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The Shopper-Centric Retailer: Three Case Studies on Deriving Shopper

Insights from Frequent Shopper Data

Article in Review of Marketing Research · September 2014

DOI: 10.1108/S1548-643520140000011003

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THE SHOPPER-CENTRIC
RETAILER: THREE CASE STUDIES
ON DERIVING SHOPPER INSIGHTS
FROM FREQUENT SHOPPER DATA

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Hristina Dzhogleva Nikolova, J. Jeffrey Inman,

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Jim Maurer, Andrew Greiner and Gala Amoroso is
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ABSTRACT
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G

In the age of “big data,” one of the most important capabilities that
differentiates the winners from the losers in the intensely competitive
d
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grocery market is how successfully a firm can harness its vast amounts of
er

shopper data to become more shopper-centric. Grocery retailers struggle

with how to manage the tremendous amount of data available to them and
m

best leverage their frequent shopper data to derive insights. These data
)E

also present an opportunity for academic research on decision-making

(C

and evaluation of strategic initiatives. This chapter discusses three case

studies that illustrate the various capabilities of frequent shopper data in
generating shopper insights. Specifically, using frequent shopper data for
millions of shoppers, the three case studies demonstrate how frequent
shopper data can be used as an important information asset for under-
standing differences and similarities among different shopper groups

Shopper Marketing and the Role of In-Store Marketing

Review of Marketing Research, Volume 11, 75
102
Copyright r 2014 by Emerald Group Publishing Limited
All rights of reproduction in any form reserved
ISSN: 1548-6435/doi:10.1108/S1548-643520140000011003
75
76 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

(Case Study 1), as a means to assess the effectiveness of store redesigns/

environment changes (Case Study 2), and as a key tool for evaluating
program success (Case Study 3). The chapter concludes with a discussion
of how successful collaboration between practitioners and academics can
be a boon to both business success and academic research.
Keywords: Shopper marketing; store redesign; marketing metrics

INTRODUCTION

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The competition in the grocery market is fiercer than ever. About 65,000

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grocery stores are fighting for a piece of the $550 annual billion grocery
is
market, where shopper expectations of price, service, and assortment
bl
continue to climb (Food Marketing Institute, 2012). Understanding what
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shoppers want and value, how they react to different promotional offerings
up

and changes in the in-store environment, and how their shopping habits and
behaviors have changed over time is now essential for grocery retailers as
ro

they fight for survival against intense competition not only from other super-
G

markets but from other formats such as mass merchandisers (e.g., Walmart
d

and Target), club stores (e.g., Costco and Sams Club), drug stores (e.g., CVS
al

and Walgreens), dollar stores (e.g., Dollar General and Family Dollar), and
er

online retailers (e.g., Amazon). For example, as of October 2013, Walgreens

m

had over 8000 stores and CVS had over 7000 stores. Shopper insight
)E

generation is becoming a crucial weapon in the arsenal of successful grocery

retailers seeking to gain a greater share of consumers’ food dollar.
(C

In the near future, the most important capability that will differentiate
the winners from the losers in the intensely competitive grocery market will
be how successfully a firm can harness its “big data”
its vast amounts of
shopper data
to become more shopper-centric and better understand and
satisfy its shoppers’ needs, tailor its offerings and in-store environment
accordingly, and improve business operations. A recent study by IBM
(2013) suggests that the future may already be here. A survey of 325 senior
retail executives in North America, India, the United Kingdom, and
Australia revealed three traits inherent to successful retailers (success was
assessed in terms of average shopper spend per trip and stock price com-
pound annual growth rate (CAGR)): “Merchandising functions that are
customer-oriented, collaborate across internal and external boundaries,
and use analytics to make smarter business decisions” (p. 2).
The Shopper-Centric Retailer 77

Until relatively recently, grocery retailers and manufacturers interested

in shopper data and analytics were primarily at the mercy of marketing
research suppliers like Nielsen and IRI. For example, Nielsen operates its
Homescan Panel, a representative panel of thousands of U.S. households
who continually provide information about all their purchases across all
U.S. retailer outlets. The panelists are provided with a handheld scanner
and asked to (a) scan the barcodes of all their purchases after each shop-
ping trip, (b) indicate where they bought the products, (c) input the price
paid, and (d) indicate any coupons or promotions used. These data are
then transmitted to Nielsen. The collected data then enables Nielsen to
track shopper behaviors and trends across brands, retail chains, and retail

ng
formats (e.g., supermarkets, mass merchandisers, drug stores). Most fast-
moving consumer goods companies and large retail chains subscribe to the

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Nielsen Homescan Panel data and pay Nielsen a large annual fee to extract
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important insights about their brand or store, as well as their competitors
bl
and thus improve their offerings and business operations (Nielsen, 2011;
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Nielsen.com).
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However, the retailing landscape has changed tremendously in the last

several years, with rapid consolidation among U.S. grocery retailers. The
ro

sales of the top 20 U.S. grocery chains were about two-thirds of the total
G

grocery sales in the U.S. market in 2011, a significant increase from the
d

39.2% in 1992 (United States Department of Agriculture, 2011). This rapid

al

consolidation has essentially resulted in grocery chains having millions

er

of members in their frequent shopper or loyalty programs (FSP). For

m

example, Kroger, the nation’s largest grocery chain, has about 20 million
)E

members in its FSP.

Until recently, grocery retailers primarily used their FSP as a loyalty
(C

program to reward loyal shoppers with various coupons and discounts for
repeat purchases. However, grocery retailers have begun to recognize the
untapped value of their FSP as a potentially rich source of insights and
new knowledge about their shoppers and operations that could help them
achieve a competitive advantage. In contrast to the old world of Nielsen
Homescan Panel, food retailers now essentially have their own in-house
panel of shoppers, which represents an underutilized information asset that
could yield important insights for retailers and manufacturers alike as they
strive to remain competitive in the grocery landscape.
Kroger has clearly demonstrated over the last few years that deriving
insights from loyalty card data can translate into dollars. In 2003, Kroger
and dunnhumby (a UK-based customer science company) established a
joint venture called dunnhumby USA. The purpose of this venture was to
78 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

extract actionable insights from Kroger’s FSP data and utilize those
insights to increase the effectiveness of marketing promotions, improve the
overall shopper experience, and ultimately increase the chain’s sales and
return on merchandising investments.
The innovativeness of Kroger with respect to its customer data analytics
has set the chain apart from its competitors as evidenced by its growth in
profits and revenues and its impressive stock price climb since the joint ven-
ture launch (77% in the first two years compared to S&P’s 44% increase
during the same period; Boyle, 2007), as well as the fact that Kroger was
chosen as the 2013 Retailer of the Year by Progressive Grocer for the sec-
ond time in the last five years (Dudlicek, 2013). The partnership of Kroger

ng
with dunnhumby has allowed the grocery chain to become shopper-centric
and to put the shopper at the forefront of its business strategy. Harvesting

hi
insights from its FSP data is viewed by Kroger to be an important competi-
is
tive advantage, as it enables the retailer to design customized offerings and
bl
target them at their most profitable shoppers (Retailing Today, 2012). In
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fact, Kroger CEO David Dillon calls big data analytics his “secret weapon”
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in battling competitors (Gustke, 2013).

