The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...

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The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...
The 2019 Australian Grocer
Retailer Preference Index (RPI)
The battle for the modern grocery shopper. Woolworths edges out
Coles, but watch out for Aldi.
The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...
CONTENTS
    I. Executive summary......................................................................... 3

    Ii. Introduction and context............................................................... 4

    Iii. The RPI and its methodology....................................................... 5

    Iv. Rankings and top findings............................................................ 6

    V. A closer look at Aldi..................................................................... 18

    Vi. Key takeaways............................................................................. 21

2                                                                       © 2019 dunnhumby         Australia Retailer Preference Index
The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...
I. Executive summary
In a first-of-a-kind study -- The Australian Grocer Retailer Preference Index (RPI) -- dunnhumby conducted research on Customer
preference for grocery retailers. The report, modeled after a series of studies that dunnhumby has conducted in the US, takes a
snapshot of Customer preference for grocery retailers as well as the various levers retailers can pull to improve their rankings over
time. The key takeaways in this study, which looks at five prominent Australian retail grocers:

       1                   In this first RPI for Australia, Woolworths narrowly edges out Coles for the number-one position in
                           customer preference. But Aldi -- the global grocery retail discounter -- looms not far behind.

       2                   There are five primary Customers preference drivers (pillars) that the study correlates to emotional
                           connection (long-term brand equity) and financial performance.

       3                   Despite all the pressure retailers are facing around price, “value perception” – which is about both price and
                           quality – is what drives financial performance.

                           That said, price has become more important – it equals emotional connection, a critically outcome of
       4                   Customer preference. Price correlates closely with trust and other emotional attributes. These attributes
                           provide an emotional connection for Customers that ensures they are attracted and stay over the long term.

       5                   Store catalogues still play a key role in Customer pre-store influencers. This suggests that Customers are
                           creating their own consistent weekly shopping spend by cherry picking/budgeting across all retailers.

       6                   Everyone shops everywhere: There is very little loyalty between retailers, even those whose primary shop
                           was Coles and Woolworths still claimed one third of their shopping was also in Aldi.

                           The retail landscape is changing – both globally and in Australia. Aldi is shifting the price expectations
       7                   making Customers more price sensitive and aware than ever before. This is paving the way for more potential
                           entrants into the discount space.

1
 See section III. The RPI correlates Customer preference with emotional connection and financial performance. Most studies have looked at these
variables separately. Note, however, that dunnhumby has conducted similar studies. For example, dunnhumby has been conducting Customer
Centricity Index (CCI) studies since 2015 based on an earlier version of a model for measuring customer preference. The RPI is an evolved version of
the CCI using a more advanced model.
2
    The research guiding the RPIs takes note of global macroeconomic trends that have led to the reality today: shoppers are increasingly price sensitive.

3                                                                             © 2019 dunnhumby        Australia Retailer Preference Index
The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...
II. Introduction and context

A recent article in the Sydney Morning Herald commenced with this headline: “Coles and Woolies’ secret weapon in war with Aldi is
Data.” As dunnhumby completed its first RPI for the Australian market, the article resonated with its researchers. Australian grocers
-- as is true in other geographies throughout the world -- are facing intense pressure from sophisticated e-commerce leaders and
discounters who are growing market share not just based on price but other factors that shape public perception, and ultimately
preference. As the article in the Herald argues, there is a new normal in modern retail: the opportunity and obligation to leverage
Customer Data -- beginning with “first-party Customer Data” -- to more effectively engage and retain Customers today. But that’s just
part of the journey for retailers. The goal is to develop a unique strategy based on that Data in order to more effectively compete for
mindshare and marketshare. Strategy based on Customer Data can help retailers combat:
• Short-term and long-term trends that are disrupting the retail market
• The competitive threat from retailers focused on perceived value (not just price)
• The evolution of the modern shopper who increasingly is more value-aware
• The threat from e-commerce giants that are moving about the globe with new strategies for integrating digital channels with brick
  and mortar
• The continuing challenge of predicting future challenges to retailers that are emerging faster in other geographies but that might
  soon become real in Australia.
As noted, this is the RPI in Australia. But it has been largely informed by both local and global trends that are likely to impact
Australian grocery businesses. Understanding the levers that can be pulled in order to compete is critical, and more than ever
Customer Data -- which is now becoming democratized -- can help retailers craft a unique strategy for winning and retaining the
modern Customer.

3
 Around the globe, the media has been chronicling the so-called retail apocalypse, noting volatility pressure on stock prices, store closures, and
bankruptcies. See Section VII for resources on recent retail trends.

