What 2019 Will Bring in Grocery Retail: A Q&A with Nielsen's New CEO

Randy Hofbauer
Digital and Technology Editor
What 2019 Will Bring in Grocery Retail: Q&A with Nielsen's New CEO
David Kenny

The grocery industry is far from boring, and 2018 offered definitive proof of that reality – from grocers' expansion of automation and robotics to their increasing leverage data to better target shoppers and their needs.

And speaking of data, to finish up the year, Chicago-based market research firm Nielsen named a major data expert, David Kenny, its CEO. Before joining the company, he served as VP of IBM's Watson & Cloud platform, as well as CEO of The Weather Company, which IBM acquired under his leadership. Under his leadership, Nielsen hopes to transform into a more technology-focused company that is fueled by data.

Progressive Grocer sat down with Kenny to talk grocery – what fascinated him in 2018, what he expects in 2019, and what grocers must do to survive growing forward. He also shared insights on what he sees as the future for the company he now helms.

Progressive Grocer: Retail altogether is changing, but we're seeing grocery, long the laggard, stepping up its game in an increasingly omnichannel world. Share with us what you see as some top happenings in grocery retail in the past year, and what made them so interesting.

David Kenny: The accelerated rate of change in the industry has been incredible, and it is exciting to see how many retailers have stepped up to the challenge. But, speed without a purpose is chaos. Instead, I’m a big believer in velocity, because velocity is speed toward a purpose. This past year, grocery retailers moved at lighting speed – took risks, displayed a bold willingness to quickly adopt new technologies, challenged the status quo and made changes that rocked the industry at its core – ultimately achieving great momentum and velocity towards a more tech and AI (artificial intelligence) -driven retail future.

In 2018, the race to win omnichannel also hit a fever pitch. Many grocers made investments in brick-and-mortar stores while also accelerating their entrance into ecommerce. And while many took a tech-first approach to online grocery, it was clear that the in-store experience is just as important as anything built online.

Lock step with the grocery industry’s digital transformation, in 2018, grocers (finally) embraced AI and machine learning in a more meaningful way. However, in my experience, machine learning and AI technology is only as good (or not) as the data behind it. A key element to useful data is labeling – something that I know Nielsen has mastered. Detailed, verified labeling means that data is more easily adapted to machine learning and AI, which, to me, is key for grocery retail’s continued evolution.  So, retailers, take note: The next wave of innovation will be driven by better data that can activate the full potential of AI.

Progressive Grocer: What are three or four main areas you see transforming in 2019 in the business of grocery retail, and how will they transform?

Kenny: As AI continues to unfold and advance the grocery retail industry, I believe that an AI-driven, data strategy will increasingly become a default setting for retailers and FMCG manufacturers – with AI and machine learning unlocking even more value. And while we have over 1,000 data scientists who solve our clients’ thorniest problems, retailers looking to get ahead in 2019 should also be looking to develop their own understanding of this technology, too. Working together can make that happen, faster.

Another transformation on the horizon is the deconstruction of walled gardens. In 2018, grocery retailers and manufacturers didn’t get the most out of their data due to disconnected systems. This is a critical element that will certainly need to change in 2019. For both the U.S. grocery retail and FMCG manufacturing industry, open platforms for smarter, faster activation of data and insights will become the clear path to success. History tells us that walled gardens, companies that try to go it alone, tend to fail if they don’t change to an open policy where they embrace the community in which they operate. With so many third party data sets available, no one company will ever be in a position to provide all the data assets that are needed to be successful. And that’s okay. Open platforms, set in cloud marketplaces, with clear data, enables previously disparate data sets to be shared, integrated and activated. This is a game changer and it’s here.

The omnichannel landscape will continue to transform in 2019.  For retailers, a holistic view of the omnichannel business landscape will be a crucial navigational tool to see market volume and share across online and offline, emerging trends and gaining full visibility into changes in buyer behavior to inform strategic decisions.   

Finally, for grocery retailers, more success will come from gaining greater access to the lives of the consumers they serve, through data - in, of course, a safe and secure manner. However, at no other point in history has the consumer been more aware, curious and concerned about how data about them is being captured and used. Therefore, I strongly believe that with data comes huge responsibilities - to protect the consumer, the marketing ecosystem and to manage it all with integrity and transparency.

Progressive Grocer: What is key for grocery retailers to survive in this changing world?

Kenny: For too long, companies have been stuck in a mode of managing data versus creating a data strategy.  To move forward, data should be treated as an enterprise asset. This is a new concept for the retail and consumer product landscape – and one that is being driven by Nielsen.

Quality data will continue to be key.  Nielsen’s commitment to high-quality, science-backed data is an essential service to the marketplace. The ability to provide useful data, independent of bias towards buyer or seller, will only become more crucial to the marketplace.  When we marry gold standard consumer panel data with tracking and behavioral data and any number of other big, context-building data sets, and then apply a unique mix of human and machine analysis, with real data scientists and algorithms, great decisions become much easier.

Lastly, collaboration is an important word for us - and a mindset that we hope we can continue to spread across the industry. It’s our priority to make sure clients are maximizing their data assets, so through strategic alliances like the one we have with Microsoft, we are breaking down the silos of the status quo.

I believe that adopting a holistic data strategy will be the only way to win in FMCG and retail.

Progressive Grocer: You've served in top roles at several technology companies, including IBM and The Weather Company. Tell us about your experiences there and how you will bring those learnings to Nielsen to help transform it from a market research company to a technology and AI -first company.

Kenny: As co-founder, chairman and CEO of digital marketing agency Digitas, I gained a deep respect for Nielsen, its valuable contribution it brings to businesses and the trusted sense of truth they bring to the industry.  As chief executive of The Weather Company (which was acquired by IBM), president of cloud service provider Akamai and most recently, SVP of cognitive solutions at IBM, where I helped develop IBM Watson and lead the company’s cloud computing efforts, I had a front row seat into how machine learning and AI can truly transform the power of data from understanding what’s happening, to predicting the future.   It’s almost as if each of my work experiences have led me right to this place, at this time.

To me, as Nielsen expands the capabilities of its data through machine learning and AI, my past experiences sit squarely in the direction of where Nielsen is going.  The way that I see it, Nielsen is uniquely placed at the intersection of marketing data and technology - and it is technology that will drive the company forward.   It is a privilege to build on the 90 years of Nielsen history and I’m excited to lead the company as it prepares for the second century of Nielsen. Truly, there has never been a more important time to advance analytics and to have trusted measurement across the media and marketing landscape.

About the Author

Randy Hofbauer

Randy Hofbauer is the former digital and technology editor of Progressive Grocer. He has more than a decade of experience as a content strategist, researcher and marketer, almost all of it covering CPG retailing. His insights and work have been cited in a number of media outlets, including The New York Times, the Associated Press and the Chicago Tribune, and he was named a finalist in the Software & Information Industry Association's 2018 Emerging Leader Awards. Follow him on Twitter or connect with him on LinkedIn.

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