Having witnessed Kroger’s positive experience with dunnhumby, retai-
ro

lers across the nation have begun to increase their in-house analytics cap-
G

abilities and/or partner with third-party companies such as Nielsen and

d

Catalina Marketing to extract insights from their own FSP. However, the
al

struggle that grocery retailers face now is how to manage the tremendous
er

amount of data available to them and best leverage their frequent shopper
m

data to derive insights about their shoppers, product offerings, services,

)E

promotions, and even store environments.

Therefore, the purpose of this chapter is to discuss three case studies
(C

that illustrate the various capabilities of FSP data in generating shopper

insights. Specifically, we focus on three examples of how grocery retailers
can utilize their loyalty card data for different purposes, including but not
limited to the following:

1. FSP data as an important information asset for understanding differences

and similarities among different shopper groups
Grocery retailers can
use their FSP data to gain a deeper understanding of different segments,
track changes in their purchasing behaviors over time, and identify
drivers behind desired and undesired behaviors with the intention to
better meet the current and future needs of key shopper segments (Case
Study 1).
The Shopper-Centric Retailer 79

2. FSP data as a means to assess effectiveness of store redesigns/environment

changes
Food retailers often redesign key departments and make
improvements to the store environment (e.g., new offerings, new ser-
vices, remodels) and test them in a small number of locations before
rollout. FSP data can be an essential component of these test-and-learn
practices by enabling retailers to assess the new design’s effectiveness in
achieving the desired objectives (i.e., evaluate the impact on sales, exam-
ine differences in the impact across products, shoppers, and stores)
(Case Study 2).
3. FSP data as a key tool for evaluating program success
Food chains
can also use FSP data to evaluate the effectiveness of new informational

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programs (e.g. health and wellness programs, sustainability initiatives,
location-based promotions) already implemented on a large scale (Case

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Study 3).
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In sum, each of the three case studies discussed subsequently exemplifies
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how grocery retailers can discover and leverage the potential knowledge
contained in the tremendous amount of data collected through their loyalty
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programs to discover new shopper insights and improve their operations.

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As such, we anticipate that this book chapter will be of interest to practi-

G

tioners seeking ways to take advantage of their FSP data as a source of

competitive advantage. Furthermore, FSP data has also been underutilized
d
al

by academics; therefore, we think that academic researchers will find the

er

chapter valuable, because it provides concrete examples as to how FSP

data can be used to develop and test marketing and consumer behavior the-
m

ories and to estimate empirical models of shopper behavior. After present-

)E

ing the three case studies, we conclude with a discussion of how

(C

practitioners (i.e., grocery retailers) and academic researchers can collabo-

rate with each other in the realm of frequent shopper data and mutually
benefit from such cooperative efforts.

CASE STUDY 1

Background and Business Problem

In 2013, a large U.S. supermarket chain, ranked as one of the Top 25

North American food retailers (Supermarket News, 2012), recognized that
the sales of frozen products had been declining steadily in the past few
80 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

years. The chain was interested in understanding the drivers of the frozen
foods sales decline and developing solutions to bring shoppers back to the
frozen foods aisle. Industry research reports indicate that the millennial
generation, a large and influential consumer generation (Rainer & Rainer,
2011), is not buying frozen products as much as previous generations.
Industry research has shown that millennial consumers tend to prefer fresh
foods, ready-to-eat foods, and shelf stable products and thus are less
inclined to purchase frozen products (Hartman Group, 2011). The chain
suspected that millennials might be a key segment underlying the sales
decline and sought to test this hypothesis using its FSP data.

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Millennials

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Strauss and Howe (2000) are credited with coining the term “Millennials”

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and define the segment as individuals born between 1982 and 2004.
bl
Although the exact birth date range is somewhat subjective, it is clear that
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Millennial’s purchase power will exert a powerful influence on the U.S.
economy in the near future. For example, Mushkin et al. (2012) project
up

that the number of Millennials in the United States over the age of 25 will
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almost quadruple in size to 64 million in 2020. The growth in the millennial

G

segment’s size and buying power make it critical for consumer packaged
goods (CPG) firms and retailers to understand this segment’s preferences
d
al

and values vis-à-vis food.

er

According to a report published by the Hartman Group (2011),

Millennials prefer fresh food and less processed foods. “Millennials will be
m

the first generation to be raised under the mantra of ‘fresh/less processed’ …

)E

they will forever regard processed foods as inherently unhealthy.”

(C

Millennials are twice as likely as Baby Boomers to report that they regularly
eat certified organic foods (Predd, 2012). In their 2012 report on
Millennials, Mushkin et al. make a sobering prediction that the two “losers”
as a result of the ascendance of Millennials will be grocery retailers and
manufacturers of processed foods.
Given that the millennial generation currently represents the largest
segment of U.S. grocery shoppers and predictions that millennials will be
cautious in approaching the frozen foods aisle, the grocery retailer was par-
ticularly interested in examining the differences in purchasing behavior and
attitudes of its millennial shoppers compared to its other shoppers with
regards to frozen foods. The specific research objectives were as follows:
• Analyze existing purchasing behaviors of millennial and other shoppers
within the frozen foods category to help understand the frozen food
The Shopper-Centric Retailer 81

subcategories in which the food retailer should consider expanding its

assortment and focusing its messaging in order to attract millennials.
Specifically, the food chain was interested in examining whether millen-
nials were indeed driving the frozen foods sales decline in its stores and
whether there were any differences in the decline rates of millennial ver-
sus other shoppers.
• Assess millennials’ general attitudes toward the frozen foods compared
to other shoppers, as well as attitudinal barriers to overcome and/or
motivations to emphasize in order to influence millennial shoppers to
buy more frozen foods. Understand what would resonate best with the
millennial consumers so that the grocery retailer can adjust its merchan-

ng
dising, selection of frozen foods, in-store layout of the frozen food aisle
and promotions to more effectively appeal to this generation.

