics, transportation optimization, and text and data mining.

Davies says Aldata provides its customers with an Omni-Shopper strategy to better manage the demands and expectation of shopper behavior change. "This starts with shopper and store segmentation based on basket analysis and using that intelligence to define targeted marketing, promotions and assortment," he explains. "We then provide out-of-store and in-store location-based services for message delivery, and to deliver tactical assortments to correctly fit store and shelf space."

Technomics' plays a "modest role," Paul says, spending most of its time identifying consumer trends anywhere from six months to six years in the future. "We deal with qualitative issues rather than pure numbers," he says. "We don't work in the supply chain. Our focus falls generally into marketing."

These intelligence organizations deliver different information, certainly, but all are aimed directly at the bottom line — a smarter bottom line.

"The evolution — or, in fact, revolution — in intelligence is being driven by shopper behavior change, and it's accelerating."

— Allan Davies, Aldata