Loyalty360 Loyalty Live | Vince Tirelli, dunnhumby

Discover the future of grocery shopping with Vince Torelli, the customer strategy maestro at Duhumbi, as we unravel the secrets behind what really drives your choice of where to buy your groceries. Vince, with his rich blend of international experience and genuine zest for food and strategy, brings us an insider's look at how Duhumbi weaves personalization and customer loyalty into the very fabric of their retail solutions. We dig into the pivotal role of customer data, and how it's shaping grocery shopping experiences to cater to individual needs, from your budget considerations to your taste for local flavors.

Join our heartfelt journey that goes beyond the aisles and checkout lines, touching upon the ethos of gratitude that guides my life, influenced by my family's Italian heritage. Vince shares his personal narrative too, contributing to our rich tapestry of insights. We cover everything from HEB's community-focused strategies to Amazon's digital personalization prowess, illustrating how building a genuine connection with customers can lead to unwavering loyalty. Whether you're in the retail industry, a foodie, or just curious about the evolution of shopping, this episode is packed with industry expertise and personal stories that will enrich your understanding of the power of personalization in retail.

Transcript

Mark Johnson: 0:04

Good afternoon, good morning. It's Mark Johnson from Loyalty 360. Hope everyone is happy, safe and well, I want to welcome you back to another edition of our loyalty live. In this series, we speak with the leaders in the industry about the technology trends and best practices that drive customer experience and loyalty. Our guests provide tactical solutions and expert advice on building and maintaining relationships with customers. Today, we had the pleasure of speaking with Vince Tirelli. He's the customer strategy manager at dunnhumby. Welcome, Vince. How are you?

Vince Tirelli: 0:36

Thanks, Mark. I'm great Happy to be here. I'm excited, Looking forward to sharing with you.

Mark Johnson: 0:41

Great, I'm looking forward to the discussion, for sure. First off, we'd like to start these on a personal level, so we'd love to know a little bit more about yourself, your current role at dunnhumby, maybe a little bit about your background as well.

Vince Tirelli: 0:52

Yeah. So a little bit about myself, the things that I love most. I love foods, I love people, I have a really interest in people and I'm really passionate about strategy. So I think those are part of the reason why I'm a customer strategy in the grocery industry. I also love to travel and live abroad, so I've lived and worked in Italy, spain, mexico, canada, the US. So I love embracing other cultures and I think that aligns well with dunnhumby's global presence. So I'm really lucky in that sense that I get to deal with global counterparts daily.

Vince Tirelli: 1:28

So I'm part of our customer strategy and insights team. We help our clients better align their customer value propositions to their customers and we're also responsible for a lot of the exciting thought leadership that comes out of dunnhumby which we're going to talk about today. I've been in customer science for 15 years now, so I started my career in media. I then entered the world of retail analytics at Nielsen. I did some innovation work on the CPG side and the past six years I've been with dunnhumby so my longest relationship to date. So since joining dunnhumby, I've went from major insights transformations to store resets. I've helped lead our category management and the past two years really solely dedicated to customer and competitive strategy.

Mark Johnson: 2:16

OK.

Mark Johnson: 2:19

For those who may not be familiar with dunnhumby can you give us a brief overview of what dunnhumby does, maybe a little bit about the genesis of the company? What industry dunnhumby focuses on?

Vince Tirelli: 2:27

Of course, yeah. So at dunnhumby we empower retailers and brands to put their customers first. So we do that by helping them leverage their customer data and other data loyalty data and that leads to smart decisions and that leads to customers coming back. So dunnhumby first helped Tesco launch their club card in 1984. So we've got a lot of loyalty experience. We're also the global leaders in collaboration and insights monetization. So we ultimately believe that when retailers and brands or CPGs work together and speak a single customer language, everybody wins. We work with 80 retail clients and partners globally, 1,300 brands in grocery mostly grocery, but also pharma and we have almost 1 billion customers, or around a billion customers under management at the moment.

Mark Johnson: 3:18

Excellent, and when you look at the recent report, you did the retail preference index. A special edition of the report focuses on personalization in the US grocery market. Personalizations are important to many brands today to drive customer loyalty, but especially in grocery. Can you tell us a little bit about the report and how it came to be?

