Data science group Dunnhumby has compiled its Retailer Preference Index and Texas-based H-E-B ranks 4th among 12 other national competitors.
The determining factors for the index include prices, quality, digital, operations, convenience, discounts/rewards/information, and speed.
Dunnhumby described the following as the keys to success for H-E-B:
Regional retailer H-E-B, based in Texas, thrives on the Quality it offers its Customers, which places it in the First Quartile overall, right up there with non-traditional grocery retailers Trader Joe’s, Costco, and Amazon. How can this traditional, regional retailer maintain such a high standing among the industry’s disruptors with a Quality-first focus? The answer again lies in focusing on Private Label, Quality in the right places, and delivering on retail basics to run a smooth, cost-efficient retail operation -- all of which keep their Value Perception from suffering too much.
- H-E-B may grab headlines for the Quality of its experience and products, but their value perception, while not clearly superior to the majority of the market, is above average. They likely maintain this with a focus on providing a superior Private Brand offering. Their Private Brand scores are equal to that of well-known Private Brand leaders Costco and Trader Joe’s. This focus allows them to provide higher Quality products at more competitive Prices.
- This focus on Private Brand underscores H-E-B’s focus on getting their overall product selection right. They also have some of the highest scores in the study for having the right variety of products to meet a Customer’s needs.
- At least some of their stores demonstrate smart approaches to store operations – instead of an “invisible” storeroom far removed from the floor, the storeroom frames up the entire store in a narrow extra ring, with products stored as close as possible to where they are stocked. This cost-efficient approach to assortment selection and stock keeping likely allows them to maintain higher levels of Quality at lower Prices while preserving margins.
- Some of their stores clearly provide a unique experience with solid Customer service. They have effectively executed the “store within a store” approach, offering clear signage indicating where things are. They have trendy sections (e.g. a whole set for those on the Paleo diet) and they showcase their local Texas pride throughout the store, featuring local Texas products. They do this without appearing to be too upscale – just clean and well-maintained.