Using shopper data for marketing decisions has become essential. Experts share key principals for companies of all sizes to make the most of this new frontier.
Originally printed in the February 2021 issue of Produce Business.
As retailers and produce marketers become more sophisticated, and improved technologies provide more options, marketing efforts at store level and beyond are increasingly driven by data. “Being a successful food marketer involves understanding your customer and consumer,” says Dr. John L. Stanton, chairman and professor of food marketing at St. Joseph’s University in Philadelphia, PA. “Data from all sources will make the produce industry more effective and efficient. Virtually everyone is using some level of data.”
In the past 15 to 20 years, the idea of having data-driven decisions went from nice-to-have to a staple, says Jonna Parker, principal at Fresh Center of Excellence (FCE) with IRI in Chicago, IL. “Certainly commodity-based selling and pricing based on supply is prevalent in a seasonal product such as produce, but there have been numerous success stories because of data-driven strategies,” she says. “Retailers who have invested in category management based on data have seen results.”
Data-driven marketing is defined (in an article by Digital Authority Partners of Chicago, IL) as a set of techniques and tactics leveraging massive amounts of data to create effective marketing processes, targeting specific demographics and user groups at an individual level. Catherine Cowan, insights account manager at 84.51°, a Cincinnati-based data analytics and marketing company that provides customer insights and strategy for The Kroger Company and over 300 consumer-packaged-goods companies, defines data-driven marketing as a smarter way to stay relevant and reach the right audiences. “It is an effective, customer-centric way to succeed in any business,” she says. “Produce companies of all sizes and products use 84.51°.”
As more and more data is available to both retailer and the supplier, employing data becomes increasingly important, explains Chris Keetch, director of produce and floral for The Giant Company in Carlisle, PA, with 186 stores. “Market-share data has been around for a long time, but now that we can get down to the customer level and see what they buy and how often they buy, it opens new avenues for targeted engagement,” he says. “We can reward the most loyal and lure back those who have lapsed. Through targeted promotions, we can customize to whom we’re trying to reach and the offers they receive.”
The driving force behind data is optimization, explains Steve Lutz, senior vice president, insights and innovation at Category Partners, headquartered in Idaho Falls, ID. “If you look at fresh departments, the opportunity cost for both retailers and suppliers of operating at a suboptimal level is very high,” he says. “Previously, decisions were primarily experience-based, but using solely experience relies on a limited data set. Looking at data over a wider range reveals more outcomes and empowers better decision-making. The reality is stores have limited space, and everyone wins when the retailer and supplier can work together to optimize it.”
Identify What You’re Measuring
Determining optimal strategies starts with identifying what you are trying to measure, advises Jamie Postell, director of sales North America for Chiquita in Fort Lauderdale, FL. “The amount of big data available can be overwhelming, making it difficult to decipher the most important pieces,” he says. “Knowing from the start the results you are looking for can help you to find a path forward.”
FCE’s Parker suggests beginning with a measure of the market. “What are the real sales of your product and your competitor?” she says. “Look at the supply and how it sold. Did one store sell better than another? Those measurements are so critical in the industry.”
Additionally, Parker encourages going beyond a single commodity or category. “An apple grower may only think of other apple varieties,” she says. “But a consumer looks for full solutions. So at least once a year, look at the whole picture to determine what consumers are really buying. Recognize that no consumer buys anything in a silo. The interaction and learning between frozen, canned and fresh produce is essential. They are friends; they are foes; they can learn from each other. We should never think about produce in a vacuum.”
Retailers and suppliers utilize various tools to take measure, including scan data through Nielsen and IRI, loyalty programs, and social media platforms. “There are many resources for consumption data or consumer trends,” says Brianna Shales, marketing director at Stemilt in Wenatchee, WA. “Companies have developed their own ways to understand and use the information.”
Azul Meza, marketing manager at Fyffes in Coral Gables, FL, suggests starting with identifying the sources of data already available to the company. “These could be internal, such as your own database, or external, such as syndicated data or a retailer’s data,” she says. “Also, there are plenty of market and consumer insights available online.”
“84.51° answers key questions about who is purchasing their products, whether sales are trending in the right direction, and how to connect with even more customers,” says Cowan.
Giant’s produce team leverages internal data (POS, IRI, space-to-sales, store and customer feedback) as well as external data (industry trends, chef and restaurant insights) to fine-tune the assortment put on shelves. “The main areas of data-utilization are forecasting demand, optimizing the supply chain and the personalization and automation of online marketing and merchandising,” says Keetch. “We also use it in our targeting and personalization strategy on an everyday basis to deliver increased relevancy and value.”
