US Foods successfully delivered on customer-centricity through their CookBook program. CookBook provides customer-level insights and recommendations to tailor offerings, increase sales and margins, and deepen customer relationships. It helped transform US Foods' business model to be more customer-centric across pricing, promotions, assortment, and marketing. Key lessons included having executive support, a clear business model, change management, and scaling the data and analytics platform. Leading retailers execute customer-centricity enterprise-wide, through integrated customer strategies and plans, vendor collaboration, and by understanding customer needs on a granular level.
The 15 Minute Breakdown: 2024 Beauty Marketing Study
Delivering on the Promise of Customer-Centricity - Precima & US Foods at FMI Learning Lounge
1.
2. Delivering on the Promise of Customer-Centricity:
A Case Study of Success from US Foods
FMI Connect Learning Lounge – June 21st, 2016
3. Today’s presenters
Graeme McVie
VP & GM, Business Development
Precima
gmcvie@precima.com
Chuck Sample
VP, Insights and Analytics
US Foods
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4. Today’s discussion topics
Why are we even talking about customer-
centricity?
How did US Foods successfully deliver on the
promise of customer-centricity?
How do leading retailers successfully execute
customer-centricity to win with customers?
Market
perspective
Case Study
Successful
execution
01
02
03
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5. Why are we even talking
about customer-centricity?
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6. Two years ago Walmart’s CEO said on a conference call to
investors:
Doug McMillon, CEO,
“We’re making progress on
building a more customer-
centric organization, with a
foundation of everyday low
prices”
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7. In the summer of 2014 Walmart launched their Savings
Catcher app that went national
“If there were ever a no brainer
in the world of retail, it would be
the decision to create an app
like this”
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Aaron Strout, Journalist,
Marketing Land
8. Now Walmart has axed Ad-matching at hundreds of stores
to drive adoption of their App
“Walmart is ending its in-store
ad-matching program at
hundreds of stores…to
encourage more
customers to join
Walmart's app”
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Hayley Peterson, Journalist,
Business Insider
9. Customer-centricity and personalization are key focuses –
Kroger
Lauren Johnson, Journalist, Mobile
Commerce Daily
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“Kroger’s mobile strategy stands
out with focus on loyalty,
personalized coupons”
10. Customer-centricity and personalization are key focuses –
Target
Brian Cornell, CEO
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“…all of the company’s efforts
will be fueled by a guest-centric
point of view, including updating
the loyalty programs to include
more personalized offers and a
simple way to participate”
11. Customer-centricity and personalization are key focuses –
Safeway
Steve Burd, Former CEO,
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“There’s going to come a point
where our shelf pricing is pretty
irrelevant because we can be so
personalized in what we offer
people.”
12. Customer-centricity and personalization are key focuses –
Whole Foods
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Walter Robb, Co-CEO
“Over the remainder of the year,
we plan to continue our
promotional strategy, including
more personalized offers“
13. Other industries are shaping & setting new customer
expectations for customer-centricity
On-Demand PersonalizedMobile
14. Retailers believe a customer-centric
strategy is key to success
0
5
10
15
20
25
30
35
40
Series 1
Series 2
%
Manufacturers
Retailers
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Source: Precima Customer-Centricity Research Study 2015
15. Personalized offers are not a top factor when choosing
where to shop but they are growing in importance
95% 94% 92%
83% 81%
55%
Quality Variety Everyday low
price
In-store trade
promotions
Steep
discounts
Personalized
offers
11%
vs
2015
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Source: Precima Grocery Promotional Research Study 2016
Product
Quality
Product
Variety
Everyday
Low Prices
In-Store
Promotions
Personalized
Offers
16. Millennial generation rate personalized offers as more
important than other generations
54%
70%
60%
47%
34%
GEN Z MILLENNIALS GEN X BOOMERS PRE-BOOMERS
Importance of Personalized Offers by Generation
Gen Z Millennials Gen X Pre-Boomers Boomers
Gen Z Millennials Gen X Boomers
Pre-
Boomers
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Source: Precima Grocery Promotional Research Study 2016
17. What types of shoppers have found personalized
promotions to be important?
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Tech Enabled
Younger
Generations
More likely to like offers
through mobile app or
SMS and like to pay via
mobile
More Loyal
Millennials & Gen X like
personalized promotions
& expect retailers to
become more
personalized in future
Source: Precima Grocery Promotional Research Study 2016
Are significantly more
likely to spend more
than 40% of their weekly
grocery budget at their
primary store
18. Retailers believe they’re being customer-centric, but half of
shoppers aren’t feeling it
• Senior management is strongly
committed to customer-centricity
• We consistently deliver
personalized marketing offers
• We leverage customer insights to
develop strategies and plans
• They don’t ask for my feedback
after I shop
• The personal data they collect
does not benefit me
• They don’t send me attractive
offers based on my shopping
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Source: Precima Customer-Centricity Research Study 2015
19. How did US Foods successfully
deliver on the promise of
customer-centricity?
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21. Who is US Foods?
• 2nd largest foodservice distribution company in the U.S.
• 300K customers; 120K independent & regional operators
• $26+ billion in revenue
• 58 distribution centers solely in the U.S.
