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QuickWit Weekly (2/7): RetailWit’s Data Framework & Last Week’s Top Retail News

In this three part series, the RetailWit crew has developed a framework for assessing a Retailer and CPG’s data and analytics capability.

This is the final entry, where we’ll do a deeper dive into the framework, then do a quick example using the framework. You can find the earlier posts here:
Part I examined Section4’s DELTA framework.
Part II was the creation of RetailWit’s framework.

As a refresher, here is the RetailWit FIRST-R framework:

  1. First Class Citizen – data, data-related roles, and data literacy treated as core to organization’s operations.
  2. Innovation – the firm leads the industry in innovation on data practices, use, and engineering.
  3. Responsibility – proper governance and responsible practices around data: breaches, transparency, and customer policy.
  4. Strategy – data, analytics, and data science are core to the success of the firm’s strategy.
  5. Talent – significant investment in data and analytical talent versus the competition.
  6. Revenue – the data is directly monetized, resulting in additional revenue for the firm.

Essentially, you should see lasting, public artifacts that these firms value data and analytics (D&A) as a core competency. Optics matter in relation to maturity, and a firm that doesn’t mention D&A beyond buzzwords won’t have many related artifacts. Instead, they’ll have artifacts for other areas–brand, operations, software, sales, design, or others. 

Each criteria is scored against a scale of 1- 3, providing less subjectivity (and more insights) than other frameworks. Here are the questions we ask:

  1. First Class Citizen

    • Does D&A have a seat at the table as a distinct C-Suite executive? What is the experience background of those in leadership positions (D&A or another function)?

    • Is there maturity within the function? In other words, do we see scale, standards, or programs that would indicate a strong, healthy function?

    • Do the employees have access to data and data training? Bonus if some form of it is open to people outside of the company.

  2. Innovation

    • Are they leading or following the industry? Do their artifacts (ie. blog posts) get visibility and a higher proportion of share of search versus competition? 

    • Is the data only available through their firm? Either as a unique data set, combined with other data sets to create unique value, or unique tools / platforms.

    • Methods, algorithms, or recent acquisitions provide a data-related competitive advantage.

  3. Responsibility

    • Does the company have a clear, transparent privacy policy?

    • Is customer data protected and ethically used, with precautions in place for PII (ie. fraud protection, watermarking, etc)?

    • Have they had a data breach? What was the response and actions taken?

  4. Strategy

    • Is D&A included in the company’s public strategy? For example, Restock Kroger specifically calls out data as a key pillar to their strategy, and underpins many of the rest.

    • What level is D&A publicly talked about (earning calls, press releases, not at all, etc)?

    • Do they have a unique or proprietary data asset that’s being actively leveraged either internally or externally? 

  5. Talent

    • What is the percentage of D&A employees versus the total?

    • What is the compensation of the D&A’ers? Does it fall to the right of the bell curve, and how significantly?

    • What level of problems are they working on? It’s one thing to work on ad optimization, another to be scaling data infrastructure for other companies.

  6. Revenue

    • To what level have they monetized the core data activities: acquisition, transformation, delivery?

    • How much revenue is tied into the data or related activities?

    • What is the margin of data-related assets and how does it scale over time?

Depending on the use case, you can score this in a variety of ways; a snapshot could be green, yellow, and red or numerical scoring could be helpful in a deeper dive.We’d recommend translating this into a numerical score.

Let’s take an example–Kroger, a FIRST-R criteria–First Class Citizen, and work through it. We’ll rank each question from 1 (weak) to 3 (strong)

  • Does D&A have a seat at the table as a distinct C-Suite executive? What is the experience background of those in leadership positions (D&A or another function)?

    • Kroger doesn’t have a CDO role, but Stuart Aitken and Yael Cosset both sit on Kroger’s executive team. Formerly dunnhumby and 84.51, they have a strong background using data and analytics to drive business growth. We would rate this a 2.

  • Is there maturity within the function? In other words, do we see scale, standards, or programs that would indicate a strong, healthy function?

    • Speaking of, Kroger bought out a portion of dunnhumby in 2015 to become what is today 84.51. 84.51 uses data science and predictive analytics to, essentially, help Kroger and brands at Kroger grow. They have a decent content presence, particularly on owned platforms related to analytics. 84.51 has a development program for data scientists, indicating functional expertise and maturity. This section gets a 3.

  • Do the employees have access to data and data training? Bonus if some form of it is open to people outside of the company.

That’s FIRST-R. Hope it helps you analyze D&A capabilities for both your firm and others. Have thoughts or builds? Share ‘em in the comments below.

