The Three Ps: the path to perfection in insights monetisation

Over the past few years, insights monetisation (a practice sometimes referred to as data monetisation) has become an increasingly lucrative opportunity for all kind of retailers. By the end of this decade, for instance, the global data monetisation market is expected to be worth more than $15bn – a significant increase on the $2bn that it was estimated at in 2020¹.

For grocery retailers, who deal with data and insights at gigantic scale, the potential is similarly enormous. By transforming data into insights and selling that intelligence to consumer packaged goods (CPG) brands, retailers have the opportunity to create sizeable and, critically, highly profitable new revenue streams. Today, when margins are under growing pressure, the incentives for doing so are clear. Sales data sharing is a traditional and well-established practice, while customer/shopper data is the new and growing area, undertaken retailer by retailer (no syndication). This article focuses on the latter.

When most people hear the term ‘insights monetisation’, the first thing that often springs to mind is quick cash. However, the biggest positive impact on customer satisfaction and the retailer/CPG balance sheets comes from a collaborative and cohesive mission to live and breathe ‘customer first’. A customer-first attitude will help retailers and CPG’s grow in the long term and increase customer satisfaction. With this mindset along with the right foundation, insights management can benefit retailers, CPGs, and customers alike, bringing major improvements to mission-critical processes like Category & Assortment Management, Brand Management, and Retail Media. Ultimately this leads to both category and revenue growth: both revenue emanating directly from insights management and revenue from increased sales through an overall optimised shopper experience.

The secret here is alignment and productive collaboration. When executed correctly, insights monetisation can strengthen the bond between retailers and suppliers, helping them to speak the shopper’s language and creating better outcomes for customers in the process. To realise that opportunity, though, retailers need to adopt a model that puts co-creation at the heart of the insights monetisation process – one that we refer to as “the three Ps”.

The Three Ps: a foundation for success

At dunnhumby, we have proven that the most successful insights monetisation programmes are built on three pillars: Platform, Process and People. Let’s look at each in turn.

• Platform
  The platform represents the technology layer, something that turns data into actionable insights and makes monetisation possible in the first place. In our own case, that would include applications like dunnhumby Shop, dunnhumby Assortment, and dunnhumby Promotions. Each of these can be used to build up an understanding of shoppers: generically, across categories, and against specific brands and products too.
  A good platform not only allows retailers and CPGs to diagnose performance from a shopper perspective, but to optimise the levers that shape that performance too – assortment, NPD, promotions, and media, for instance.
• Process
  This platform supports the Customer First Category Management collaboration between retailers and suppliers. When dunnhumby implements a new insights monetisation programme, for example, we carry out a full review of a retailer’s category management processes (both internal and supplier-facing) to ensure insights are used to make recommendations and take decisions, with a clear contribution from suppliers.
  Any process requires governance, of course, as well as a clear RACI (a responsibility matrix that ensures people are responsible, accountable, consulted, and informed) to maximise productive outcomes and value creation for each party.
• People
  Finally, you need the right people on the ground to turn theory into practice. Typically, this means having experts who can support and upskill retailer and CPG teams, and help them use insights to inform action plans.

Benefiting retailers and brands alike

When the three “Ps” are in place and working together, the value of insights monetisation rapidly begins to multiply – and not just for retailers, either. Let’s look at how retailers and brands benefit from this structured approach.

• Retailers
  For retailers, the “three Ps” can help them find, make, and save money:
  • They can “find” money by having suppliers invest in platform access. The more informed those suppliers become – and the more valuable the Customer First recommendations they receive, the more they can measure the results they’re getting, and the more likely they are to invest in future, too.
  • They can “make” money by driving category growth. When insights are turned into an action plan, the execution of that plan can drive category growth as a whole and boost customer retention.
  • Finally, they can “save” money by outsourcing some of the diagnostic and analytical work to suppliers, who are category experts with skilled teams.
• Brands
  For brands, the “three Ps” can help align more closely to what matters most to shoppers and retailers, to generate incremental value:
  • They get a better view of the category, their performance, and their position with shoppers. By nurturing a closer relationship with retailers, and speaking the same Customer First language, it also gives them the opportunity to optimise key levers based on real data – leading to incremental sales and better ROI.
  • With better insights comes greater context, which is particularly important to brands in the current market. In these inflationary times, customers are more cost-conscious than they have been in some time, making it all the more important for brands to align their offering to shopper needs.

All the above should hold natural appeal to retailers and brands – but what about shoppers? How do the “three Ps” help them? The easiest way to answer that question is to look again at the key advantages they create.

Firstly, you have the platform – technology that helps you understand the shopper. Next, you have a process that ensures that what you’ve learned is applied effectively. Finally, you have experts on the ground to support you.

In that combination, we can see the true power of this approach. As well as improving the commercial impact of insights monetisation, the three Ps are fundamentally customer-centric, encouraging a shared view of customer needs and so delivering real benefits such as better prices, more effective promotions, optimised shelf design with the most attractive products to the fore, and optimised positioning of products around the store to make shopping easier.

Of course, you could approach Category Management, Brand Management and Retail Media purely from the perspective of sales and margin. With our approach focused on customer insights, though, what you end up with is a focus on what matters most to shoppers – information that can be turned into an action plan tailor-made to deliver on their needs.

One final note: just putting this kind of model in place isn’t enough in isolation. It is critical to ensure in-store execution and measure the results. A value tracker that shows the impact on both customer satisfaction and sales is essential, and it’s something we implement as standard with retailers as part of the process.

Insights monetisation really is a win-win-win; it helps retailers grow revenues and satisfaction, it helps CPGs become better informed and more relevant, and it delivers better experiences for customers too.

¹ Monetizing data and technology can help unlock future growth—here’s how to take advantage of the opportunity – Deloitte, 2023