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Analytical Approach and Findings
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In order to achieve these objectives, the grocery retailer relied on its loyalty
program. Specifically, shoppers’ purchasing behavioral differences were
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traced through the chain’s FSP data, while the attitude differences (i.e., the
G

obstacles and motivations for purchasing frozen foods) were based on an

d

online survey administered to a representative panel comprised of members

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of the chain’s FSP member households. The findings from both data
er

sources are discussed subsequently.

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)E

Behavioral Differences
First, the grocery retailer utilized its frequent shopper data to examine if
(C

there were differences in the purchase behaviors of millennial shoppers

compared to other shoppers with respect to frozen foods. The retailer
focused its examination on six subcategories of frozen foods: (1) frozen
appetizers, handhelds, pizzas; (2) frozen single serve entrees and meals for
two; (3) frozen family meals; (4) nutritional meals (better for you (BFY)/
weight management (WM)); (5) natural and organic meals (BFY); (6) fro-
zen potatoes, vegetables, and fruits.
The chain’s FSP data contained information about the purchases of
each shopper as well as their demographic background. The availability of
the demographic information was key for the purpose of this project,
because it allowed the retailer to segment their shoppers into two groups

millennial shoppers and other shoppers
based on their age. It should be
noted that capturing demographic information is not a standard practice in
82 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

all FSP because it represents an additional cost to the basic program invest-
ment. However, as will soon be apparent, collecting and periodically updat-
ing shoppers’ demographic information allows deeper insights to be
extracted from frequent shopper data.
For the scope of this project, the grocery retailer defined the millennial
generation as all shoppers between 18 and 34 years of age in 2013, while the
comparison segment included all shoppers who were older than 34 years.
For purposes of the behavioral analysis, the chain extracted a random sam-
ple of 10,000 millennial shoppers and 10,000 other shoppers. Fig. 1 shows
the total annual purchases in each subcategory for both millennial and other
shoppers during the April 2012
March 2013 period. As a whole, during

ng
this period the millennial shoppers spent 5.5% more on frozen foods
than the comparison shoppers. An examination of the six subcategories

hi
reveals some interesting differences between millennial and other shoppers.
is
Specifically, millennial shoppers outspent all other shoppers in frozen appe-
bl
tizers, handhelds, and pizzas (by 32.8%), as well as natural and organic
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meals (by 36.9%). However, the purchases of millennial shoppers were

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lower than those of other shoppers in the frozen single serve entrées (by
1.2%), frozen family meals (by 24.9%), nutritional meals (by 3.4%), and
ro

frozen potatoes, vegetables, and fruits (by 0.6%).

G

In addition, the grocery chain examined how both millennial and other
d

shoppers allocated their total frozen food budgets among the six different
al

subcategories during the period of April 2012
March 2013 (Fig. 2). The
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analysis revealed that the millennial shoppers of the grocery chain spent
m
)E
(C

Frozen Potatoes, Veggies, Fruits

Natural & Organic Meals (BFY)

Nutritional Meals (BFY/WM)

Frozen Family Meals

Frozen Single Serve Entrees and Meals for Two

Frozen Appetizers, Handhelds, Pizzas

$- $5,00,000 $10,00,000
Others Millenials

Fig. 1. Case Study 1: Total Sales in Frozen Foods Subcategories (Millennial vs.
Other Shoppers; April 2012
March 2013).
The Shopper-Centric Retailer 83

35%
31% 30%
30% 29% 29%
24%
25%
19%
20%

15%

10% 7% 7% 8% 7%
5% 5%
5%

0%
Frozen Frozen Single Frozen Nutritional Natural & Frozen
Appetizers, Serve Entrees Family Meals Organic Meals Potatoes,
Handhelds, and Meals for Meals (BFY/WM) (BFY) Veggies, Fruits

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Pizzas Two

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Millenials Others

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Fig. 2. Case Study 1: Subcategory Shares of Total Frozen Foods Purchases (April
bl
2012
March 2013).
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the largest percentage of their frozen foods budget on frozen single serve
entrées and meals for two (29%), followed by frozen potatoes, vegetables,
ro

and fruits (28%), as well as frozen appetizers, handhelds, and pizzas

G

(24%). Frozen family meals (5%) represented the smallest share of the
d

millennial shoppers’ total annual spending on frozen foods. Similarly, for

al

other shoppers, the subcategories with largest share of the total frozen
er

foods purchases were frozen single serve entrées and meals for two (31%),
m

followed by frozen potatoes, vegetables, and fruits (30%), as well as frozen

)E

appetizers, handhelds, and pizzas (19%). However, in contrast to the

millennial shoppers, other shoppers spent the least amount of their frozen
(C

foods budget on natural and organic meals (5%). The greatest differences
between the two segments is that millennials spent 2% points more on
natural and organic meals (7% vs. 5% for other shoppers) and 5% points
more on frozen appetizers, handhelds, and pizzas (24% compared to 19%
for other shoppers). Further, millennials spent 2% points less of their
frozen foods dollar on frozen potatoes, vegetables, and fruits, frozen single
serve entrées and meals for two, and frozen family meals. These results
reinforce the industry research discussed earlier finding that millennials put
importance on organic and natural items and on convenience.
To understand whether the frozen foods sales decline was indeed due
primarily to lower purchase rates of the millennial generation shoppers, the
grocery chain compared the changes in the frozen foods purchases of millen-
nial and other shoppers in the last year (April 2012
March 2013, referred
84 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

to as Year 2 henceforth) versus the previous year (April 2011
March 2012,

referred to as Year 1 henceforth). The frozen foods sales change rates for
both segments are presented in Table 1. The analysis revealed that the total
frozen foods sales dropped to a similar extent for both millennial (−23.4%)
and other shoppers (−23.3%), which suggests that the sales decline in the
frozen foods category was not driven only by the millennial generation. For
both millennial and other shoppers, the largest drop in sales occurred in the
frozen appetizers, handhelds, and pizzas subcategory; the smallest sales
decline was in the frozen potatoes, vegetables, and fruits subcategory for
millennial shoppers and in the natural and organic meals for all other
shoppers.