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The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...
III. The RPI and its methodology
As a template for measuring Customer preference, the RPI originated in the U.S. in early 2018. It is widely regarded as an original
approach to understanding what drives Customer preference in the grocery sector, and the Data-based tools that can be leveraged
to improve Customer preference. The Australian Grocery RPI applies a focused lens by looking at the five national Australian grocery
retailers -- Woolworths, Coles, Aldi, IGA, and 7-Eleven -- based on how well they are meeting their Customer needs today. The study
included 1,500 individual respondents -- resulting in 3,900 unique retailer evaluations -- factoring age, state, and family composition.
There are a number of ways the RPI can be used to develop effective grocery retail strategy. But our chief goal was to answer four
core questions:
+What drives retailer preference among Australian shoppers?
+Which retailers are winning or losing?
+Why are they winning or losing?
+What can retailers do to improve emotional connection and financial performance?
The methodology we applied in the RPI is to correlate a retailer’s preference driver scores (convenience and quality; easy shopping
experience; price; operations; drive time) with their emotional connection with Customers (satisfaction; likelihood to recommend;
trust; intensity of attachment) and financial performance (share of visits).
This correlation is what makes the RPI unique, and what could help retailers more effectively compete for Customers today. In
addition, a stretch goal for the RPI is to deliver a dependable, standardized reference point for emotional connection (long-term brand
equity) and financial performance to see how they fare among their peers globally. It would enable retailers everywhere to learn from
one another, and develop strategies that are driven by both current challenges and value in the future for their Customers.

                                                                                                    RPI

                  PREFERENCE                                             EMOTIONAL                                 FINANCIAL
                    DRIVERS                                              CONNECTION                              PERFORMANCE

             Convenience & Quality                                        Satisfaction                            Share of Visits
                 Easy Shopping                                            Likelihood to
                  Experience                                              recommend
                       Price                                                  Trust
                    Operations                                     Intensity of attachment
                    Drive time

5
 See, e.g., “New ‘Retailer Preference Index’ Puts Trader Joe’s, Costco and Amazon at the Top.” https://progressivegrocer.com/new-retailer-preference-
index-puts-trader-joes-costco-and-amazon-top.
6
 While 7-Eleven is a different shopping mission front the other retailers – i.e., convenience – we kept in for comparison and to qualify the report’s
accuracy (it scores highly where you expect it to and low where you’d expect.).

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The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...
IV. Rankings and top findings
A. Rankings
There are five primary Customer preference drivers -- or “pillars” -- in Australia that we correlated to emotional connection and
financial performance. In order of importance among Australian shoppers they are:
Convenience and quality
Easy shopping experience
Price
Operations
Drive time
In the rankings, Woolworths comes in just ahead of Coles. But the “race,” so to speak, may be too close to call. Aldi comes in third (the
“dark horse” in the race”)7, but its growth in recent years suggests they might be closing the gap. IGA and 7-Eleven are currently trailing
(on weak perceived value propositions).

                  Woolworths                   Coles               Aldi                     IGA                        7Eleven

7
    See section V for a closer look at Aldi.

6                                                                   © 2019 dunnhumby       Australia Retailer Preference Index
The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...
B. Customers want convenience & quality and easy shopping experience. They also want to shop in as little
time as possible.
The following graph illustrates the relative weights for the five Customer preference drivers in Australia. While price matters greatly
(third on the list, but close behind), convenience & quality and easy-shopping experience are on the top of the list. As we note later, this
might matter to retailers who can check off the boxes on the bottom three drivers and have the resources to focus on the top two.

                                                                                Convenience & Quality
    Convenience & Quality
                                                                                • Get in-and-out quickly
                                                                                • Convenient locations
                                                                                • Store experience
                                                                                • Quality products and RTE items
Easy Shopping Experience
                                                                                Easy Shopping Experience
                                                                                • Information, rewards, and discounts
                                                                                • Variety and one-stop-shop

                      Price                                                     Price
                                                                                • Lower prices on conventional, organic, and
                                                                                   natural items
                                                                                • Private brand strength

               Operations                                                       Operations
                                                                                • Out-of-stocks
                                                                                • Price fluctuations

                                                                                Drive Time
               Drive Time                                                       • Drive time minutes

C. While convenience & quality is the top overall preference driver, for Woolworths and Coles Customers, it is
less important. Still, Woolworths and Coles Customers are more “satisfied” in this category.
For the other three retailers, convenience & quality perceptions are larger drivers of preference. This suggests an opportunity for them,
because each of their scores on satisfaction are lower than the top two. Again, the Data suggests opportunities for growth based on
what levers might be pulled to attract and retain Customers.