• 23K+ employees, 3K+ sales people
• Post recession IR growth estimated at 4-6%
• Margin pressured industry
• Survived unsuccessful buyout from largest competitor (18 mos)
• Went public last month: USFD 21
23. 23
CookBook is the Engine Behind our
Customer-Centric Vision
CookBook powers customer-centric,
actionable insights through predictive Analytics
These insights allow us to deepen customer
relationships and provide the most relevant
solutions to help grow their business.
We put the customer at the center of everything we do
24. 24
Insights reflect that no two of our customers are quite
the same
Customer-item level insights are continually updated to
account for recent changes in customer behavior
Up to three years of past behavior is used to determine
purchasing, promotion and pricing patterns
CookBook is the Engine Behind our
Customer-Centric Vision
25. Transforming the Business of Foodservice
25
We can simultaneously tailor the service model and
deepen the customer relationship to:
• Increase margin
• Increase penetration
• Increase net account growth
• Reduce total cost to serve
• Increase our return on investment
While increasing net promoter score—the critical
indicator of our customer-centric strategy
25
26. 26
Original Business Case Strategic Objectives
An integrated suite of tools will support future category management organization
Pricing
Intelli-
gence
Assort.
Optimi-
zation
1:1
Marketing
& Promos
•KVI pricing to increase customer
penetration
•Non-KVI pricing to achieve
margin targets
•Improved SKU
productivity
•Increase sales from
new product
innovation
•Target offers aimed
at acquisition, lift or
retention
•Better promotion
item selection
27. 27
CookBook Realized
My
Kitchen
CookBook
for CMs
Sales
Planning
Powered
by
CookBook
CookBook
for
Vendors
•Insights and workflows to
foster category strategy
decisions & accelerate
category performance
(Win @)
•Unique price recommendations
to maximize sales & profits
•Tailored content
(messaging & offers)
that drive customer
loyalty
• Insights into vendor &
category performance to
inform strategies &
investments
• Align resources against
prioritized customers
• Identify at-risk customers
• Product penetration
opportunity recos
CookBook has evolved to further power capabilities across Merchandising & Sales
Pricing
Powered
by
CookBook
28. 28
CookBook is
creating the next
generation of
insights,
expanding into
new business
areas
CookBook
Locally
Managed
Business
CookBook
for CMs
CookBook
for
Vendors
My
Kitchen
Chef’StoreVAS
Promos
Digital
Contract
Business
29. 29
Strategy Pyramid
WIN
Food Leadership
DIFFERENTIATE
Easy Customer Experience
COMPETE
Flawless Fundamentals
FOUNDATIONAL
GREAT
FOOD SELLERS
INSPIRING
CONTENT/PROG
EASIEST TRANSACT
ACROSS CHANNELS
MOST VALUED
BUSINESS SOLUTIONS
DELIVER PERFECT
ORDERS
LEADING FOOD
SAFETY
RIGHT PRODUCT, RIGHT
PRICE
OPTIMIZED COST TO
SERVE
PEOPLE
INFRASTRUCTURE
PROCESSES
ANALYTICS
Local and
sustainable
Great
brands
Innovative
products
best everyday cop
and produce
30. 30
When fully deployed, CookBook will create more
value across all stages of the customer lifecycle
Current Customer
Lost CustomerProspect
Prospect
Prioritization
Prospect Pricing
Acquisition
Campaign
Prospect Product
Recos
Pricing Onboarding
Price Stabilization
Loyalty Campaigns Category Penetration
Campaigns
Predict Churn
Retention
Campaign
Win Back
Campaign
Win Back
Loss
Acquisition
Legend
In Market 2016
In Market
CUSTOMERVALUE
31. 31
CookBook Governance was essential to success
• Workstream/
project/initiative-level
activities & decisions
• Enterprise level
escalation point for
major decisions
• Program level
escalation point &
decision-making team
Steering
Committee • Cross-program level
escalation point &
decision-making team
Consolidation/Escalation
StrategicDirection/Prioritization/
Decisions
Operating
Committees
Workstream
Teams
ICE
PMO
PL ICE
Working
Level
Executive
Leadership
Program
Leadership
Business
Leadership:
Exec sponsor
BI Center of
Excellence
BI
Governance
Data
Governance
32. Lessons learned…
1 Have a business model to draw from
Have multiple executive stakeholder accountability2
Commit to a true partnership: Analytics & IT3
Brand your work: make it approachable4
Involve the business actively5
Don’t let perfection become the enemy of good6
Invest in change management7
Be efficient in your design8
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38. Customer-Centricity should be leveraged throughout the
organization and across to trading partners
Vendor
Collaboration
Merchandising
Customer
Marketing
Loyalty
Programs
1-1.5X 2-3X 4-6X 5-8XROI
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39. The retailers that best satisfy the needs of
customers will win
Understand customer needs
on a granular, timely & frequent basis
Consistently execute
Actions that best satisfy customer needs
1
2
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40. Takeaways
Leading grocers are investing heavily in it
Shoppers want it & demand for it is increasing
Deploy across the organization
Extend efforts to trading partners
Starts with exec. support & org. commitment
Requires change management
Needs scalable data and analytical platform
Customer-
centricity
matters
It’s possible to
deliver on the
promise
It has to be
executed right
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02
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41. Delivering on the Promise of Customer-Centricity:
A Case Study of Success from US Foods
FMI Connect Learning Lounge – June 21st, 2016
Graeme McVie, VP&GM Business Development | gmcvie@precima.com
