dunnhumby’s Global Partner Summit: five things we learned about driving loyalty and growth with localised assortment

For three days in October last year, we were treated to presentations from industry experts and thought leaders as part of dunnhumby’s Global Partner Summit (GPS). From the latest trends and developments through to innovative new ideas that retailers and brands can implement, GPS provided a wealth of insights and helpful advice.

In this series of articles, we’re bringing you the main takeaways from a range of those talks—giving you the chance to catch up even if you weren’t there in person.

In this post, we look at what dunnhumby’s Head of Category and Store Solutions—Andy Grady-Smith—had to say about driving loyalty and growth through localised assortment.

1. Personalisation drives sales
2. Specific assortments are important—but challenging
3. Customer expectations are growing
4. Customers want retailers to know them better
5. Specific data highlights key differences

 
#1 Personalisation drives sales

"More than ever before, customers are shopping around. Loyalty is not the norm anymore, so we need to pull shoppers back in—and personalisation is the key," Andy explained.

28% of a retailer’s share of wallet is driven by personalisation, he noted. As a result, creating a tailored assortment can have a big impact on customer behaviours. In practice, Andy went on to explain, that means being able to create more local, site-specific assortments.

 
#2 Specific assortments are important—but challenging

Localised or even store specific assortment can increase sales by 2-4%. But it’s not easy to achieve. "There are some really common challenges to creating more tailored assortments," said Andy. "I’ve spoken with a lot of retailers around the world and the same three challenges are widespread."

What are those challenges? The process takes too long due to multiple touchpoints across teams and conflicting priorities, he noted. Retailers often struggle with customer centricity (which is often diluted by the time an assortment reaches the shelf). And scalability is difficult—with the granular recommendations and creation of hundreds of space-aware, customer centric planogram variations typically being prohibitively expensive.

 
#3 Customer expectations are growing

"Customers coming into your store want to walk down the aisle and have it feel like it’s their aisle," continued Andy. "They want to see the products they want. Make them feel like it's their store, and you’ll make them want to keep coming back."

Two years ago, Gartner reported that customers now expect retailers to build assortments that are relevant and focused on their needs. Since then, customer expectations have continued to grow and—now more than ever—shoppers are really looking for localised assortments: 66% of customers believe retailers should now be able to understand their unique needs.

 
#4 Customers want retailers to know them better

64% of customers wish companies would respond faster to their changing needs. Additionally, 88% of customers say product variety is important to them when deciding which retailer to buy from.

How can retailers meet that demand? "The creation of space-aware planograms is critical," Andy pointed out. "You can’t do it by adding another 150 people to your team." More sophisticated planograms are crucial. And when it’s not possible to tailor each individual store, going store-specific, then clustering back up from store-specific recommendations delivers category level clusters.

 
#5 Specific data highlights key differences

One specific use-case Andy presented was pet care clustering on store-specific ranges, something that helped to identify the differences in pet ownership driven by density of urbanisation. For example, data shows large city stores sell more cat products. Small cities are balanced between cat and dog related purchasing, while small cities and towns have a greater appetite for dog products and small animal food like bird seed.

"We’d have never clustered this way before without actually seeing which products sell individually in these stores," said Andy.

We’ll have more insights from GPS to follow soon.