Will Dunnhumby’s analytics do for Whole Foods what it did for Kroger?
The last few years have seen Kroger strengthen its position as the top supermarket chain in the U.S. while Whole Foods has taken its hits. As it struggles to regain ground, Whole Foods is forming a relationship with the analytics company generally associated with making Kroger such a success.
Whole Foods has brought on analytics provider Dunnhumby in an effort to better assess and meet shopper needs, the Cincinnati Business Courier reported. This comes in the wake of Kroger’s success with, and partial acquisition of, Dunnhumby. In 2015, Kroger acquired a chunk of the U.S. wing of the analytics company and spun it off under the moniker, 84.51, leaving the rest of the enterprise to continue doing business with other companies.
Around the time Kroger acquired the company, people were calling Dunnhumby’s analytics the “secret sauce” behind the grocer’s success. That is a secret sauce that Whole Foods could use, given its six consecutive quarters of same-store sales declines, as reported by Fortune.
In the past year, Whole Foods has taken numerous steps to try to get things back on track. To streamline processes, management has shifted buying authority from local buyers to headquarters-based category managers. The chain brought on marketing firm MediaCom to handle its national media strategy. It announced the rollout of a nationwide loyalty program. And it has begun to source prepared foods from external vendors making products based on Whole Foods’ recipes, rather than preparing fresh offerings at store-owned kitchens.
While the impact of these moves remains to be seen, some believe the Dunnhumby relationship could effectively inform a few of the new strategies, as reported in Supermarket News. The article suggests that both the loyalty program and the new category management initiative could take successful cues from Dunnhumby’s data insights.
Whole Foods has also made significant management changes. Towards the end of 2016, the company parted ways with Co-CEO Walter Robb, a 25-year veteran who had been in the role for six years, during which time he was instrumental in the chain’s expansion.
- Dunnhumby signs deals with Kroger rival – Cincinnati Business Courier
- Kroger buys big chunk of DunnhumbyUSA, changes name – Cincinnati Business Courier
- How price competitive does Whole Foods need to be? – RetailWire
- Will one CEO be better than two for Whole Foods? – RetailWire
- Will Whole Foods stay fresh using outside suppliers? – RetailWire
- Dunnhumby seen enhancing Whole Foods merchandising, loyalty – Supermarket News
DISCUSSION QUESTIONS: How much have customer analytics been responsible for Kroger’s success in recent years? How likely is it that analytic insights will fix what ails Whole Foods?