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Breaking down the frozen foods category into the six subcategories of
interest reveals that millennial and other shoppers exhibited similar changes

hi
in their purchases behaviors in Year 2 relative to Year 1. The sales of fro-
is
zen appetizers, handhelds, pizzas (−34.5% vs. −33.9%), as well as frozen
bl
single serve entrées (−29.7% vs. −29.9%) declined at a similar rate for mil-
Pu

lennials and other shoppers, respectively. The millennial shoppers group

up

experienced a slightly lower decrease in sales of frozen meals (−28.8%) and

frozen potatoes, vegetables, and fruits (−3.4%) relative to the other shop-
ro

pers (−30.2% and −5.3% respectively). In contrast, the purchases of mil-

G

lennials in the nutritional frozen meals subcategory (−31.1%) dropped to a

d

larger extent in comparison to those of other shoppers of the chain

al

(−27.5%).
er

The subcategory in which millennial and other shoppers differed sub-

m

stantially was the natural and organic frozen meals. In this subcategory,
)E

the millennial shoppers increased their purchases by 7.4%, while other

shoppers exhibited a slight decrease in their purchases (−1.8%) during the
(C

same period. This is consistent with the industry research discussed earlier
and highlights that the natural and organic frozen meals are a subcategory
that the grocery chain might find beneficial to concentrate its marketing
efforts on in order to increase frozen foods purchases among millennial
shoppers.

Attitudinal Differences
The second key component of the grocery chain’s research efforts in under-
standing the purchase behaviors of the millennial shoppers segment
involved a customer survey which was administered to a mix of millennial
and other shoppers. This survey allowed the grocery retailer to gain
valuable insights into the primary attitudinal obstacles, as well as the major
motivations for purchasing frozen foods.
 Table 1. Case Study 1: Frozen Foods Sales Changes for Millennial and Other Shoppers (Year 2 vs. Year 1).
(C
Millennial Shoppers
)E Other Shoppers

Total sales Total sales %Δ Total sales Total sales %Δ

(April 2011
March
m
(April 2012
March (April 2011
March (April 2012
March
The Shopper-Centric Retailer

2012) 2013)
er 2012) 2013)

Frozen appetizers, $705,673 $462,350 −34.5 $526,748 $348,249 −33.9

al
handhelds,
d
pizzas G
Frozen single serve $782,789 $550,623 −29.7
ro $789,057 $557,181 −29.4
entrees
Frozen family $144,351 $102,766 −28.8 $195,946 $136,800 −30.2
up
meals
Nutritional meals $193,060 $132,939 −31.1 $189,789 $137,569 −27.5
Pu
Natural and $118,875 $127,672 7.4 $94,807 $93,292 −1.6
organic meals
bl
Frozen potatoes, $568,510 $548,903 −3.4 $582,861 $552,184 −5.3
is
veggies, fruits
hi
Total $2,513,260 $1,925,252 −23.4 $2,379,208
ng $1,825,276 −23.3
85
86 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

Retailers have begun to leverage their FSPs in a different fashion

by forming an in-house survey panel of shoppers sourced from the FSP.
For example, the retailer in this case study invites its shoppers to participate
in online consumer surveys to share their opinions on various topics of
interest. Participating households receive from one to three surveys each
month on various topics ranging from health and wellness needs to feed-
back on a new store. They are also invited to participate in focus groups or
in-home product testing. As a reward for their participation, they receive
a chance to win retailer gift cards each month. This panel enables the
retailer to gather attitudinal insights quickly, conveniently, and relatively
inexpensively.

ng
About 80% of respondents reported that they visit the frozen foods
aisle during each shopping trip. Additionally, the findings revealed that

hi
the two major reasons why millennial shoppers usually purchase frozen
is
foods are convenience and low prices. Furthermore, the survey high-
bl
lighted that millennial shoppers tend to steer away from the frozen foods
Pu

aisle because of nutrition concerns and preference to prepare and cook

up

their own meals. When purchasing frozen foods, the reported importance
of nutrition among millennial shoppers was twice that reported by other
ro

shoppers.
G

The millennial shoppers had less favorable perceptions of the frozen

d

foods category relative to other shoppers and actually felt guiltier when
al

purchasing ready-to-eat frozen meals instead of cooking their own meals

er

than other shoppers. The frozen vegetables and fruits were considered
m

less nutritious than their fresh counterparts; similarly, the frozen meals
)E

were perceived as less healthy and less tasty than meals prepared with
fresh ingredients. These perceptions, coupled with the greater interest of
(C

millennial shoppers in examining the nutritional information and having

a nutritionally balanced diet in comparison to other shoppers, represent
one of the most important reasons why millennials do not purchase fro-
zen foods or purchase frozen foods as ingredients for cooking homemade
meals. This is consistent with the insights derived from the FSP data ana-
lysis, which demonstrated that “frozen potatoes, vegetables and fruits”
were one of the subcategories with the largest share of the millennial
shoppers’ frozen foods budget while “family meals” was the subcategory
in which millennials spent the smallest percentage of their total frozen
foods dollar.
Finally, the survey results also revealed that millennial shoppers tend
to plan their purchases of frozen foods in advance and thus are less likely
than other shoppers to decide what frozen foods to buy while shopping.
The Shopper-Centric Retailer 87

This again corroborates the above findings that the millennial shoppers
use frozen foods primarily as ingredients for home-prepared meals rather
than purchasing ready-to-eat frozen meals. Additionally, this finding
highlights that in order to encourage millennial shoppers to purchase
more frozen foods, the grocery chain should consider using more out-of-
store rather than in-store promotions since this would leverage the
advance planning characteristic of the millennial shoppers when they
shop for frozen foods.

ng
Conclusions
In sum, the analysis of the frequent shopper data revealed that the

hi
decline in frozen foods sales is not driven by the millennial shoppers seg-
is
ment, but is rather a general trend among all shoppers of the grocery
bl
chain. Furthermore, the analysis also demonstrated that the purchasing
Pu

behaviors of millennial and other shoppers of the grocery chain did not
up

differ substantially with a few exceptions. That said, the survey revealed
some important differences in the millennial and other shoppers’ attitudes
ro

toward frozen foods. The primary attitudinal obstacles that the grocery
G

chain needs to overcome in order to encourage more frozen foods pur-

d

chases among millennial shoppers are the perceived unhealthiness and

al

subpar taste relative to fresh products or homemade meals. However, the

er

perception that frozen fruits and vegetables are devoid of nutritional

m

value is a general misconception. In fact, research demonstrates that fro-

)E

zen fruits and vegetables rival their fresh counterparts as sources of nutri-
ents (Rickman, Barrett, & Bruhn, 2007). Therefore, the grocery chain
(C

might wish to initiate an awareness and education campaign to correct

these misconceptions.
Furthermore, simplified nutrition scoring formats (like the ones dis-
cussed in Case Study 3) that highlight the nutritional value of frozen
foods relative to their fresh counterparts might also prove helpful in
increasing frozen food sales. The grocery chain should also leverage per-
ceived convenience and value of frozen foods, as those emerged as the
two most important motivations behind millennials’ purchases of frozen
foods. Finally, given that millennials are more likely to plan their frozen
foods purchases in advance, out-of-store promotional offers (e.g., coupons
sent via mail or email, promotional offers displayed on social media plat-
forms) offer potential in increasing the frozen foods sales among the mil-
lennial segment.
88 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