Mark Cotê, produce merchandiser at Redner’s Markets in Reading, PA, with 44 stores, sees a crucial role for data in the communication of how much the retailer needs and its suppliers’ ability. “We share data with our suppliers to give them an idea of the volume we want,” he says. “The new platforms help optimize what’s driven best for the results of the brand and the category. It’s competitive out there, and anything you can be better at helps.”
Understand The Consumer
Next, understand the final buyer. “Get a pulse for how consumers are shopping your product and competitive product,” says Parker. “Look at reach and frequency. There are many ways to actually measure your demographics and provide a more accurate picture of your current or potential customer.”
Consumers want personalization when it comes to interacting with brands and products, Shales of Stemilt points out. “Data can help you be more precise in how you reach them through marketing efforts,” she says.
Companies must pay attention, understand, and provide what their consumers want if they are to continue to grow and succeed in the marketplace, emphasizes Fyffes’ Meza. “Data-driven marketing is an increasingly important aspect in the decision-making process,” she says.
Chiquita’s Postell highlights the importance of gaining insights on shopper profiles, shopping patterns/habits, and understanding key triggers that brought desired actions. “Having these insights allows for strong strategies to generating incremental sales/growth, know your consumer and grow your business,” he says. “By working with some of the largest data providers in the industry, retailers can help brands more accurately support programming.”
Consumer shopping data provides actionable information. “Looking at the shopping basket analysis is a good start,” says St. Joseph’s Stanton. “For example, one supermarket operator saw shoppers bought sour cream and chives when buying Russet potatoes. So he put a unit next to the Russets with sour cream, chives, bacon and cheese.”
Mining data analytics allows the New York Apple Association (NYAA) in Victor, NY, to identify and better connect to niche groups within its target audience, according to Cynthia Haskins, president and chief executive. “We can expand or modify branded messages to maximum reach and intention,” she says. “Through looking at the data, we can determine which messaging is resonating with the consumer and which ones are not. And if not, make a swift modification that saves us money in the long run, gets better results, and helps us plan.”
Though consumer data has been elusive because of the way produce has been sold, IRI’s Parker explains current tools such as frequent shopper card data and other tools now provide greater access. “Once we identify specific audiences, then companies can use digital, on-line or even old school mail to implement targeted marketing,” she says. “They can have a much higher ROI by using targeted marketing.”
Define and Set a Plan
Companies must approach data marketing with a defined plan. “Be clear about what you want to learn and test in every action,” says Postell. “Identify key takeaways from each action that will enhance the performance of every action that comes after it. Clearly defined goals allow brands to set realistic benchmarks to help inform future campaigns.”
A good plan focuses on specific target markets. “Don’t market to everyone all of the time,” says Parker. “We are not a one-size-fits-all society. We have become a personalized society. We don’t sell total produce. We sell categories, products and PLUs, and each of those has a certain audience, outlined through data.”
Effective data provides a platform for planned marketing. “Data allows you to make informed decisions enabling you to be proactive rather than reactive,” says CarrieAnn Arias, vice president of marketing at Naturipe Farms in Salinas, CA. “The use and analysis of scan-data trends is most beneficial for long-term planning and future program execution.”
Lutz of Category Partners maintains that nearly every single category in produce is involved in some level of fact-based marketing and planning between suppliers and their retail partners. “Any produce marketing company with a relationship with Walmart is bringing data-driven expertise to the table,” he says. “It’s increasingly the case with Kroger too. If you’re a key partner, there’s an expectation by major retailers that you show up with insights that can support a fact-based planning process.”
Keetch explains the Giant Choice Rewards, the store’s loyalty program, provides rich data insights the store leverages to offer strategies designed to achieve desired objectives. “Though Choice Rewards, we offer personalized savings opportunities to our customers on the items and categories they buy most,” he says.
Determining possible future outcomes and making well-informed marketing decisions are the main reasons NYAA uses analytics and takes the time to understand them. The organization recently contracted with an organization to provide retail performance data. “We reviewed the Category Development Index that shows the apple category performance relative to population in various markets as well as viewing variety performance, markets, package type and determined composite comparison of all the New York apple varieties,” says Haskins. “This information is one tool assisting us as we work on our strategic plan.”
Data alone is not the ultimate decider but must be considered within the bigger picture. “Consider baseline trends or other factors in the category,” says Lutz. “For example, if crop volume is down 20% because of poor production due to a freeze or supply interdiction, then as a retail organization I may look at my volume and see category X is down 10%, but a loss of 10% when industry production is down 20% would be a great success. On the other hand, if there is a bumper crop and every supply is up 10%, then a 5% increase means the retailer actually missed half the growth opportunity.”
