Interview by Symphony RetailAI’s Paul Hoffman. Lisa Kinney, VP of Customer Strategy and Merchandising Analytics, Albertsons talked about the power of customer data at Xcelerate Retail Forum 2019.
What is one of the most important trends in understanding customers today in retail?
I think one of the most significant trends impacting how we think about our customers and what influences their behavior is the trend around choice. There are ever-expanding options of how customers choose to fulfill the needs of the family. Both in how they shop and where they shop. No longer is there one mass market retailer we all are focused on beating, as it was over 20 years ago. Share of wallet is increasingly fragmented and harder to earn. So, understanding the influence of choice is key. With this knowledge, we then need to place our bets on how we can win their choice. It’s about wrapping our arms around where we place our bets with customers.
A big part of my role is to help the organization understand the customer today and mobilize around that knowledge to shape and measure our decisions. Why are customers choosing us and to what extend is one customer more important than another? Say, for example, a traditional grocery is most often selected because of their convenient location. Is that enough to insulate yourself from other choices are available to the customer? If we know that convenience is at play, then how do we make that better, the in-store experience more convenient…what role does digital play in convenience with those customers? Are there other drivers to preference we should do more of and invest in? It comes down to a very strong understanding of your customer. For those that believe in driving the business profitably and sustainably happens when we move existing customers up the loyalty ladder, don’t we need to know what are the drivers of loyalty and ensure we are relentlessly focused on doing more of what matters most with them? But, where do we place our bets with the dollars we have to make this happen? If we’re not creating time to consume insights from our data about our customers, then we’re doing ourselves a disservice. It takes time, energy, commitment, curiosity and the right cultural mindset in the organization.
What is the biggest challenge you face leading customer strategy at Albertsons?
I don’t think our issues are different from most in the industry, we all are facing similar challenges, regardless of the vertical. When you consider the influence of shopper choice as I mentioned, coupled with other macro trends – like the widening wealth gap, an aging population, foreign trade relations and the associated pressure on our CPG partners to deliver profitable growth to shareholders, growth coming from emerging new niche brands we need to understand and get ahead of etc. – it’s a tough environment in which to operate. A lot is happening quickly. Add to this complexity the challenge of too much simplicity when it comes to understanding customers. There’s a lot of talk about Millennials or Gen X or Z as if they’re homogenous. Of course, they’re not. There’s a huge range of preferences within whatever generation we’re seeking to win with. How we communicate to the generation spread, how we position ourselves based on our assortment, service and pricing and what technologies/mediums they use or prefer to use is something that really can’t be overly generalized. Over-generalization is another thing we also often miss in shaping customer strategy…. which is understanding a customer’s importance to us now vs. later. For example, when this college student graduates and become a professional, their income levels and family sizes grow, are we ready and understand them today so we can keep them in our stores tomorrow? I don’t like to use the word “complicated,” but that’s what it is.
One of my challenges is to make the complicated simple. It’s easy to get overwhelmed, focusing on too many things that have little overall impact to the business. Most professionals in insight roles I suspect would agree. Diagnosing where we have challenges and opportunities and seeing trends early enough to know what will impact our business tomorrow is at the core of what we do.
I believe in a test, learn, and scale model. When we execute a plan designed to drive a shift in a customer’s behavior, did it work? How much can we expect this shift to drive if we were to scale it? Is the impact statically modeled appropriately with enough confidence that at scale we can expect similar results? It’s about taking small purposeful steps. We must move quickly but deliberately through using the power of our data to create the right insights that matter and measure what we do.
What technology approaches are you employing to better understand and serve your customers?
There’s no one technology that solves it all, but I would say that right now, the number one thing that we’re doing is connecting the data that we have together and trying to make it as real-time as possible. We know what our customer is doing in the store, we know what they did in the store yesterday, we probably can get fast enough to know what they’re doing in the store during their shopping trip. We also know the last time they went on our website, we know what media they consume most often and how this influences their path to purchase. Seeing the customer across all touch points where choice is playing a role allows us to better allocate our investments where and how we know they will best respond.
My challenge is making sure that we balance short-term return with long-term return, so for us, it’s about connecting that data first, so that we can model out expected customer response. You can’t do that if the data is not connected, because something you can do in-store that is considered causal might be influenced by our communication and media strategy. But if it’s not connected, how do we know?
Tell us what you spoke about at Xcelerate 2019 in Dallas.
I spoke about the evolution of change and embedding customer insights into a retailer organization. I covered how Albertsons is doing it, how we’re trying to transform our organization using insights around our customers, and what that means for us and our partners. I shared the challenges and what I see “good” looking like as we progress through this process. It’s a journey (a word I know is used far too often), but it truly is a journey, and that journey has a different terrain and alternative roads I expect we will take along the way. For me, it’s changing our thinking one decision at a time, sharing one idea at a time, and letting insights and ideas permeate and simmer when it needs to.
I believe there are two types of retailers: one retailer that will ask how much money it can make off its data, and another retailer that will ask how it can transform the business using this data.
I think the latter is where we are as an organization and I was delighted to share how we are going about it at Xcelerate.
What is something personal about yourself that gives our readers an interesting perspective about you?
I think it’s probably more surprising to me than it would be to anybody else but having moved to Boise with myself and my dog and my clothing about a year and a half ago, I had to find passions that sit outside of work that aren’t about defined by being a mother. When your children are grown and self-sufficient, it’s time to revaluate. So, I have turned into a huge outdoor trail runner, hiking, outdoor enthusiast. I have run into coyotes, rattlesnakes and bobcats. Quite a change for me vs. Midwest living. I’ve been lost and hiked over fourteen miles, not knowing exactly when it was going to be over and oddly considered it an adventure. I now ask myself, “What part of the outdoors am I going to explore and conquer today?” I never envisioned myself doing this.