Data: the Weapon of Choice in the War of Supermarkets

Woolworths and Coles ‘secret weapon’ in supermarket war against Aldi is… data

The battle for supermarket dominance between Woolworths, Coles and Aldi is being fought on many fronts- however, according to Credit Suisse analysis, data is the secret weapon that could ultimately win them the war.

A report published in The Age is based on the work of Credit Suisse analyst, Grant Saligari who published the full report earlier this week.

Currently, Woolworths and Coles command an 80 per cent share of the market, and continue to invest heavily in artificial intelligence and data analytics to make sure this doesn’t change. The data collected is then used to form the bedrock of their loyalty programs, and for use on their apps and websites to target a consumer more effectively with a product they’re likely to be interested in- and purchase.

“At a basic level, supermarkets can use customer data to target shoppers with emails highlighting that products they have bought before are on discount,” writes The Age’s Patrick Hatch.

Hatch continued to explain that this “will become more sophisticated over time, Ms Saligari said, with the ability to offer discounts or special offers to customers they know are sensitive to price, while charging full prices to customers who will buy the same product whether it is on sale or not.”

Analyst and author of the report, Grant Saligari said that “allocating expenditure to intermittent shoppers that are likely to switch a purchase from a competitor would likely be a better use of promotional expenditure than a similar promotion to a loyal customer.”

“The respective rewards and fly buys programmes of Woolworths and Coles provide an unmatched capability to engage with customers on a unique basis,” he said. It also stands to reason that the established giants - Woolworths and Coles - have an advantage of relatively new arrival Aldi, considering the vast amount of consumer data they are already sitting on.

This helps them, according to Saligari to snatch customers from Aldi, independent supermarkets and other competitors who do not harvest and leverage data to the same extent.

“When linked to vast transaction volume through their stroes and digital properties… provide an almost unprecedented amount of transactional data to leverage through a growing AI analytical capability.”

According to the report, from each $1 spent by a consumer, 20-cents of that dollar is spent by brands and supermarkets alike to promote that product; investments in machine learning and more effectively utilising data collected would bring in millions of added revenue.

Featured Posts
Recent Posts
Search By Tags
Follow Us
  • YouTube Best Practice Icon
  • LinkedIn Social Icon
  • Facebook Basic Square
  • Instagram Social Icon
  • Twitter Basic Square

© 2020 by Best Practice

  • White YouTube Icon
  • White LinkedIn Icon
  • White Instagram Icon
  • White Facebook Icon
  • White Twitter Icon