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At its core, food retailing is about giving consumers what they want, and retailers who effectively leverage what is commonly known as Big Data can drill down far enough to give their shoppers a truly personalized experience.

That was the broad takeaway of the Monday morning sessions at the Food Marketing Institute’s 2014 Midwinter Conference at The Phoenician in Scottsdale, Ariz., which also addressed how to best focus on the mountain of consumer data out there, as well as the perils of cyber security.

Following a presentation by author Charles Wheelan, who took on the challenge of separating the trivial minutiae from truly relevant consumer statistics, a panel of retail and CPG companies – moderated by Wendy Liebman, president of WSL Strategic Retail – discussed their views on how proper application of Big Data can enhance the consumer experience across the food industry.

Safeway is among the big grocery players that has effectively used Big Data to “get to know and connect with the shopper,” said Keith Colbourn, Safeway’s SVP of loyalty and analytics. “For the last three to four years, digital technology has really allowed us to communicate with shoppers.”

Colbourn said Safeway uses data it collects on 30 million shoppers in its weekly promotions, a strength that expedites the retailer’s “ability to connect with them on the go.” Significant is the growth of “pre-shopping” among smartphone users who can “clip” coupons and otherwise surf the web for deals from practically anywhere at any time.

Meanwhile, at candy giant Hershey, consumer insights “are the heart of everything we do,” said Michele Buck, president of Hershey’s North American operations. Most significant for Hershey is “working with retailers to maximize store layout for incremental revenue,” Buck said. Data mining has helped the company and its partners to optimize product placement for shopper flow, she said.

“We believe some of the biggest future opportunities are in precision at a store level – not just couponing but optimizing assortment at store level,” Buck said. “It’s going to be critical to get that in-store efficiency.”

All panelists agreed that it’s important to stay focused or the enormity of Big Data can overwhelm. Of particular import, according to Nielsen Analytics EVP Dennis Moore, is to focus on the question you want answered.

Dina Howell, worldwide CEO of Saatchi & Saatchi X, focused her presentation on the emotion that surrounds Big Data and which often makes consumer reactions hard to predict despite volumes of available statistics. She cited as examples the backlashes against New Coke, Tropicana’s packaging change and, more recently, General Mills’ featuring of an interracial couple in a TV spot for Cheerios.

Yet emotion is significant in attracting the attention of shoppers who commonly spend mere seconds at the shelf. The three key factors in tapping consumer emotion is to know the retailer, know the brand and know the shopper.

Cyber Security

With the mass proliferation of data also comes great risk, as evidenced by the recent Target data breach and other similar hacking incidents. Robert Mueller III, former FBI director under presidents George W. Bush and Barack Obama, asserted that cyber attacks will eventually overtake terrorism as the top threat to national security.

At the retail level, major players have taken steps to protect their shoppers’ data and, most importantly, impart a feeling of comfort and trust among them, so expressed a panel moderated by Theresa Payton, former White House chief information officer and president/CEO of Fortalice LLC.

Brian Lawhorn, who heads up corporate information security for The Kroger Co., said companies need to “follow the data flow” to guard against breaches.

Donna Tweeten, Hy-Vee’s VP of marketing and communication, considers the shopper relationship a sacred trust, and said customers “appreciate they have to share information to customize their experience.” Yet, she noted, retailers “have to understand what people see as personal and confidential,” citing a study in which many consumers said they’d share a credit card number before they’d reveal for whom they’d voted in a presidential election.

“Customers are expecting us to be transparent, responsible and accountable,” Tweeten said.

As a way to raise awareness of cyber security, Lawhorn said he once deliberately sent spam e-mails he created to top brass at Kroger to see how many would click on the enclosed links; he said the exercise paid off and executives now more routinely consult him when receiving what they suspect are bogus messages.

Scott Cousins, CIO for KeHe, said retailers need to ask their personal, “Who owns security? You’d hope the answer is, ‘We all do.’”

Indies’ Edge

The lunchtime sessions for independent operators focused on a look to the future and the importance of meal solutions for retailers.

FMI’s Sue Borra fielded input from the audience on how they vision the next decade for business.

The biggest changes in retail grocery over the next 10 years? Answers included more urbanization, technology, retail dietitians engaging shoppers, more finished items and fewer ingredients.

How will the profile of the average grocery shopper change over the next 10 years? Older, more singles, flavor driven vs. demographics, ethnic diversity and more tech savvy.

How will technology affect the consumer experience? Time saver, customized products, home delivery, more transparency.

Biggest concern for the future of the industry? Trust, proliferation of new formats, maintaining a passion for the work.

Borra said FMI is betting that “being human” and connecting with people will drive the shopping experience, and stores will increasingly become vibrant community hubs that will offer an “energetic and approachable” environment.

Sabina Saksena, advisory managing director at Pricewaterhousecoopers, identified growing retail niches: millennial moms, “man aisles,” ethnic shoppers, naturals shoppers and mini-meals shoppers.

The latter tied in to data presented by Dave Donnan, a partner with A.T. Kearney Inc., who asserted that retail meal solutions continue to present a profitable opportunity for grocers.

As sales have dropped in segments such as carbonated soft drinks, frozen dinners and fast-casual restaurant dining, they’ve risen for deli and ready meals, opening the door wider for grocers with full-service deli/prepared food departments, which Donnan said should be a “strategic priority.”

Quick-service restaurants have been losing share to grocery stores, yet many grocers still face the challenge of an image of having unappetizing packaging and inconvenience, Donnan said. Yet restaurants are vulnerable because so many grocers – like Mariano’s, Bristol Farms and Dorothy Lane – have upped the game in prepared foods.