Halla, a taste intelligence company that helps grocers predict customer preferences in real time, has partnered with e-commerce platform Local Express to provide its independent grocers with an enhanced digital shopping experience for customers based on predictive behavior. As the pandemic has pushed more customers more quickly to e-commerce, grocers have had to adapt their services very quickly while trying to make e-commerce profitable.
Customers can opt in to the platform, either through a mobile app or an e-commerce website, and based on what they are purchasing and have purchased in the past, Halla is able to direct them to other products that fit what’s in their shopping cart, similar to Amazon’s recommendation function that drives 35% of the e-tailer’s sales.
“We are seeing anywhere from 6% consumer spend increase in-store in a brick-and-mortar environment where it’s much harder than just clicking add to cart on every additional recommended product. Online, we’ll see anywhere from 15- to 25-plus percent increase and that’s in dollar value per basket,” says Spencer Price, CEO and co-founder of Halla. He notes that a digital storefront is no longer enough for retailers, but that retailers need to make customers feel like they are in a store designed specifically for them.
“If [retailers] have a mobile checkout, a self-scan-and-go solution and a customer scans chips, we’re going to know to recommend that Chipotle salsa that [the customer] likes that is just down the aisle. And it pops up right there on the same phone or device that [the customer] uses. That’s the experience of that implementation. We also drive, generally speaking, an additional one shopping trip every couple of months. So that’s six plus trips a year, and that's extremely valuable for any retailer,” Price adds.
“The retailer has real concerns about a few things. One of the most important ones is profitability,” says Neal Gehrig, VP of sales for Local Express. One of the drawbacks of an e-commerce experience is the lack of impulse purchases, and customers are often buying more bulk items that result in larger baskets but often also fewer purchases overall. The collaboration between Halla and Local Express is able to replicate part of that impulse purchasing behavior. “With the Halla platform, we’re able to get the buyer to consume items in an impulse scenario. In addition, when I go to the store, I'm able to see new and unique items. That’s very difficult to do online, but we’re able to show those new items and unique items and items of relevance to that consumer. Now we start to blur the lines of what is an online shopping experience versus what’s an in-store experience.”
The API (application programming interface)-enabled ecosystem that the two companies have developed allows them and other partners to share information about the purchase habits of each user to help boost sales. The personalization component helps the retailer prevent cannibalization between online and in-store sales, Gehrig says, as the difference in shopping patterns between in store and online decline.
“We’re driving people to the store. What’s next is stealing the competitor’s market share and finding the online-only buyer because they are unique. If we don’t supply that online-only buyer with the environment they’re used to, they’re going to go look for those capabilities elsewhere. So now we have the full spectrum of capabilities,” Gehrig adds. “Now we’re giving [retailers] more consumers.”