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How Personalization Is Reshaping the Shopping Experience

Digital Customer Engagement in Supermarket Retail: Part 2

Amazon, the nemesis of brick & mortar retailers, is a master at helping shoppers discover relevant products the shopper may be interested in. Amazon leverages a vast amount of knowledge it collects on each shopper to select a few key products to suggest to shoppers drawn from the estimated 600 million products sold. This shopper intelligence includes past purchases, what the shopper has searched for in the past, and even the shopper’s browsing and clicking history. This ability to personalize each interaction with each individual shopper is powerful. In fact, 56% of consumers say Amazon demonstrates an understanding of their individual preferences and needs on a regular basis, according to research by Swirl Networks.

Now, imagine that capability turned loose on Whole Foods shoppers. And consider the impact of Amazon presenting relevant Whole Foods products to the tens of millions of shoppers across its platform each day as it takes Whole Foods private label products online.

Many supermarket executives do not yet fully appreciate the power of discovery as executed so well by Amazon and yet brick & mortar retailers have a massive opportunity to help shoppers discover products of interest across the store. What’s more, a growing number of shoppers—especially millennials—are interested in the story behind the product, wanting to know where it’s from, sustainability information, and the values espoused by the manufacturer. All this is tailor-made for making product discovery exciting and engaging.

For more than the past decade, Kroger has taken a more direct approach to marketing personalization, providing savings on specific products that each customer household frequently purchases. This strategy has helped Kroger win a growing number of shopping trips and bigger baskets as customers consolidate their shopping. Marketing personalization is a centerpiece of Kroger’s Customer First strategy and has been key to the company’s performance in recent years.

Kroger’s success has led other Tier 1 retailers like Albertsons-Safeway and Ahold to adopt a similar customer-centric strategy. While Tier 1 retailers may be able to afford the consulting agency model, with its accompanying army of data analysts, as espoused by dunnhumby, Symphony EYC, and others, regional retailers have found it to be an expensive proposition. But technology is disrupting and transforming all areas of business today and marketing is no exception. Artificial intelligence and machine learning feeding off big data and providing services through the cloud not only lower the cost to deploy sophisticated personalization, but provide the next generation tools that retailers need.

The use of customer segments to underpin personalized marketing is yesterday’s approach. Today’s solutions leverage hundreds of attributes, calculated and maintained at the individual shopper level, to power true segment-of-one strategic personalization. AI and machine learning power providing the right promotions—presented at the right time and place across every channel—to win the shopping trip, grow baskets, increase shopping trips, and maximize retention. This is the new approach traditional retailers need to compete against the likes of Amazon and Kroger.

Personalization is extending far beyond offers and into the shopping experience itself as retailers provide valuable new services to their shoppers.

Coborn’s is in the vanguard of retailers employing new sophisticated technologies to meld the digital and physical shopping experience. Shoppers at Coborn’s are greeted as they enter the store, triggered by a beacon interacting with the Coborn’s app. Knowing the store the shopper just walked into, the app automatically sorts the customer’s shopping list by aisle for that store. The shopper is provided relevant offers as they move around the store triggered by real-time location. Coupons are presented in order of relevancy making it easy for the shopper to find savings on products they like to buy. And Coborn’s shoppers can make use of a product locator function in the app, easily finding products in the store via a Google map like capability.

Personalization is not stopping at offers or even the in-store experience. Leading retailers are focused on implementing personalized pricing to drive even more gains. Imagine being able to provide the right product at the right price to each individual shopper to win the trip or grow the basket. Big data and artificial intelligence make promotion and pricing optimization at the individual customer level practical. And in a world demanding evermore ROI from marketing expenditures, personalized pricing is inevitable. The stealth battle for customer share-of-wallet is just getting started.

Editor’s Note: This is the second article in a four-part series. Part one can be found here.

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