Vince Tirelli: 3:40

Yeah, so I guess I'll start with some background on our annual edition. So this is a special edition of personalization, but the annual edition as soon as it's 7th edition. I was founded by my colleagues and mentors, Eric Caner and Eric Carlson we know them internally, as the Eric's so some of the smartest people that I know. But the aim of the report is really to determine what elements of the customer value proposition are most important in driving growth and which retailers are winning and why. So if you look at existing lists out there rankings they focus largely on financials or emotional connection or brand equity, et c. So this report is both. It's really what sets it apart.

Vince Tirelli: 4:22

So in our latest edition last January, what we noticed is that personalization levers grew threefold. So they now account for a quarter of price perception levers and we expect that to grow. So that's really the main reason for looking specifically at personalization for this edition of the RPI and it's the first time that we do that. And if you look out there, there's a lot of definitions of personalization. But, like everything else that we do, we were curious in understanding what personalization means to customers, and so what makes customers feel like a retailer or a brand is a means for them personally.

Mark Johnson: 5:04

Excellent. So we talk about personalization and being able to personalize with regard to the price and price sensitivity. How does personalization and price sensitivity work together?

Vince Tirelli: 5:14

Yeah, we actually looked at price based price perception as part of personalization. So we looked at. So, when we look at the, you know, main themes of personalization, the most important one is targeted savings. So it accounts for 55% of personalization outcomes. So we're talking about, you know, share of wallets and emotional connection and others. So we looked at the relationship between targeted savings and base price perception. So, and base price being, you know, those everyday low prices, and what we saw is that those retailers who perform really well in targeted savings 80% of them are also best in class in price perception.

Vince Tirelli: 5:59

So, you know, the learning here is that loyalty proposition should work in tandem with all areas of the business because, you're right, consumers are in search of lower prices and we expect that trend to grow.

Vince Tirelli: 6:11

We also released a study earlier in the year grocery 2053 that looked at the most important customer trends in decades to come and based on that analysis, we also saw that what we called fiscal conservatism, or the general concern with the economy and, you know, wanting to save money that's the most important trend over the next 30 years. So it's, you know, important that when we think of personalization, we now forget the value core of the customer value proposition. So price quality there's still the most important in driving, you know, market share and long-term growth. So what personalization does, however, is it allows, you know, those companies that can't, that don't have the scale to focus on price alone to drive personalization outcomes so levels the playing field in that sense. But it's still important to at least stay competitive on things like everyday low prices on super key value items, almost those things that matter most to price sensitive shoppers. So I think the opportunity here is really to work hand in hand with you know other parts of the businesses to make that happen.

Mark Johnson: 7:15

In the report you indicated that to compete, retailers must accept that the consumer, the customer, decides what personalization means and not the grocer, and that's a big challenge we see from our membership. You know hundred and thirty some brands they have a hard time listening to, sometimes understanding what the customer actually values and walking in their shoes. Quote unquote. Can you tell us a little bit more about what that means to you, because I think it's very important, and what brands can do to ensure that they are providing, you know, the expected personalization offerings that the customer wants?

Vince Tirelli: 7:47

Yeah, that's a good point.

Vince Tirelli: 7:48

So our main learning is we don't define personalization.

Vince Tirelli: 7:51

Customers do so and, as the name suggests, personalization will mean you know something different to different shoppers, and so personalization is really about you know loving customers the way they want to be loved and that's, you know, the secret to any like long lasting relationship. So, based again on our retailer preference index study on personalization, you know we looked at a whole bunch of you know levers, like thirty plus levers, and there's really three main themes that stood out in terms of you know those drivers that really like drive personalization for for customers. That first bucket is targeted savings, so we spoke a bit about this. Targeted savings it's really everything loyalty, a frictionless experience and a localized assortment. So these are really the things that make customers feel like a retailer or a brand knows them personally, and what we see in our, you know, top ranking retailers is that most of those that do well have a balance strategy across all these personalization drivers and the approach personalization from a holistic perspective, because you know, again, different meanings to different shoppers. So that's really the key there?

Mark Johnson: 9:01

Okay, excellent. And I think you also talked about the most important personalization drivers targeted savings, so making sure that whatever offer you put forward to the customers actually something they have purchased before, potentially have an interest in Exactly. With many customers or consumers in charge, or kind of in search of lower prices, what opportunity do you see for grocers to acquire and retain customers that are more price sensitive?