                                                              Position Map – Convenience & Quality
                   Importance

                                                                           Satisfaction

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The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...
D. Drilling into “satisfaction,” the strengths of Woolworths and Coles are quality products, meat & produce,
cleanliness, and convenient locations
Notes about each of the retailers:
+Woolworths is the strongest on quality & convenience and has an advantage on IGA, Aldi, and 7-Eleven. But it does not have this
advantage on Coles.
+Coles is consistently above average. But the gaps are not significant against IGA or Aldi for quality. Convenience gaps, however, are
significant versus Aldi.
+IGA is near average across most attributes and is not far from Coles on others. IGA’s strongest attributes are customer service and
clean, well-maintained stores.
+Aldi is similar to Coles and IGA on quality, but trails Woolworths and Coles on convenience.
+7-Eleven’s biggest issues are cleanliness and perishables, while their ready-to-eat items are above average.

8                                                                  © 2019 dunnhumby     Australia Retailer Preference Index
The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...
E. The biggest advantage that Woolworths and Coles have is on easy shopping experience.
While easy shopping experience is only the second most important preference driver for Australian shoppers, Woolworths and
Coles are far dominant and it’s what separates them from the pack. It is an opportunity that other retailers might look at to improve
financial performance.

                                                  Easy Shopping Experience Value Map
                  Importance

                                                              Satisfaction

9                                                                © 2019 dunnhumby      Australia Retailer Preference Index
The 2019 Australian Grocer Retailer Preference Index (RPI) - The battle for the modern grocery shopper. Woolworths edges out Coles, but watch out ...
F. Within the easy shopping experience pillar, Woolworths and Coles have a strong advantage on product variety,
one-stop shop, online shopping, discounts and promotions, and rewards.
+Woolworths is ahead of Coles on the one-stop shop attributes. But thes gaps are not significant.
+Coles has an advantage over Woolworths on discounts and rewards, and these gaps are close to being statistically significant.
+IGA and Aldi are significantly below Woolworths and Coles on all attributes except natural/organic variety and sending its
Customers useful information.
+As a convenience store, it is not surprising that 7-Eleven scores low of most of these attributes.

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G. Across all retailers (especially IGA and Aldi), catalogue has the largest pre-store influence
  Retailer catalogue has the highest influence in Aldi and IGA, as does friends and family. But note: both require an emotional
  connection, in real time or in discussion and sharing of information with friends. Across the newer reward and tech-based
  experiences, the traction among Customers is not as strong yet. This is a trend that’s become apparent in other geographies.8 But
  industry opinion suggests that this soon might change.

                  Agreement (%T2B)                         Avge               Coles                WW                   Aldi               IGA

                  Retailer Catalogue                       44.5%              43.4%               43.9%                46.3%              46.5%

                  Store Website                            27.0%              28.7%               28.0%                28.5%              27.3%
EXPERIENCE

                  Email                                    24.5%              25.5%               26.4%                26.6%              24.2%

                  Coupon                                   21.4%              23.6%               22.2%                21.3%              21.9%

                  Friends and Family                       34.2%              32.1%               33.0%                35.0%              35.2%

                  Recipe                                   19.8%              18.1%               19.2%                20.9%              20.2%
REWARDS

                  Social Media                             14.4%              14.8%               15.5%                15.3%              15.3%

                  Store App                                14.3%              14.0%               13.5%                15.1%              13.3%

 8
  For comparison, Trader Joe’s in the US – which has earned the top spot in the US Grocery RPI for two consecutive years – has a relatively small
 digital footprint. https://www.Customerscontactweekdigital.com/Customers-experience/articles/paradox-of-choice-trader-joes

 11                                                                        © 2019 dunnhumby        Australia Retailer Preference Index
H. Price is Aldi’s main domain today, and they deliver it better than anyone else.
As a global disruptor in retail – leveraging economies of scale9 -- Aldi has commanded an increasing amount of attention among
Customers and media influencers.10 Its growing strength in Australia is impacting competitors. Aldi, Woolworths, and Coles
shoppers are similar on price importance; however it is the satisfaction on delivering to this importance that pushes Aldi forward.
As Aldi and other discounters increase their presence and impact, we expect the price pillar in Australia to become more important
to all retailers. Note: price is most important to 7-Eleven shoppers, while it is the least important to IGA shoppers.

