How To Make Data Science a Competitive Retail Advantage

Data has long been a part of retailers’ and brands’ businesses. But as data science continues to evolve and improve, companies can tap into data in new and better ways to ensure optimal margins at a time of squeezing market pressures.

Barbara Connors, VP of strategy and acceleration at Kroger’s data arm, 84.51°, emphasized the ways that data science can reveal important nuances of what works best to influence consumer behavior in a market defined by macro influencers like inflation, COVID and hybrid shopping. “There is an increased emphasis on a couple of things,” Connors told Progressive Grocer in a recent interview. “First, there is the democratization of insights. It’s about taking insights out of a constrained, contained team and into the business in a way that can be consumed by people with different levels of expertise in data and insights.” What this democratization of data can do, she said, is to engage more people in what insights mean and open up customer-centric innovation.

Another evolving area of influence regarding data is an increased focus on predictive analytics. “When you have a lot of uncertainty, you need levels of confidence based on true, granular data, and you can leverage advanced technology like predictive analytics to provide a competitive point of difference,” Connors explained.

As trending phrases like “predictive analytics” and “AI” are now realities, making them more widely available across the organization helps grocers and brands meet their shoppers’ needs, wherever they are. “Across the board, we hear that companies want to make data science a competitive advantage at their organization and transform their businesses, and there are different factors that are required to do that,” Connors pointed out.

Technical acumen is one of those factors, and cultural readiness another. “You have to have the right skills from a technical perspective and, from a cultural readiness standpoint, you have to have a business that’s willing to invest in the data, technology and teams, and also has a commitment to better connect the data science team with the business team. Aligning on the right priorities ensures that the needs of the business are translated appropriately and connect insights to action,” Connors said.

Of course, not all businesses have those two factors in play at the same time. “There are companies that have the cultural readiness but haven’t invested in the data and teams to do so. We call them ‘aspiring companies’ – they want to be sure they do it right, and that almost handcuffs them,” she noted.

On the flip side, there are tech-savvy companies that aren’t quite there yet culturally. “They brought in really technical hires and Ph.D.s, but are getting stuck on delivering the promise of ROI. The unlock for them is connecting to the business and having data embedded on the business teams,” Connors observed, noting that there are ways to help translate the languages of tech and business groups.

According to Connors, retailers and brands overall are getting closer to alignment and to using data science to its full potential as a function. Once there’s alignment, the next step is getting quality data and using a platform that doesn’t just offer point-and-click curated reporting, but also raw, aggregated data. To do that, 84.51° developed the Collaborative Cloud platform, which gives data scientists access to the shopping behavior of Kroger’s 60 million households with transaction-level granularity. “With the Collaborative Cloud, we have taken data fueling insights today and put it in a platform that is designed for data scientists in a platform that is also privacy compliant,” Connors said.

Having an infrastructure built around data and communication is crucial to the success of marrying these functions. “We get a lot of questions about creating an organizational design and setting up teams to communicate with each other,” noted Connors.

She added that in the wake of a fast-paced pandemic, supply chain shortages, labor challenges and inflation, companies may finally be able to step back from triage mode in the near future. “When things settle down, the strategy will be the foundation,” Connors asserted.

Serving 60 million households annually nationwide through a digital shopping experience, and almost 2,800 retail food stores under a variety of banner names, Cincinnati-based Kroger is No. 4 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.