Vince Tirelli: 9:30

Yes, I think we to your point. We did discuss this a bit. But targeted savings is so it comprises, just taking a step back. It comprises loyalty savings, rewards and even the ease components. So the ease of understanding a loyalty program and redeeming points, those all kind of make up targeted savings. We talked about the relationship between base prices, everyday low prices and targeted savings. So again, I think the key there to acquire and retain customers is really to think of personalization as a whole, like not an silo. So there's really an opportunity just here for teams to work hand in hand with other prices of business. So it's not just about looking at price sensitive shoppers from a pricing perspective or from a loyalty perspective. They actually have an impact on each other. So doing really well in base price perception means that you can unlock targeted savings. Conversely, you can tap your performance on targeted savings if you don't have that solid price perception. So it's at least, even if you're not a base price leader, to at least stay competitive in that area and really orchestrate other levers of personalization well.

Mark Johnson: 10:46

Okay, the other two drivers that you mentioned report are localized assortment and frictionless shopping experiences. We'd love to have you define those as well, especially frictionless shopping experience. Everyone's talking about taking friction out of the shopping equation quote, unquote so we'd love to have you define that for us as well.

Vince Tirelli: 11:05

Yeah, it doesn't matter. And yeah, frictionless experience isn't one that we would expect as a driver of personalization. I'll start with localized assortment. So together localized assortment and frictionless experience they may come for that remaining 55% of driving, other personalization outcomes. So they are targeted savings.

Vince Tirelli: 11:25

Loyalty is not the only part of the story. They all together make up that personalization story. A localized assortment is really about providing customers with an assortment from local businesses and farmers. Also, like generally, the variety of product, the right variety of product to meet customers needs is really important and that close connection to the local community. So that makes up those elements make up localized assortment.

Vince Tirelli: 11:50

We don't typically think of assortment when we think personalization, but we weren't surprised to see this area come up. First because it is a well-researched fact, like that close relationship between identity and a sense of place, but also, ultimately, when shoppers are engaging with retailers and brands, it's to get that perfect product or service that meets their needs. So, again, not a surprise to see localized assortment make the list. So, yeah, the third driver, a frictionless experience really important. Driving overall personalization, and this one's more about holding shoppers' hands and facilitating that experience, both in store and online, and there are many things that will help retailers and brands provide a frictionless experience. So the most important one is relevance. So relevance in terms of not only products or products substitutes, product recommendations, etc. But also in terms of the content that we share and communicate to shoppers. Reminders are also another big part of frictionless experience, so helping shoppers remember their usuals, remind them to buy something again or, if they forgot something, check out. There's a big digital component as well to frictionless experience, so the website, the app and how they help in improving that whole experience, both in store and online. But it's not only about the digital assets, so there are other elements that include, like staff making customers feel valued, customer service, giving customers the control of how they engage with a retailer also elements that are really important in driving that frictionless experience.

Vince Tirelli: 13:35

One example of a retailer that's doing really well in both those areas is HEB, so they really pack a punch by. So they're third in personal experience and first in localized assortments. So we actually surveyed 10,000 American grocery shoppers and we asked them who does personalization best, who makes you feel like they're made for you personally, and why is that? And so there was one quote that we shared in the report about HEB, and this shopper said, oh, and I feel that they really understand what customers need. They really tailor their assortment. I can find Hispanic assortment that I can find in their stores that I can't find elsewhere. But they're also involved in the community. They show up during hurricanes and I quote the shopper like and because of this, I want to go back and spend more, and so I think it's clear to see how personalization keeps customers coming back. So, in essence, we see that brands that truly embrace personalization, they are driving more loyalty, share of wallet, visits, baskets and that stronger emotional connection with the shoppers. So, yeah, that's what it's all about.

Mark Johnson: 14:37

Excellent. And then Amazon ranked first the grocery retailers and the personalization retailer preference index. Does being a completely digital or at least having their genesis into kind of the digital realm as grocers push to get more digital engagement one of the biggest challenges they have, you know does it benefit them being a big digital retailer, that impact their personalization score personalization or efforts?

