GMA EXECUTIVE CONFERENCE 2006-06-19 (2)

LUCIA MOSES

WHITE SULPHUR SPRINGS, W.Va. - Mining its own customer data is enabling Safeway to match assortments to its markets and create tailored promotions, its chief marketer said.

The No. 2 U.S. supermarket retailer hopes that effort will build momentum in the Center Store, having already announced that sales growth of its top 10 CPG vendors had accelerated in the past year due to its rebranding work, the new O Organics store brand and better collaboration with vendors.

Safeway for the past several months has been analyzing its sales and loyalty card data and sharing them with manufacturers.

Studying its own data yields deeper insights than the trend data supplied by its packaged goods vendors, said Brian Cornell, Safeway's executive vice president and chief marketing officer, calling the work "a fundamental investment we have to make."

The analysis suggests which categories are important to shoppers, which ones they're shopping at Safeway and which they're shopping at its competitors, he said. The retailer is taking that data to manufacturers to create targeted promotions to shoppers based on their purchase history, rather than the standard freestanding insert the manufacturer typically runs to promote a product.

Safeway also is using the data to tweak assortments.

"It really is taking insights we have and beginning to tailor offerings," said Cornell, who declined to provide specifics of promotions and assortment changes. "We recognize that the consumer in Northern California might be different from the one in our Pleasanton store."

Other top U.S. retailers, like Kroger and Food Lion, have recognized that one store doesn't fit all and have been customizing their marketing strategies using individual shopper purchase and demographic data.

Bringing Safeway's own knowledge to vendor meetings "makes for a much more efficient and effective relationship," said Cornell, himself a former PepsiCo executive.

He spoke to SN after delivering a speech to manufacturers at the Grocery Manufacturers Association's recent 2006 Executive Conference here.

The session was closed to the press at the company's request, but according to attendees, Cornell said Safeway would share data with select manufacturers only and choose its category captain based on the insights they can offer, not size.