                                                                       Position Map - Price
                        Importance

                                                                           Satisfaction

9
 See https://www.youtube.com/watch?v=RD8bai4hNBw. They have configured the store to be ultra-efficient. In the U.S. it only takes about four people
to run a store. Suppliers have to provide product in special boxes to quickly get things to the shelf. Every decision they make is made to reduce costs
and prices.
10
     Another Germany-based grocery discounter – Lidl – has also penetrated global markets.

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I: Customers also perceive Aldi to be the cheapest basket.
In the RPI research, we asked Customers two questions:
+How much do you spend on groceries during a typical month at your primary retailer?
+Imagine a basket of groceries you typically buy costs $100. How much would you expect to spend on this basket of items at the
following retailers?
A startling fact: Customers who primarily shop at Aldi spend $61 less than at Woolworths or Coles. With the reality that Australian
shoppers – like most shoppers around the globe – shop at multiple retailers each week and month, the price of a basket might matter
more and more.

     Q. How much do you spend on groceries during a typical                    Q. Imagine a basket of groceries you typically buy costs
     month in your primary retailer                                            $100. How much would you expect to spend on this
                                                                               basket of items at the following retailers?

                                $445                                                                                              $69.18

                                             $465                                                                                             $87.58

                                                                $509                                                                        $85.32

                                                                $509                                                                        $84.39

          400     420     440          460          480   500      520               0      10    20    30    40     50    60    70    80    90      100

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J: Aldi’s success is not just about price but private brand.
The value of private brands -- both as a mechanism for lowering prices and instilling Customer trust11 -- is a global trend, and we are
witnessing its impact with Aldi in Australia. Woolworths and Coles significantly trail Aldi on both overall prices and private brand,
but beat IGA on these attributes. IGA has the lowest scores in the market on prices, significantly trailing everyone except 7-Eleven.
Aldi clearly leads on these attributes, but natural/organic prices are perceived to be more similar across all brands. In the meantime,
7-Eleven performs significantly below average on both overall prices and private brand. The latter could be an opportunity for 7-Eleven.

 See “Four Reasons CPG Brands Are Losing Out To Retailers’ Private Labels.” https://www.forbes.com/sites/
11

pamdanziger/2019/04/25/four-reasons-why-cpg-brands-are-losing-out-to-retailers-private-labels/#233c19c41a2b

14                                                                   © 2019 dunnhumby       Australia Retailer Preference Index
K: Price satisfaction aligns closely with emotional connection
Another win for Aldi: it has the strongest emotional connection with its shoppers. Its biggest advantages are on recommendations
and satisfaction. This is one of the most worrisome statistics for Woolworths and Coles. A strong emotional connection with its
customers suggests it has stronger brand equity, and positions it well for continued success. Specifically, Aldi is significantly higher
on the emotional connection attributes of “recommend,” “satisfaction,” and “sad of if store closed.”
Woolworths and Coles come second and third in this category. But Woolworths scores higher than Coles on all measures (but only
overall satisfaction is statistically significant).
For “being the neighborhood store,” one might expect IGA to perform stronger emotionally. But it appears that their poor price
perceptions impact that connection. Like IGA, 7-Eleven performs particularly poorly.

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L: No retailer excels at operations (out-of-stock and inconsistent prices)
This too is part of a global trend. The operational challenges facing retailers today -- getting the basics right, making sure items are on
the shelf with consistent pricing -- are daunting. Operations appear to be less important for Woolworths and Coles. This could be an
opportunity for 7-Eleven, Aldi, and IGA.

                                                         Position Map - Operations
                   Importance

                                                               Satisfaction

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N: “Customer loyalty” is low in Australia: 50 percent, well below global benchmarks.
79.5% of Shoppers have shopped at Woolworths in the last four weeks, compared to 83.3% at Coles. Woolworths and Coles capture
two thirds of all supermarket visits. However more than 53.3% had also shopped at Aldi and 27.8% at IGA.

                               79.5% of Shoppers have shopped at WW in the last 4 weeks, compared to 83.3% at Coles.
                                           However over 53.3% had also shopped at Aldi and 27.8% at IGA.
                                           Woolworths and Coles capture a 2/3rds of all supermarket visits.
     Aldi still has a relatively lower loyalty rate than Coles and Woolworths. This shows that Aldi is still not the primary shop, however provides
                                                          ample headroom for the retailer to grow.

