How Whole Foods leverages data analysis

Dive Brief:

  • Whole Foods Market partnered with Dunnhumby to improve the company’s loyalty program and optimize its store-level product assortments, according to Supermarket News.
  • Although the natural and organic retailer started piloting a points-based rewards program in the Philadelphia market in 2015, it phased that program out.
  • Dunnhumby already provd its expertise with its joint venture with Kroger Co., establishing its acclaimed loyalty program more than a decade ago.

Dive Insight:

Whole Foods’ partnership with Dunhumby signals a move towards optimizing product ordering and merchandising through customer data and predictive technology, and loyalty is just one part of the equation. The data company is also playing a role in the retailer's implementation of category management.

Kroger offers real-time recommendations to customers thanks to analytics put in place by its partnership with Dunhumby, and exhibits a similar company strategy — one that has already been successful for a decade.

Whole Foods will use the data that Dunhumby delivers to optimize its product assortments at the store level and better understand offerings that lead to increased purchases for each individual customer — such as price, promotion and selection.

The retail chain already began testing a loyalty program in Dallas and found that rewards program members spend a great deal more than those not enrolled, with a more than 50% difference in total sales. Connecting this program to data will further enhance that.

This investment is in response to Whole Foods' struggle to attract new customers. The natural foods retailer is now focusing on its most loyal customers with data-rich category management that can reveal what these consumers want. This allows Whole Foods to better leverage its product offerings and better tailor targeted promotions, which should increase the grocer's efficiency. 

Follow on Twitter

Filed Under: Grocery Corporate
Top image credit: Flickr user pheaber