CASE STUDY 2

Background and Business Problem

In 2012, the U.S. healthy, beauty, and wellness market grew at its second
highest rate since 2007 and this growth is expected to continue for the
following several years (Euromonitor, 2013). In order to take advantage of
this opportunity, the focal grocery chain decided to remodel the healthy,
beauty, and wellness sections in four stores and examine whether this
would increase store traffic and average basket size. The grocery retailer
believed that it could tap into the convenience needs of its shoppers and

ng
become a “one-stop shop,” thus giving it a competitive advantage com-
pared to alternative formats such as drug stores and specialized health and

hi
beauty stores. The remodeling initiative was a test-and-learn practice
is
bl
designed to inform future managerial decisions regarding potential remo-
Pu
deling of other stores in the chain.
The healthy, beauty, and wellness product category includes hair and
up

skin care products, make-up, medications, vitamins and nutrition products,

diet products, soaps, deodorants, and eye care, with hair and skin care pro-
ro

ducts being the largest contributors to sales for the grocery chain. The
G

healthy, beauty, and wellness section remodel of the four stores represented
d

a major overhaul in the physical appearance of the section, a wider variety

al

of products, additional personnel, and a variety of new services and pro-

er

grams. For example, the newly remodeled healthy, beauty, and wellness sec-
m

tions are characterized by attractive décor pleasing to the senses, wider

)E

aisles, and wood flooring that stimulate more browsing of the available
products, better lighting, as well as beautiful displays and signage to draw
(C

the shopper. Importantly, the remodeled healthy, beauty, and wellness

departments offered an increase in product assortment and introduced very
upscale, “salon” items, including premium hair care, cosmetics, and make-
up products. Personnel were added, including nutritionists and dietitians,
make-up and beauty experts, and wellness coaches. Several health and well-
ness services and programs were added, including a diabetes care program,
health library, expert opinions, free mini-facials, wellness recipes, and a
large variety of educational classes.
One year after the healthy, beauty, and wellness section remodeling took
place in the four stores, the grocer was interested in assessing its effect on
sales. They were further interested in examining whether certain healthy,
beauty, and wellness subcategories experienced a greater lift in sales after
the remodel than others, as well as the relative role of existing items versus
The Shopper-Centric Retailer 89

the new upscale items and the response of different shopper segments to
this remodeling initiative. The grocery retailer turned to its FSP data to
answer these questions. A detailed discussion of their analytical approach
and major findings is presented in the following section.

Analytical Approach and Findings

The grocery chain used the loyalty card data for the shoppers of the four
healthy, beauty, and wellness remodeled stores (called test stores hence-
forth) and compared the test stores against a matched sample of four other

ng
control stores of similar size and with similar shopper demographics. The
frequent shopper data included all purchases by the stores’ shoppers for

hi
one year before the healthy, beauty, and wellness remodeling initiative
is
(called pre-remodel period henceforth) and one year after the remodeling
bl
initiative (called post-remodel period henceforth).
Pu

First, the grocery retailer examined the change in the total sales in each
up

of the four test stores in the post- versus the pre-remodel period for the
panel. Fig. 3 shows the total annual store sales for shoppers in the panel in
ro

the four test stores in both the pre- and post-remodel periods. The results
G

suggest that all four stores experienced strong growth in consumer spend-
d

ing in the healthy, beauty, and wellness category. The sales lifts ranged
al

from 13% in Store A to 50% in Store D.

er
m
)E

$4.5 $4.20
$4.0 $3.71
(C

$3.5
$3.0
$2.5 $2.35
$1.98
$2.0 $1.79
$1.47
$1.5 $1.28
$0.98
$1.0
$0.5
$0.0
Store A Store B Store C Store D
Pre-Remodel Post-Remodel

Fig. 3. Case Study 2: Total Annual Store Sales in Test Stores (Pre- vs. Post-
Remodel Period; in million $).
90 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

Furthermore, a comparison with the sales changes in the control chain

stores during the same two-year period (Fig. 4) reveals that remodeled
stores significantly outperformed the control stores. The stores in which the
healthy, beauty, and wellness sections were remodeled evidenced between
three and six times greater sales growth that the control stores. This clearly
suggests that the undertaken healthy, beauty, and wellness remodeling
initiative was highly successful in increasing the stores’ total sales.
Second, the grocery retailer conducted a healthy, beauty, and wellness
subcategory sales lift analysis to assess whether the healthy, beauty, and
wellness section remodel benefited certain subcategories to a larger extent
than others. The analysis demonstrated that the largest percentage increase

ng
in sales in the post-remodel period was observed in the cosmetics category
(62.7%), followed by skin care products (40.9%), and vitamins (23.8%). In

hi
contrast, analgesics and cold remedy products experienced the smallest per-
is
centage sales increases of 0.2% and 1.9%, respectively. In addition, Table 2
bl
shows the average percentage increase in total dollar sales in the test stores
Pu

for both standard and premium products in each of the subcategories. On

up

average, premium products had a larger sales lift in the post-remodel per-
iod than standard products. For instance, the standard skin care products
ro

sales increased by 26%, while the sales of premium skin care products
G

increased by 1094%. Similarly, the standard hair care products sales rose
d
al
er

55%
m

50%
50%
)E

45%
40%
(C

40%
35%
30%
25%
19%
20% 17%
15% 13%
9%
10%
5% 2% 3%
0%
Store A Store B Store C Store D
Store Control

Fig. 4. Case Study 2: Total Sales Lift (Post-Remodel vs. Pre-Remodel) in Test and
Control Stores.
The Shopper-Centric Retailer 91

Table 2. Case Study 2: Average Percentage Increase in the Total Dollar

Sales in the Test Stores in the Healthy, Beauty, and Wellness Categories.
Standard Products (%) Premium Products (%)

Soaps 20

Analgesics −1 1,554
Cosmetics and cotton 48 2,038
Skin care 26 1,094
Stomach 6 1,880
Cough and cold 7 326
Deodorants 22

Feminine hygiene 8

Eye care 21

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First aid 21 1,359

hi
Hair care 18 2,176
Men’s toiletries 18 10,659
Oral hygiene 19
is

bl
Vitamins 24 52,048
Pu
Diet nutrition 53 4,619

indicates that there were no premium products sales in the category in the pre-remodel
up

period.
ro
G

by 18% and the premium hair care products sales increased by 2176%.
d

This highlights that the remodeling initiative was more beneficial to pre-
al

mium product sales as the remodeled upscale in-store environment prob-

er

ably prompted shoppers to browse and consider the premium products in

m

the healthy, beauty, and wellness aisle.