Vince Tirelli: 15:03

It definitely helps them. So Amazon is often the exception to the rule when we do these rankings. In this case, in the case of personalization, they're really peerless. And going back to frictionless experience, they're really peerless in how well they deliver on that. So you know, their store dates back in 99, they've had a lot of time to perfect this art, so much so that it compensates for their performance in other areas, like targeted savings. So you know, like we mentioned, frictionless experience is not only about digital, but there is definitely a big part of it that is.

Vince Tirelli: 15:37

And yet, Mark, you're absolutely right, digital retailers rely heavily on customer data, so they're going to be naturally drawn towards, you know, better personal, more and better personalization In terms of like. We also see like other advantages. So we've looked at in the report that personalization meters also tended to leverage a higher usage of what we call personalizable shopping aids, so those tools that shoppers use to make their grocery decisions. So things like, you know, personalizable coupons, rewards, ads, emails, usuals, recommendations, socials. But beyond those mechanics, amazon is like, for example, you know, diligently able to activate customers with relevant content and relevant channels. So being able to execute personalization is as important as getting customers data.

Vince Tirelli: 16:29

And, I think, the last, just the last point that I'd like to make here. It's important to keep in mind that 55% of shoppers are still brick and mortar only. If we think about like, if we include like app users, for example, but for example, app users that also only shop in store, now we're at almost 80% of shoppers. So, again, majority of shoppers, brick and mortar only. But even for those purchase journeys, most of those journeys start online. So it's up to all retailers really to leverage customer data and drive personalization. But you know, if we look at some of the retailers that we work with, for example, they're not pure prelate retailers or digital retailers, but they have made it to the top quartile and personalization. So you know, I think that proves that there are ways to leverage digital assets and customer data. You know you're not considered a digital retailer and really activate customers. You know, throughout the whole shopper journey, Excellent.

Mark Johnson: 17:31

Retail media networks are growing importance to grocers. First off, it would be interesting to understand how you define what a retail media network is and for our audience to definitely think that they would be interested in understanding how you define and what that means to the grocerer would be good to know as well.

Vince Tirelli: 17:53

Retail media is definitely one of the most important trends, again, because most customers' journeys do begin online. Retail media can really be used not only to deliver more engaging campaigns across the journey, but it can also help customers with everything from inspiration, added value, convenience. Loyalty programs, on the other hand, are really the reason why customers share their data in exchange for a relevant and rewarding experience. So what this does, this loyalty data? It unlocks a world of opportunities for retailers to leverage their offering and drive relevance and reach via their retail media businesses, which is also a big point of differentiation for CPG as well. But what we've seen, at least, is that retail media can also act as a feedback loop, and what that does is it enables improvements in any areas of the business, including the loyalty program itself. So that's really where it's after.

Vince Tirelli: 18:56

The future is like that bridging of loyalty and media. I think there are great loyalty programs out there. If we look at who's getting credit from customers on their loyalty program, or what we call targeted savings you mentioned, like Kroger, Giant Eagle they ranked third and fifth on that dimension but also Amazon and Meijer, also players that rank well on target savings, and they have these big retail media businesses. So it's not a surprise to see these retailers making it, because they're playing all their cards. They're leveraging both their retail media businesses and their loyalty programs with Shopper to really execute personalization at another level, if that makes sense, yeah.

Mark Johnson: 19:35

Excellent. What's one piece of advice you would give to a brand that seeks to adapt and innovate its loyalty program, especially when regarding personalization?

Vince Tirelli: 19:48

Yeah, I think, aside from, like you know, new trends like hyper personalization and to get a journey is they're super important. But I think what we've learned through this exercise is really to think like big picture. Don't think of loyalty, of personalization or personalization and asilo, and that bigger picture is really about the basics, teamwork and customer first. So on the basics, you know we mentioned price, loyalty, execution. It really it really lives alongside with other business initiatives. Teamwork is super important.

Vince Tirelli: 20:17

So the feedback that we've gotten from clients when they saw this framework is you know, it's great because it allows different teams, from loyalty to merchandising teams, to really play a role in personalization. So it's really important to keep that in mind, like democratizing data and allowing you to drive decisions across all areas of the business and that, last but not least, the customer. So make the loyalty program and the business as customer first as possible. And it all begins with the customer data. It really enables that transition to customer first as an organization, and by that mean, by that we mean like, not only the company but not only the exacts, not only marketing, not only serum, but any area that can leverage that data to improve customer experience, and allowing customers to prioritize internal roadmaps is really what's going to keep them coming back.