Last Week’s Top News in Retail:

Alphabet reports big fourth-quarter beat

    • Alphabet beat on the top and bottom lines for the fourth quarter:

      • Revenue: $75.33 billion vs $72.17 billion expected

      • Google’s advertising revenue came in at $61.24 billion, up 33% from $46.2 billion in the same period a year earlier

    • The company also announced a 20-for-1 stock split

Instant Grocery Delivery loses $20 per order

We all knew this couldn’t be profitable, but this is a jarring number to wrap your head around. Once they account for advertising and paying couriers, many services are averaging a loss of $20 per order. Sounds like the early days of Uber, just trying to get as many riders as possible with no focus on profits…

The startups want to deliver groceries “within minutes” and they usually operate through “dark stores,” warehouses with no retail storefront, which helps them expedite the delivery process. The prices are similar to grocery stores, although there are discounts and many services don’t have a fee or minimum order, per the WSJ.  

It doesn’t help that they all seemed to be focused on NY as their test market making it overly competitive; Brittain Ladd wrote a great opinion piece on how “ “New York City Is Killing Rapid Grocery Delivery Companies”

Valentine’s Day spending to be huge

After a huge Holiday season, the forecasts for Feb 14th spending are almost record setting. You better not wait until the last minute to pick up your chocolates, candy hearts and cards.

Valentine’s Day spending is expected to reach $23.9 billion this year, up from $21.8 billion in 2021 and the second-highest year on record, according to the annual survey released today by the National Retail Federation and Prosper Insights & Analytics.

More than half (53%) of U.S. consumers plan to celebrate the holiday in 2022, up from 52% in 2021. More than three-quarters (76%) of those celebrating indicate it is important to do so given the current state of the pandemic.

According to the survey, shoppers expect to spend an average of $175.41 per person on Valentine’s Day gifts, up from $164.76 in 2021. Candy (56%), greeting cards (40%) and flowers (37%) remain the most popular gift items this Valentine’s Day. 

The AR wars among Social media continue this week as: 

Snapchat’s AR shopping upgrade points to social commerce future

“Augmented reality is changing the way we shop, play, and learn, and transforming how businesses tell their stories and sell their products,” Jeremi Gorman, chief business officer of Snap, said in a statement. “Our revamped AR Shopping Lenses will mean a more engaging experience for our Snapchat community.”

Pinterest adds augmented reality feature for home decor

To catalyze more social shopping on its platform, Pinterest debuted its Try On for Home Decor tool, which lets users preview furnishings in their home with augmented reality technology,

Amazon, H-E-B and Market Basket ranked as top grocers

The real headline for us here is that we are all just supposed to be ok with Amazon being considered a “grocer”? Amazon has become an “everything” retailer, but the fact that they can beat out stores like H-E-B, Market Basket and Wegmans really shows the power and influence of what Bezos Inc. has built.

dunnhumby’s latest ranking of the nation’s top grocery retailers had Amazon in the top spot, with H-E-B following in second place and Market Basket leapfrogging three retailers to take the third spot away from Trader Joe’s. Wegmans held onto the fourth spot for a second year in a row.

“The pandemic has massively accelerated changes in how customers buy their groceries, and their behaviors are continuing to evolve,” said Grant Steadman, president of North America for dunnhumby. “2021 was the year that grocery retail became truly omnichannel. Retailers who delivered on their customers’ evolving needs in-store and online performed best…but a number of midsize grocers gained momentum by understanding their customers better and differentiating their offering accordingly.”

You can hear more from Grant in the latest CPG Guys podcast, it’s definitely worth a listen!

ECRM to host diversity and sustainability events

ECRM is stepping up its efforts to drive retail industry engagement around Corporate Social Responsibility (CSR) with its Diversity Week and Retail Sustainability Collaborative, two educational and product sourcing initiatives in support of creating more opportunities for diverse, inclusive and sustainably-focused suppliers.

CBL makes diversity commitment in new partnership

CBL Properties has partnered with Wade Hinton and his Hinton & Company to aid the company’s efforts to help guide its environmental, social, and governance initiatives.

Natural Grocers Publishes Inaugural ESG Report

Natural Grocers has released its first Environmental, Social and Governance (ESG) report. Although it has built its business on sustainability and regenerative agriculture since its founding in the 1950s, the natural and organic retailer mapped out its standards and results in the recently-released document.

Shipt names Target operations executive as CEO

Kamau Witherspoon will take over leadership of the same-day delivery company on March 1 from Kelly Caruso, another Target veteran, who has been at the helm since early 2019.

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