Nielsen wins US Aldi store deal, for retail analytics

TV viewing-habit specialist Nielsen has won a pretty major deal in the US, after supermarket chain Aldi announced that it would be expanding a trial project to cover all of its 1,700 stores in the USA. It’s a high-profile win for Nielsen’s retail analytics platform, which analyzes the behavior of shoppers and the impact of in-store advertising, which comes as the company adapts to its quickly shifting core market.

Nielsen is best known for its TV monitoring boxes, shipped to participating homes to observe what they watch on television – selling the data gathered to advertisers and TV channels, who then use the viewing statistics to thresh out the ad-spend and revenue. However, the shift from regular TV viewing habits to mobile and over-the-top (OTT) viewing provided a rocky few years for Nielsen, as it was forced to shift from the VHS era into the new internet reality.

The goal here is to use multiple types of data to analyze shopper behavior while they are inside a store. The system will be able to monitor how particular customers or groups of customers shop, and how they react to in-store layouts or promotions. For supermarkets like Aldi, such systems provide the ability to monitor how demographics shop, which helps Aldi create more effective marketing.

When you add in data like Aldi’s credit card payment information, with time of visits and the in-store footage (or simply the receipt, if video monitoring is a step too far for the marketers), the client can build a detailed picture of consumer behavior. If that credit card or account email address can tie the consumer to an online profile or identity too, then even more data points can be used in the analysis.

It’s a simple concept, but one that needs to be carefully managed – as it can come across as very Orwellian. This can be incredibly personal information, and even though it is just the logical progression of the store loyalty card (which helped revolutionize stocking and inventory practices), many consumers would object to its collection and use if they were just confronted with it.

However, and this is key for the likes of Aldi, if the data can be used to provide a benefit in exchange for the customer, by way of better service or cheaper shopping bills, then the data collection shouldn’t be seen as insidious. What’s more, with the advent of new retail technologies like Bluetooth beacons and computer-vision systems paired with CCTV cameras, customers can be tracked with much more detail – and if those systems form part of an industry-wide ecosystem, those customers can be monitored across their entire shopping trip, not just within one store.

“We are continually creating a better grocery store for our customers,” said Scott Patton, Aldi’s VP. “We selected Nielsen for its differentiation of consumer and retail data in the marketplace, so we can continue to focus on doing what we do best – save people money on their grocery bills.”

Nielsen claims it is a global leader in retail measurement services. Core to this is its purchasing data, which it says offers ‘comprehensive and timely information on market shares, competitive sales volumes and insights into distribution, pricing, merchandise, and promotion.’

It combines the data with some consulting services, pitching the package to fast-moving consumer goods (FMCG) brands and retailers that are looking to improve their margins – claiming a presence in over 100 countries, and sales data from more than 900,000 stores via brokered cooperation arrangements.

Usually targeting the point-of-sale (POS) terminals, Nielsen reverts to field-auditors when this data is not available. The company says it stringently validates this data before it is added to its software platform, where the physical sales data can be viewed alongside e-commerce data too.

Its rivals include the likes of technology platforms like IBM, SAP, and SAS, as well as smaller specialist providers like RetailNext or ShopperTrak, and consultancy businesses acting like systems integrators, such as McKinsey and Accenture’s Javelin.

Back in June, Nielsen launched its Connected System, which it describes as the FMCG industry’s ‘first truly open, cloud-based and highly scalable technology platform.’ Unveiled at the CoNEXTions Conference, the system claims to incorporate ‘the widest range of data, analytics, and role-based applications from Nielsen and a rapidly expanding group of Connected Partners.’

Those partners are key to the platform, and include Mastercard’s APT, which measures the cause-and-effect relationships between a business strategy and the consumer actions, Pathformance and its digital shopper marketing, and Prevedere’s business forecasting.

Using the partners, Nielsen can form pretty complete profiles for shoppers, based on the diverse data that the partner ecosystem can collect. Diversity is key, but the end-goal is the ability to accurately see how a business’ actions affect a shopper – to know whether an advertising strategy worked (so that an advertiser can be paid), or track where a dip or spike in sales stemmed from.

The ecosystem should provide a cross-platform view of consumer behavior, and with the emergence of smart home platforms and smart city applications, companies like Nielsen that depend on having a comprehensive amount of data to ingest into their decision-making processes will be clamoring to snap up these IoT companies into their ecosystems.

Doing so adds a vast amount more contextual data to the process, whether its being used to gauge a new advertising strategy or spot whether particular groups of shoppers could be better targeted while in a store through different layouts or promotions.

“Aldi is one of the fastest growing retailers in the USA, and, as such, needs access to increasing amounts of effective shopper and advertising data,” said Nielsen EVP Rob Hill. “We are humbled and proud that Aldi selected Nielsen as its strategic partner, and look forward to supporting Aldi’s growth and expansion initiatives within the US market.”