Today, many grocery store chains are performing customer analysis on massive sets of data, finding insights that help them better engage customers and, in turn, drive revenue. Understanding how to leverage big data is critical in an industry where margins are razor thin and waste is a widespread issue. By collecting and analyzing shopper information, grocers can hone their approach for everything from marketing activities and pricing to product assortments and customer service.

With the right analytics tools, grocers can bring together multiple data sources and get information in real-time, letting them accurately forecast product demand, optimize inventory levels and turn-rates, and reduce spoilage of perishable goods. Below are three ways leading grocery chains are using data analytics:

Improve the customer shopping experience

According to a recent SHSFoodThink white paper “Are We Chain Obsessed?,” 64 percent of consumers said that the overall shopping experience is what keeps them coming back—not necessarily the products themselves. By using insights derived from data on transactions, consumer purchasing behavior, social media, promotional activity, and customer traffic patterns, grocers can take steps to ensure they’re engaging with shoppers where it matters most.

For example, they can take a close look at customer foot traffic to optimize store layouts, or identify attrition risks for customers who haven’t recently purchased staple items, like milk. Likewise, chains can base product assortments on demonstrated customer needs and purchase patterns in very specific areas. Whether it’s by rethinking store layouts or providing store associates with mobile apps to better serve customers, analytics can help grocers transform customer expectations.

Streamline the supply chain

Grocers can also use analytics to monitor the sources of their products, keep closer tabs on production processes and quality control, and increase transparency with consumers about their food production practices. Suppliers stand to benefit from analytics as well, with access to secure, personalized views of data related to product sales performance, inventory, profitability, and promotional effectiveness. Providing suppliers with timely, valuable business insight boosts collaboration, drives performance improvement, and reduces waste.

Build better marketing programs

Loyalty programs provide grocers with a wealth of information to help them identify customer segments and accurately define product preferences. By combining this data with other sources of information—like nutritional trends, preferred method of receiving promotions, weather-related events, and customer traffic patterns—grocers can focus on improving, and driving revenue from, the overall shopping experience. For example, grocers can use analytics to personalize the promotions they offer to customers based on what they’re most likely to purchase. They can also time promotions appropriately, and offer codes to shoppers who frequently purchase certain items.