5 Challenges faced by Grocers while Leveraging Consumer Data

Those in charge of grocery stores have always aspired to get into their consumers' heads. Many questions pop into a grocer’s mind, answers to which can help them understand the motivations and desires of their consumers better.  

According to the Incisiv Annual Digital Maturity Benchmark report, 80% of shoppers will leave a website if it fails to offer convenient navigation with relevant results. Further, 89% of shoppers are more likely to make another purchase after a positive customer experience. With shopper experience playing such a crucial role in determining a consumer’s purchase behavior, it is vital for the grocers to not only understand but also predict their needs and cater to them accordingly. 

This is where consumer data comes in and empowers grocers to both retain existing consumers and gain new ones. However, consumer data can also bring in its own set of challenges for grocers. Below, we examine some of these challenges:

Gathering Accurate Data

While collecting data, one of the key rules is to identify the relevant information and collect it using the most efficient method. If bad quality data is collected or multiple sources of data are not handled correctly inaccurate conclusions can be reached. Business Wire reports that  96% of grocers struggle to use data to create customer strategies that spur growth.

Ensuring Consumer Security 

Grocers with robust offline and online presences tend to gather various kinds of data - consumer data collected through loyalty programs, transactional data, and financial data, among many others. Due to the immense amount of data that every grocery retailer collects, it is crucial to ensure that this data is stored and managed in a way that avoids any potential data breaches. The security of their personal information was cited as being the top worry by three quarters (74%) of consumers, reported Information Age. Hence, to gain consumer trust, it becomes pertinent for grocers to invest in a secure data infrastructure. 

Finding Right Technology

The grocery industry is fiercely competitive and complex, however, this does not imply that the data captured and stored should be impenetrable and difficult to decipher. It helps if the data captured is transparent and raw since it allows grocers to easily access, manipulate, and derive actionable insights. Additionally, the task at hand becomes easier if the right tools are deployed by the grocers. Hence, grocery retailers should focus on integrating state-of-the-art technological solutions within their businesses. This should be done while maintaining the quality of the data as well since a high-quality dataset can help generate numerous actionable insights when treated using different technological tools.    

Identifying Consumer Segmentation

Getting to know the target market and their preferences is another difficult task. Grocers need to be able to categorize the various individuals who frequently visit their online platforms. Grocers may better understand user behavior and the factors that draw consumers to them by segmenting the user base. According to a recent RSR Research survey, 55% of retailers state that understanding the consumer's path of purchase is a challenge for them. Furthermore, this consumer journey has become increasingly complex and consumers can engage with the grocers multiple times before they finally make a purchase. Hence, understanding consumer segmentation and their preferences become pivotal.

Keeping Up With Competitors

If the grocers do not address the aforementioned challenges, the biggest risk that they face is the inability to keep up with the competition.  A survey by RSR research states that 33% of competitors utilize consumer information to gain more “share of wallet”. If grocers are gathering subpar data, they not only face the risk of deducting non-actionable insights but also the challenge of not being able to compete in the current market.

Understanding these challenges is the first critical step in overcoming them. Once a grocer clearly understands the challenges it is facing it can put an effective plan in place to address and overcome them.