The fourth annual dunnhumby Retailer Preference Index (RPI) has a new retail leader in the top spot — Amazon.
The analysts said that in a year dominated by COVID-19 and its impact on retail and consumers’ lives, Amazon was able to jump the reigning top two grocers H-E-B and Trader Joe’s, who slid to second and third, respectively, in the latest index.
The index evaluates a retailer’s performance based on several drivers: price, quality, digital, operations, convenience, discounts, rewards, information and speed. This year, dunnhumby also included calculations from its COVID Momentum Metric, a statistical model that predicts how retailer execution on the same preference drivers’ impact short-term financial success, namely market share gains or losses during 2020.
The study also factors in a survey of 10,000 U.S. households for their feedback on retailer performance and studies retailer financial data. In the end, Amazon moved up to the top spot from No. 3 last year.
“Amazon accelerated past every other retailer on our COVID Momentum Metric and customer safety ratings, due to its speed to shop and virtual store format,” said Grant Steadman, dunnhumby’s president, North America. “As we begin to emerge from the pandemic, we should expect value perception to come back strongly. Beyond COVID, retailers with ‘Customer First’ strategies will best adapt to changing behaviors and deliver what matters most to their customers."
He added that the pandemic has caused record highs and lows in economic metrics and caused huge shifts in how consumers now shop food, “changing the competitive trajectories of retailers who were winning and those who were struggling before the pandemic. As a result, we viewed 2020 through a different lens than we’ve viewed the grocery industry in previous years.”
The top 14 retailers ranked in order are: Amazon, H-E-B, Trader Joe’s, Wegman’s, Aldi, Albertsons’ Market Basket, Sam’s Club, Costco, Publix, Target, Fresh Thyme, ShopRite, Sprouts Farmers Market, and Walmart.
The only new retailer to make the top 14 was Target, replacing Winco Foods, jumping six spots out of the second quartile last year, into this top 14 quartile ranking.
The Chicago-based analysts said the index this year showed that retailers who focused their business on superior value perception — defined by the strongest combination of price and quality — tended to have the most financial success and the strongest emotional bond with customers. This is often a definition for what makes private brands excel and the report acknowledged private brands as a major driver of the price and quality pillars in its index. With that in mind, It’s no surprise that the retailers in the top 14 all have some of the strongest store brands in the industry.
The dunnhumby report also shined a light on retailers with strong speed and digital offerings, something Amazon and Target do well, as a common denominator among grocers succeeding in the index. The pandemic required retailers to get essential items to customers quickly, and often at home or at pickup,