                    Loyalty Conversion Rate                                                                      Share of visits

60
       52%           51%                                                                                            4%
50                                                                                                        8%

40
                                                                                               15%                                           38%
30
                                   23%

20
                                                 14%

10
                                                               2%
 0                                                                                                        35%
       Coles      Woolworths        Aldi         IGA         7Eleven

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V. A closer look at Aldi
By now, any reader of the RPI may have concluded that Aldi poses a bigger threat to its competitors12 than previously thought. The
fact remains that there are strategies for each of the retailers to compete on its own terms. That said, there is some benefit to taking
a closer look at Aldi across several dimensions.

+Growth
While Woolworths and Coles dominate market share, Aldi has grown three times as fast over the last three, five, and ten-year
intervals. The compound annual growth rate for Aldi in Australia dwarves its competitors. If Aldi continues to grow at this pace, they
could double their marketshare in ten years.

                                                        Compound Annual Growth Rate
                                                              Grocery Sales
                    15

                    12

                      9

                      6

                      3

                      0

                     -3
                                 Aldi              7 Eleven           Woolworths               Coles                  IGA

                                                      CAGR_3yr           CAGR_5yr           CAGR_10yr

 This is what many of the UK retailers thought and by the time they realized what was happening, Aldi and Lidl captured
12

more than 10% of the market.

18                                                                       © 2019 dunnhumby        Australia Retailer Preference Index
+The evolution of the Aldi store
Aldi also poses a threat by moving toward a more “complete shop,” even with its small range of products. Based on Customer
satisfaction scores, there is still a lot of head room for this retailer. Looking at “shopping trip” highlights -- one of its opportunities
-- Aldi is now catering to all shopping missions and scores higher than IGA in many of the convenience trips. It is 20% below
Woolworths and Coles, but we can see this gap shrinking.

                                                Aldi Shopping Trip / Reason

              31.5%                                        17%                 15.5%                                         31.2%
         A quick emergency                                Snacks         Ready meal / dinner                               Bigger Shop
              food trip

+The Aldi shopper: more like everyone
A few statistics about Aldi shoppers:
• It has a higher number of households with 2+ kids vs Coles, WW and IGA.
• It has a similar age spilt to the other retailers. 21% of shoppers are +65 versus (25%) and Woolworths and Coles (19 and 20%)
• It has the same average income splits as Woolworths and Coles.
• It is slightly higher among lower-income shoppers.13
• Highest income earners represent the same percentage of Customerss as Coles (4.6%).

 The battle for lower-income shoppers is apparent in other geographies. See “Three Retail Stocks That Have Proven
13

Resilient During Rough Market Climate.” https://finance.yahoo.com/news/3-retail-stocks-proven-resilient-200208397.html

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+Aldi has proven its dominance in price: it might now look at other pillars.
This might also pose a threat to other Australian retailers. There’s a lot of headroom for Aldi to improve convenience & quality perception
-- where it has scored low -- and easy shopping experience. Experience from the U.S. has shown that they have used remodels to clean
up stores, built more modern and updated-looking new stores in higher income areas, and improved perishable quality.

                                                        Convenience and Quality Aldi vs Average

 Offers appetizing prepared and ready to eat foods

        Has the freshest meat, fruits, and vegetables

                  Offers the highest quality products

                Look and feel of the store is up-scale

                                   Staff make me feel valued

               My store is clean and well maintained

                                    Has convenient locations

                                   Check out is fast and easy

                     Its easy to get in and out quickly

                                                            0%                   10%                     20%                     30%                40%

                                                      Top Box Average        Aldi

     Convenience and Quality is where Aldi will likely focus their efforts. Aldi are currently winning on price so it is likely that they will focus on
                                          Convenience and Quality improvements to drive future growth

                                                                        Aldi Value Map

                                                                 Convenience &
                                                                    Quality

                                                                                                          Price
                                                    Easy Shopping
                                                     Experience
                      Importance

                                                                                            Operations

                                                                                    Drive Time

                                                                          Satisfaction

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VI. Key takeaways
As noted earlier, there are at least seven key learnings in this first edition of dunnhumby’s Australian Grocery RPI:

                In this first RPI in Australia, Woolworths narrowly edges out Coles for the number-one position in customer
      1         preference. But Aldi -- the global grocery retail discounter -- looms not far behind.

                There are five primary Customers preference drivers (pillars) that the study correlates to emotional connection
      2         (long-term brand equity) and financial performance. Here are the drivers, in order of importance to Australian
                shoppers: convenience & quality; easy shopping experience; price; operations; drive time.

