Retail Leader presents “The Prophets of Aisle Six” brought to you by dunnhumby, a new online reality series that showcases innovation in food retail and how leading operators address key challenges with technology.
The first installment features top executives from Raley’s Supermarkets, a highly regarded operator of 120 stores in California and Nevada. In the series kick off, Jose Gomes, Managing Director of North America for dunnhumby, a leading customer data science company, travels to Sacramento to visit with Raley’s executives to learn about the company’s origins and unique mission to help customers make healthier food choices. Raley’s CEO Michael Teel and COO Keith Knopf also discuss with Gomes how the grocer is leveraging customer data science to make the company’s mission come alive in a way that’s both effective and sustainable.
“So much of the last year has focused on the gloom and doom of some of the changes occurring in the retail market,” said Gomes. “There is a growing groundswell of retailers that are not only reimagining what it means to be a retailer, but also how they can embrace data and technology to better meet the needs of today’s consumers. I am excited to have the opportunity to meet with a diverse range of retailers and showcase how they are addressing key challenges to propel their businesses further.”
That proved to be the case when Gomes visited Raley’s, a company founded in 1935 whose early success stemmed from its founder turning a bad situation into a competitive advantage. As CEO Teel explained, when his grandfather founded the company he lacked the money to lease a main street location others viewed as desirable. Instead, he lease space on a side street which gave the original Raley’s the benefit of a parking lot so it was able to promote itself as the first drive-in market in Sacramento, Calif.
Available parking and a philosophy of knowing and treating customers well is what helped Raley’s grow and prosper. Today, that philosophy of knowing customers well is fueling continued success, innovation and new ways of serving shoppers. For example, Teel describes in his conversation with Gomes how a decision five years ago to invest in a loyalty program led to the realization that Raley’s could do something really different as a result of the deeper insights it had gained.
One of the first ways was to change the overall approach common in food retailing that involved merchants basing decisions around shelf placement and promotional activity on the availability of manufacturer funding and incentives.
“We said ‘let’s change that.’ With the data that we have we can reverse the system,” Teel says in the video. “Learn our customers and what their purchasing behaviors are and then go to go our manufacturers, the other way around, and tell them, ‘here are your customers, they are buying these products, would you like to promote to them?’”
Another key data-enabled change involved Raley’s objective of helping customers change the way they eat one plate at a time. Serving shoppers in pursuit of a healthy lifestyle was identified as an opportunity for Raley’s to really differentiate itself and the data available via the loyalty program allowed the company to make well-informed strategic moves. One example is the recent introduction of Raley’s Shelf Guide system that presents nutrition and other unique information at the point of purchase so shoppers can find better options.
As COO Knopf explains in the video, Raley’s wants to help people make decisions to eat better, but not make those decisions for them and Shelf Guide helps by calling out attributes such as “minimally processed,” or “nutrient dense.”
The Raley’s journey that began more than 80 years ago continues today as the company finds new ways to harness data to serve shoppers and drive growth.
Check out the full video here and stay tuned for the next episode of the Prophets of Aisle Six that will find Gomes in Cleveland meeting with Jeff and Tom Heinen, co-presidents of Heinen’s Grocery Stores, a family-owned and operated regional supermarket chain in Northeast Ohio and Chicago. Heinen’s is using customer data science to help create the shopping experiences customers want with the products they value to satisfy their needs, and earn long-term loyalty.