Vince Tirelli: 21:08

So yeah, big picture, teamwork, customer first. Just the basics.

Mark Johnson: 21:13

So you mentioned hyper personalization and micro targeted journeys yeah, important. You know there are other trends or maybe new technology. That brand should be keen to learn more, be using more to help impact customer loyalty.

Vince Tirelli: 21:28

I think those are the key ones, like, because we mentioned, you know, retail media. You know we're investing in. A lot of clients are to, you know, the industry as a whole. I think, yeah, we mentioned hyper personalization and and integrated journey. But hyper personalization can help on so many different levels. You know, we've seen that. We know that saving money and what we call fiscal conservatism, so you know, wanting to save money, that that general concern with the economy is it's going to stay, it's going to grow hyper personalization can help with that. So, you know, in terms of coupons, relevant coupons, tangible and easy savings, personalized comms, easy shopper journeys, hyper personalization can help with all those things. But it can also help drive a localized assortment. So you know, not only having the right products on shelf but also being able to adequately, you know, personalized communication. So we saw that in the study. So it can really help retailers, you know, use their data to activate customers in the full spectrum of personalization. I'd say that's, that's the key one, along with, you know, providing that integrated journey.

Mark Johnson: 22:40

Last question what's next for dunnhumby? We transition to 24.

Vince Tirelli: 22:49

Well, we're going to keep focusing on improvements on our core competencies. So our clients are constantly asking for faster answers, recommendations, predictions, and they leverage our AI science to do that. So we're always pushing the limits of science with deep learning, foundational models, causal science, et cetera. But in terms of the RPI, we're really excited because we're going to be integrating our customer segmentation. So customer segmentations are really the basis of any work that we do with clients, but we're integrating that to the retailer preference index so we'll be able to understand not only who's winning and why in the US, but with which customers, which model, et cetera. So, yeah, stay tuned. That's coming out end of January, early February.

Mark Johnson: 23:35

Excellent. And now we have our wonderful quickfire questions. Like to keep these to a one word or short phrase. What's your favorite word? Surprise. What's your least favorite word?

Vince Tirelli: 23:48

Boring.

Mark Johnson: 23:50

What excites you? Vince: Good stories, Mark: there you go. What do you find tiresome?

Vince Tirelli: 23:56

Repetition.

Mark Johnson: 23:57

What's your favorite grocery store item?

Vince Tirelli: 24:01

Nutella.

Mark Johnson: 24:02

Oh, ok, as a customer, what brands engage you the best?

Vince Tirelli: 24:09

I'd say Amazon. Ok, are you surprised?

Mark Johnson: 24:12

No, it makes sense. What is your favorite book recommendation to make to colleagues?

Vince Tirelli: 24:19

Blink or the Secret Life of Groceries.

Mark Johnson: 24:23

I was just yeah, I just started the Secret Life of Groceries on Audible a week or so back. Yeah, that's great, it's very lively.

Vince Tirelli: 24:33

It's very lively Really get transported into that universe.

Mark Johnson: 24:37

It's a heavy listen too, but I love Blink, I love Gladwell and all the Hebrew scientists, but that's a whole different story. Who inspired you to become the person you are today?

Vince Tirelli: 24:48

My parents. They arrived by boat in the 1950s from. Italy. So yeah, they're just inspiring OK.

Mark Johnson: 24:56

What do you typically think about the end of the day?

Vince Tirelli: 25:00

Grateful list A bit cheesy, but I try to do a grateful list that's really specific to the day, so I'll say, oh, I love the interview with Mark and just helps me stay grounded.

Mark Johnson: 25:12

That's good, and how do you want to be remembered by your friends and family?

Vince Tirelli: 25:17

Fun, positive and a people connector.

Mark Johnson: 25:20

That's good. Well, Vince, thank you very much for taking the time to talk to us today. It was a great beginning to know more about you and the personalization index and also dunnhumby. So thank you very much, thank you. And thank you everyone else for listening. Make sure you join us back for another edition of Loyalty Live soon. Until then, have a wonderful day.