                Despite all the pressure retailers are facing around price, “value perception” – which is about both price and
                quality – is what drives Customer preference and financial performance. Woolworths and Coles rise above
      3         the others in the quality & convenience pillar (as well as easy shopping experience), whereas Aldi outperforms
                on all price attributes.

                That said, price has become more important – it equals emotional connection, a critically important outcome of
                customer preference. Price correlates closely with trust and other emotional attributes These attributes provide an
      4         emotional connection for Customers that ensures they are attracted and stay over the long term. Aldi’s satisfaction
                scores reflect these findings as the stand-out price beacon. IGA’s future success depends on getting this right.

                Store catalogues still play a key role in Customers pre-store influencers. This suggests that Customers are
                creating their own consistent weekly shopping spend, by cherry picking/budgeting across all retailers. There is an
      5         opportunity for a retailer to help Customers with total basket spend consistency within a more personalised and
                tailored shop.

                Everyone shops everywhere: There is very little loyalty between retailers, even those whose primary shop was
      6         Coles and Woolworths still claimed one third of their shopping was also in Aldi.

                The retail landscape is changing – both globally and in Australia. Aldi is shifting price expectations, making
      7         Customers more price sensitive and aware than ever before. This is paving the way for more potential entrants
                into the discount space.

Which leads us to an additional, conclusory, takeaway: strategy that’s driven by Data about Customers might empower all grocery
retailers to compete more effectively in Australia. As the Sydney Morning Herald noted, Woolworths and Coles are not standing idly and
waiting for the so-called retail apocalypse. They are “investing heavily in Data analytics and artificial intelligence capabilities to crunch
Data they collect through loyalty schemes, apps and online shopping.” And that’s just the tip of the iceberg in the world of modern retail.
Data-driven strategy can help any competitor to better understand which Customers preferences to pull. Whether it be convenience
and quality, easy shopping experience, price, operations, or drive time. But there are three realities that retailers must confront:
+Low prices alone will not enable them to compete. What modern Customers want is value, which Aldi and others have demonstrated
is about both quality and price.
+The second reality: while many retailers in fact fear the apocalypse, many others see the new era as a retail renaissance. The entire
industry is undergoing profound change, and it will pay for retailers to position themselves on the right side of history.
+Finally -- and it bears repeating -- the reinvention and renaissance in retail is being driven by the democratization of Data Science.
The biggest players in retail are already aware of that, but we are just at the very beginning of this new era. And we believe that we will
see motion across all the indices we presented in this year’s RPI, as early as next year. Data Science might not only democratize –
level the playing field – for retailers. It also might also help retailers look beyond the immediate horizon and plan for their future.

The dunnhumby team

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References
https://www.smh.com.au/business/companies/coles-and-woolies-secret-weapon-in-war-with-aldi-is-data-20190529-p51sej.html
http://www.roymorgan.com/findings/7936-australian-grocery-market-december-2018-201904050426
https://www.youtube.com/watch?v=Ry31bD5xNgQ
https://www.planetretailrng.com/
https://www.youtube.com/watch?v=vzSLiM7hPIo
https://www.youtube.com/watch?v=l1wA0n3cklY
https://insidefmcg.com.au/2019/05/31/woolworths-turns-focus-to-building-price-trust/
https://finance.nine.com.au/2018/07/09/10/14/aldi-is-now-the-most-trusted-brand-in-the-country

For more information about dunnhumby, please visit : https://www.dunnhumby.com/australia

22                                                            © 2019 dunnhumby    Australia Retailer Preference Index
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 dunnhumby is the global leader in Customer Data Science, empowering businesses everywhere to compete and thrive in the
 modern data-driven economy. We always put the Customer First. Our mission: to enable businesses to grow and reimagine
                          themselves by becoming advocates and champions for their Customers.

 With deep heritage and expertise in retail — one of the world’s most competitive markets, with a deluge of multi-dimensional
          data — dunnhumby today enables businesses all over the world, across industries, to be Customer First.

 The dunnhumby Customer Science Platform is our unique mix of technology, software and consulting enabling businesses to
increase revenue and profits by delivering exceptional experiences for their Customers – in-store, offline and online. dunnhumby
   employs over 2,000 experts in offices throughout Europe, Asia, Africa, and the Americas working for transformative, iconic
                  brands such as Tesco, Coca-Cola, Meijer, Procter & Gamble, Raley’s, L’Oreal and Monoprix.

                                        Connect with us to start the conversation
                                                  dunnhumby.com
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