)E

Finally, the grocery store used the demographic information collected

as a part of its FSP and its segmentation data to evaluate whether there
(C

were differences in how different groups of shoppers responded to the

remodeling initiative. Since the premium categories experienced the high-
est lift in sales in the post-remodel period, Fig. 5 demonstrates the break-
down of the sales in the top five healthy, beauty, and wellness premium
categories by age (Exhibit A) and income (Exhibit B). The results indi-
cate that shoppers in the 48
57 years age group, as well as those with
relatively high total household income ($125,000
134,999) spent the most
in the top 5 premium healthy, beauty, and wellness categories in the
post-remodel period. Finally, the segment analysis revealed that two of
the chain’s segments
loyal moms and loyal adults without children
(which account for 35% of the chain’s total customer base)
exhibited
the highest growth in total spending in the post- versus the pre-remodel
period, namely 46% and 26%.
92 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

(A) 40
Cosmetics Premium
35
Dollar Sales (in 000s)

30 Hair Care Products

Premium
25
20 Skin Care Products
Premium
15
Vitamins Premium
10
5 Diet Products
Premium
0
18–27

28–37

38–47

48–57

58–67

68–77

78–87

88–97

98–107

ng
(B) $30

hi
is
Cosmetics Premium
$25 bl
Dollar Sales (in 000s)

Diet Products
Pu
$20 Premium

Skin Care Products

up

$15
Premium
ro

$10 Vitamins Premium

G

$5 Hair Care Products

d

Premum
al

$0
er

125,000–134,999

155,000–164,999

185,000–194,999

225,000–234,999

245,000–254,999
15,000–24,999

25,000–34,999

35,000–44,999

45,000–54,999

55,000–64,999

65,000–74,999

85,000–94,999
5,000–14,999

m
)E
(C

Fig. 5. Total Sales in Top 5 Premium healthy, beauty, and wellness Categories in
the Post-Remodel Period. (A) Exhibit A: Breakdown by Age. (B) Exhibit B:
Breakdown by Income.

In sum, this case study demonstrates the potential of using frequent

shopper data analysis as a valuable component in evaluating the effect of
store environment changes and section remodels. The overall sales analysis
indicated that the healthy, beauty, and wellness section remodeling was a
promising initiative because the remodeled stores experienced significantly
stronger sales growth than control stores of similar size and in comparable
locations. Furthermore, the subcategory sales analysis revealed the healthy,
The Shopper-Centric Retailer 93

beauty, and wellness subcategories which benefited the most from the remo-
deling initiative which would prove valuable to the retailer’s management in
determining the categories in which to increase the product assortment first,
given that introducing premium products in all healthy, beauty, and well-
ness subcategories might not be viable at the same time. Finally, the seg-
ment and demographic analysis proved quite helpful to the grocery chain in
determining which of its stores to remodel next, as well as which segments
on which it should focus its healthy, beauty, and wellness promotional
efforts.

ng
CASE STUDY 3

hi
is
Background and Business Problem
bl
Pu

The health and wellness team at a major grocery chain realized that
up

shoppers were struggling with understanding the large amount of infor-

mation reported on products’ nutritional labels and that even if shoppers
ro

were interested in improving their diets, the current in-store environments

G

were not conducive to helping them achieve this goal. Feeling it was
d

appropriate and supported their efforts to be good corporate citizens and

al

aligned with other efforts to assist with health, the grocery retailer
er

decided to implement a simplified nutrition scoring system (developed by

m

a team of medical and nutrition experts) in all of its stores in an effort to

)E

help its shoppers make healthier food choices. In sum, the grocery retai-
ler identified a potential shopper need and interest in simplified nutrition
(C

information at the point of sale, launched a large-scale scoring program

to meet this need, and was ultimately interested in evaluating the success
of the initiative (for a detailed description see Dzhogleva Nikolova, &
Inman, 2014).
The nutrition scoring system used by the grocery chain computes a
summary nutrition score for each stock keeping unit (SKU) based on the
food nutrient content as well as each nutrient’s association with different
health conditions (e.g., heart disease, diabetes). The nutrition scores range
from 1 to 100, such that higher scores signify more nutritious foods. The
nutrition scores were introduced in the stores across different product cate-
gories at various points of time during 2008
2009 and prominently dis-
played on the shelf pricing tags. Essentially, the nutrition scoring system
summarized all the pertinent nutritional information and delivered it to
94 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

shoppers in a simple and easy-to-process format at the point of sale to help

them more readily discover nutritious options.
The grocery chain anticipated that facilitating the understanding of
nutritional information through the point-of-sale nutrition scoring system
should be effective in promoting healthier food choices because past
research has shown that the complexity of understanding nutritional
information has impeded consumers from making smarter food choices.
For instance, Cohn et al. (2012) report that point-of-purchase calorie
postings in restaurants are not effective in encouraging consumers to
embrace healthier eating because consumers find it difficult to compre-
hend and use the provided information. In a related vein, researchers

ng
have argued that in order for nutritional information to be incorporated
into consumers’ decisions, it does not have to be only available at the

hi
point of purchase but also easily “processable” (Bettman, 1975; Russo,
1975; Russo et al., 1986).
is
bl
The grocery chain realized that although the nutritional labels mandated
Pu

by the Nutritional Labeling and Education Act (NLEA) made the nutri-
up

tional facts available on the food packaging, the shopper still has to exam-
ine and understand the many types of nutrients reported on the nutritional
ro

label (e.g., cholesterol, sodium, dietary fiber), as well as combine all the
G

information into one overall evaluation of how healthy or unhealthy the

d

product is. In contrast to the NLEA-mandated Nutrition Facts panel,

al

the point-of-sale nutrition scoring system essentially “does all the hard
er

work” by distilling all the nutritional information into one number, helping
m

shoppers spot nutritious products at a glance as well as easily compare the

)E

nutritional content of different alternatives. The retailer thus expected that

the simplified point-of-sale nutrition scoring system should prove helpful in
(C

allowing shoppers to easily identify more nutritious options.