When examining the effectiveness of a promotion, Cailin Kowalewski, account promotion manager at NYAA, recommends looking not only at data given from tools but at data received from buyers, partners, and suppliers. “Trends in a dataset may show that your ad promotion tripled sales without considering the impact a great merchandising effort or competitors’ promotions may have had,” she says.
Understanding produce isn’t the same from year-to-year, and how crop changes impact consumer purchasing is important, asserts Stemilt’s Shales. “Some years supply is limited, and so it makes year-to-year comparisons a bit more challenging,” she says. “That’s a big factor and not something CPG products have to contend with.”
Follow-Up On The Numbers
Data analysis on the backside of marketing is equally important. “Always use the data to analyze the success of your marketing campaign,” says Cowan of 84.51°. “Looking at the data after a campaign ends can be just as informative as using it before a campaign begins.”
This is a step we rarely ever get to even in CPG, explains Parker. “Measure the success or failure of what you’ve done,” she says. “I’ve seen so much impactful analysis done to sell into a program, but after, there is no measurement or follow-up. How much did we see a change in the sales or behavior? Those become really exciting conversations to have.”
Cotê describes the coordination on the Redner’s Rewards loyalty program. “Our IT department works with our vice president of perishable operations to look at and analyze the data,” he says. “We work with other departments such as advertising then to implement and evaluate programs.”
Retailers and marketers must also consider how deep into the process they want to go. “Data exists at national, regional, division and even store levels,” says Lutz. “It boils down to time, expertise, and investment. There is an opportunity cost to everything. The companies that are most successful are balancing what they need in terms of the cost of the information against the benefits.”
Coordinate Couponing and Merchandising
Instant register couponing, or digital couponing, should be used as part of a fuller data-analyzed program. “Scanner data has been effective for instant coupon promotions, as we are better able to target customer groups with relevant offers,” relates NYAA’s Kowalewski. “We can push out different offers to different shopper groups simultaneously, compare the results to each other, and subsequently learn more about how those groups interact with our brand.”
Data-driven tools can be used to up-sell or cross-promote.
Couponing is most effective when combined with innovative merchandising. “The value of the coupon is more than just making something cheaper,” says St. Joseph’s Stanton. “It should be used to draw attention to something the shopper may not have thought of. It is more effective when trying to get incremental sales and not just giving someone a deal.”
Redner’s Markets has amped up the use of its mobile app for couponing, describes Cotê, for example, promoting Navel oranges at $2 off if the shopper uses the mobile app. “Using this type of marketing accelerates our business goals,” he says. “We have at least two mobile app marketing deals every week. We did one where all the shoppers had to do was show the app, and they would get a free orange.”
As a starting point, suppliers and retailers should be looking at the data trends to identify correlations between performance and specific activities, suggests Lutz. “It could involve secondary displays, price changes, assortment decisions, introduction of a new package, or couponing,” he says. “It’s not uncommon for suppliers to look at data over time and validate the impact of retail practices.”
IRI’s sales data and purchase history data points can be used to create targeted couponing or other digital media programs, serving specific ads to specific people. Yet, Parker warns couponing may get a bad rap because the supplier or retailer may send an offer that isn’t consistent with the shopper’s interest. “They must analyze the data to ensure their targets are specific and relevant,” she says.
Drive The Up-Sell Opportunities
Data-driven tools can be used to up-sell or cross-promote. Cowan of 84.51° suggests companies take advantage of cross-promotion opportunities more often by using Basket and Cross-Shop reports to understand product affinities. And, Naturipe’s Arias believes cart affinity data is the cleanest data available whether using retailer-specific or syndicated data. “Affinity data is useful in regard to finding good promotional partners and driving product innovation,” she says.
According to Chiquita’s Postell, category management can use consumer data to analyze purchasing behavior and identify cross-category purchasing habits. “Once brands are able to identify who their consumers are and what else they are purchasing, they can work to create value,” he says. “One of the larger data-driven produce trends we’ve witnessed is the growth in organics, prompting suppliers to offer organic versions of their conventional counterpart.”
Retailers and brands mine data to discover opportunities in cross-promotions with non-produce categories. For example, through research, Chiquita uncovered how bananas and yogurt have a buyer overlap of 85%, with bananas as the #1 unit driver for produce and Chobani being the #1 unit driver in-store for yogurt. “Leveraging these insights, the two powerhouses teamed up in 2019 to launch an in-store promotion and digital sweepstakes to unite banana and yogurt lovers both at retailers and online, resulting in an overall sales lift across both categories,” says Postell.