After the implementation of the nutrition scoring system, the grocery
chain was interested in assessing its effectiveness in encouraging consu-
mers to make healthier food decisions, as well as examining its impact on
category sales. To achieve those objectives, they took advantage of the
purchase data captured by their FSP, which includes several million
households. The grocery chain had previously used their FSP data to
assist in assortment, positioning, and promotional decisions, as well as to
deliver relevant offers to shoppers through various in-store and online
channels. For the purpose of this project, the FSP data were supplemen-
ted with data on the nutrition scores of each universal product code
(UPC), as well as data on the rollout dates of the nutrition scores in
each product category.
The Shopper-Centric Retailer 95

Analytical Approach and Findings

Eight different product categories were selected for use in the analysis. The
categories were: frozen pizza, tomato products, soup, salad dressing, yogurt,
spaghetti sauce, granola bars, and ice cream. The nutrition scores were
implemented at different points of time during 2009 (see Table 3). However,
the release dates of the nutrition scores in the eight categories varied in
terms of its specificity: the introduction dates for six of the categories were
more specific and indicated the release month (e.g., April 2009), while the
dates for the remaining two categories (yogurt and granola bars) only
indicated the release quarter (e.g., first quarter of 2009). The grocery chain

ng
took advantage of the natural quasi-experiment arising from the implemen-
tation of the point of sale (POS) scoring system and compared shoppers’

hi
purchases during the six months before the POS nutrition scoring
is
system implementation and the six months following its implementation.
bl
The 6-month pre- and post-implementation periods were defined using the
Pu

rollout date of the nutrition scores in each category. In the yogurt and gran-
up

ola bars product categories where information regarding the exact month of
release was not available, the pre- and post-rollout periods were defined as
ro

the six months before and the six months after the quarter in which the
G

scores were implemented (see Table 3).

d

The grocery chain utilized its frequent shopper data, and extracted the
al

purchase history of a sample of 500,000 shoppers. These data included

er

each shopper’s purchases weekly dollar and unit sales of each SKU in each
m
)E

Table 3. Case Study 3: Nutrition Scores Release Dates, Pre-Rollout and

(C

Post-Rollout Periods.
Scores Pre-Rollout Period Post-Rollout Period
Release Date

Frozen pizza August 2009 February 2009
July 2009 September 2009
February

2010
Tomato products August 2009 February 2009
July 2009 September 2009
February
2010
Soup July 2009 January 2009
June 2009 August 2009
January 2010
Salad dressing June 2009 December 2008
May 2009 July 2009
December 2009
Yogurt Q1 2009 July 2008
December 2008 May 2009
October 2009
Spaghetti sauce April 2009 October 2008
March 2009 May 2009
October 2009
Granola bars Q1 2009 July 2008
December 2008 May 2009
October 2009
Ice cream June 2009 December 2008
May 2009 July 2009
December 2009
96 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

of the eight categories during the six months before the POS nutrition scor-
ing system implementation, as well as their weekly SKU purchases during
the six months following its implementation. The data contained more than
38 million purchases across the eight categories. The dataset included key
purchase variables: the week in which the purchase was made, the anon-
ymized ID of the shopper making the purchase, the total number of units
bought, and the total dollar amount paid by the shopper, as well as the size
of the product (in ounces). The frequent shopper data was merged with
a dataset containing the nutrition score for each UPC in each the eight
product categories. The resulting dataset allowed the grocery retailer to use
the nutrition scores of shoppers’ purchases as an intervention and thus

ng
compare their food selections in the pre-rollout versus the post-rollout
periods.

hi
First, in order to examine the change in the nutritional score value of
is
shoppers’ purchases resulting from the implementation of the POS nutri-
bl
tion scoring system, the grocery retailer constructed a volume-weighted
Pu

average of the nutrition score of each shopper’s purchases in the six-month

up

pre- and post-rollout periods. The volume-weighted average nutrition score

was calculated using the following formula:
ro
G

Volume-weighted nutrition score

P
ðNumber of units purchasedipt × Package sizep × Nutrition scorep Þ
d

= P
al

ðNumber of units purchasedipt × Package sizep Þ

er
m

where
)E

Number of units purchasedipt = the total number of units purchased by

(C

shopper i of product p in week t

Package sizep = the package size of product p (in ounces)
Nutrition scorep = the nutrition score of product p.

The above formula was used to determine the volume-weighted average

nutrition score of each shopper’s purchases in the pre-rollout period and to
compute the volume-weighted average nutrition score of each shopper’s
purchases in the post-rollout period. This allowed the grocery chain to
compare the nutritional score value of shoppers’ purchases after the
implementation of the point-of-sale scoring system versus the nutritional
score value of shoppers’ purchases before the nutrition scores were made
available in the stores.
Each category’s volume-weighted nutrition scores in the pre-rollout
and post-rollout periods are presented in Table 4. Fig. 6 shows the average
The Shopper-Centric Retailer 97

Table 4. Case Study 3: Average Volume-Weighted Nutrition Score

(Post-Rollout vs. Pre-Rollout Period).
Average Volume-Weighted Nutrition Score

Pre-rollout period Post-rollout period

Frozen pizza 15.13 16.78

Canned tomatoes 74.20 78.95
Canned soup 33.36 56.11
Salad dressing 4.03 4.53
Yogurt 79.05 91.70
Spaghetti sauce 56.04 59.57
Granola bars 25.01 31.14

ng
Ice cream 20.29 26.28

hi
is
75.0% 68.2%
bl
Pu
65.0%
55.0%
up

45.0%
ro

35.0% 29.5%
24.5%
G

25.0%
16.0%
12.4%
d

15.0% 10.9%
6.3% 6.4%
al

5.0%
er

–5.0%
m
g
a

up

s
am

rt
in
zz

uc

oe

ar
)E

gu
So
ss

B
Pi

re

Sa

at

Yo
C

re

a
m
n

l
e-

tti

no
ze

ne
D

To
Ic

he
o

d
(C

an

ra
Fr

la

ag

G
C
Sa

Sp

Fig. 6. Case Study 3: Percentage Change in Shopper’s Average Volume-Weighted

Nutrition Score (Post-Rollout vs. Pre-Rollout Period).

percentage changes in the volume-weighted nutrition score of shoppers’

purchases in the post-rollout period relative to the pre-rollout period. On
average across the eight product categories, shoppers significantly increased
the nutritional score value of their purchases by about 22%. The biggest
improvements were observed in the canned soup category (68%), followed
by ice cream (29%) and granola bars (24%). The spaghetti sauce (6%) and
tomatoes (6%) categories exhibited the smallest, but still significant
increase in nutritional score value from the eight analyzed product
98 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

categories. Thus, these results clearly demonstrate that the simplified point-
of-sale nutrition scoring system was effective in helping shoppers to select
healthier foods. The nutrition score value of shoppers’ purchases after the
scoring system introduction was significantly greater than before the scores
were available.
Second, the grocery retailer examined an alternative positive change in
behavior resulting from the introduction of the nutrition scoring system

paring down the purchase volume of unhealthy products. For example, if
consumers do not steer away from the unhealthy foods after the introduc-
tion of the nutrition scoring system, they might still improve their eating
behaviors in an alternative way by decreasing the number of units that they

ng
buy. In other words, an individual who used to buy three gallons of ice
cream per month before the nutrition scoring system implementation might

hi
not switch to a healthier brand of ice cream, but rather decide to have only
is
one gallon of their favorite ice cream. In line with these expectations, the
bl
grocery retailer found that the changes in shoppers’ equivalized volume
Pu

(total number of units purchased × package size in ounces) between the

up

post- and pre-rollout periods were dependent on the nutrition content

changes exhibited by each shopper.
ro

Specifically, shoppers who switched to healthier alternatives and thus

G

increased the average nutrition score value of their purchases increased

d

their purchase volume by approximately 34 ounces on average. In con-

al

trast, shoppers who did not change their purchase behaviors or even
er

switched to less healthy alternatives increased their purchase volume by

m

only 28 ounces on average (a difference of 6 ounces). This suggests that

)E

shoppers who did not change or even decreased the nutrition content of
their food choices compensated for that by monitoring their purchase
(C

volume.
Finally, the grocery retailer was also interested in evaluating the
impact of the nutrition scoring system sales in each category. Table 5
shows the percentage change in total dollar sales in each category
between the post-rollout and the pre-rollout period. In most of the cate-
gories, total sales increased after the launch of the nutrition scoring sys-
tem. Yogurt, granola bars, and canned soup were the three categories
with the largest increase in total sales: 73%, 66%, and 28%, respectively.
The only three categories that experienced a decline in sales were tomato
products (−18%), salad dressing (−12%), and spaghetti sauce (−5%).
This might be due to the fact that shoppers might have not switched to
healthier alternatives within the category but might have switched to
healthier substitutes in other categories. In sum, the sales analysis
The Shopper-Centric Retailer 99

Table 5. Case Study 3: Percentage Change in Total Dollar Sales (Post-

Rollout vs. Pre-Rollout Period).
Category Percentage Change in Total Dollar Sales (%)

Frozen pizza 0.4

Tomato products −18.3
Soup 28.2
Salad dressing −11.6
Yogurt 73.1
Spaghetti sauce −4.8
Granola bars 66.2
Ice cream 7.0

ng
hi
highlights the fact that the implementation of the nutrition scoring system

is
was a win-win solution for both shoppers and the grocery retailer, as it
bl
helped shoppers make healthier food choices and at the same time had
Pu
an overall positive impact on the chain’s sales.
up
ro

CONCLUSIONS
G
d

In this chapter, we have argued that FSP can be a fertile source of insights
al

for retailers. We presented three case studies that illustrate how FSP data
er

can be brought to bear on important business issues. In Case Study 1, we

m

described how a grocery chain used its FSP data to understand the beha-
)E

vioral and attitudinal differences between shopper segments. Specifically,

the retailer used its FSP data to examine millennial shopper’s purchase
(C

behavior in six key sub-segments in the frozen foods category and compare
it to that of other shoppers. The retailer also fielded a survey to an online
panel that it has created from its FSP members to assess and compare the
underlying attitudes of millennial shoppers versus other shoppers. The
resulting triangulation of findings enabled the retailer to refocus its assort-
ment and marketing communications to millennials to increase share to
this critical segment.
Case Study 2 demonstrated the use of FSP data as a key element of a
test-and-learn initiative designed to inform future managerial decisions. A
grocery retailer remodeled the healthy, beauty, and wellness sections of
four test stores and relied on its FSP data to assess the effect of the
remodeling initiative on sales, as well as examine any potential differences
in the sales changes among different product types, subcategories, and
100 HRISTINA DZHOGLEVA NIKOLOVA ET AL.

shopper segments. The FSP data analysis revealed that the healthy,
beauty, and wellness sections remodeling was a promising initiative, as
the remodeled stores experienced significantly stronger sales growth than
control stores of similar size and in comparable locations; furthermore,
the data analysis also informed future managerial decisions regarding
store locations, product subcategories, and shopper segments that would
benefit the most from such healthy, beauty, and wellness remodeling
efforts.
In Case Study 3, a grocery chain launched a large-scale nutrition scoring
system in its stores to meet customers’ need for simplified and easy-to-
understand nutritional information at the point of sale. The grocery chain

ng
used its FSP data to assess the effectiveness of the nutrition scoring system
in encouraging consumers to make healthier food decisions, as well as its

hi
impact on the chain’s sales. The analysis highlighted that the implementa-
is
tion of the nutrition scoring system was a win-win solution for both
bl
shoppers and the grocery retailer as it helped shoppers make healthier food
Pu

choices and at the same time increased the chain’s sales primarily of the
up

high-scoring, more nutritious products.

We also believe that FSP data can be a boon to academic research.
ro

For some reason, it has been underutilized in that regard. The work by
G

Hoch and his colleagues with the Dominicks grocery chain in Chicago
d

(e.g., Dhar & Hoch, 1996; Dreze, Hoch, & Purk, 1995; Hoch, Dreze, &
al

Purk, 1994) should have paved the way for academic
retailer collaboration,
er

but such partnerships have waned. Recently, the partnership between the
m

Tops grocery chain and the University of Buffalo has yielded several inter-
)E

esting research articles (e.g., Talukdar, Gauri, & Grewal, 2010; Talukdar &
Lindsey, 2013).
(C

We hope that this chapter sets the stage for a renewed interest on the
part of academics and retailers in collaborating. As retailers continue
to innovate, such as adding near field communication technology, radio fre-
quency identification (RFID) technology, facial recognition tools, and
mobile marketing capabilities, the store may well become Ground Zero for
testing and assessing the shopper-technology interface. Partnerships
between academics and retailers and their data management vendors can be
a powerful tool to cost-effectively extract cutting-edge insights. Academics
bring extensive skills, behavioral theories, and empirical modelling, while
retailers and their data management vendors bring a rich set of important
shopper-centric business issues, and most importantly, the FSP necessary to
address them.
The Shopper-Centric Retailer 101

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bl
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Pu
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euromonitor.com. Accessed on November 17.

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