As COVID-19 continues to keep shoppers away from physical shopping, many are looking for more personalized digital engagement. According to McKinsey, these shifts place customer loyalty at risk, with 75% of U.S. consumers “trying a new shopping behavior in response to economic pressures, store closings and changing priorities.”
And though most grocers’ total sales are up, the increase is being driven by fewer customers spending more, creating pressure to better understand behavior. Grocery retailers are using a plethora of technologies in search of customer insights, everything from computer vision to cart and basket tracking to understand where shoppers go in the store and where they don’t.
A more recent development arising from ever-growing big data is the idea of creating digital doppelgangers; a digital duplicate of each shopper. Think of this doppelganger as the building of a very sophisticated shopper profile, drawn from hundreds, even thousands, of data attributes generated from customer purchase data, location data, product ingredient data, third-party data and more.
This digital doppelganger is used to model customer behavior in the digital world to learn how to most effectively engage with each individual customer. By understanding how a shopper may react to a given promotion, grocers can provide a foundation for advanced, hyperpersonalized marketing.
How Can Grocers Create Digital Doppelgangers?
The process begins with bringing together all the different data streams in one place. That challenge alone can be a significant one as many retailers continue to be challenged by disparate data silos and poor data discipline.
Bringing together the data is only the first step. The retailer then has to have an engine capable of processing all this data in real time to create the digital duplicate, scoring every product purchased along with ingesting all the other data to create the complex and sophisticated profile.
That profile then supports AI-powered modeling to understand the best way to engage with each individual customer.
What Are the Benefits?
By creating digital doppelgangers, retailers can gain powerful insights to customer behavior and better understand what specific promotions—both products and prices—will influence each individual customer. More specifically, grocers using this approach can:
- Help shoppers discover new products that match their preferences.
- Engage with shoppers throughout the purchase journey from online to in store.
- Test and trial different marketing scenarios to better understand customer behavior.
- Understand how each unique customer responds to promotional offers and provide targeted campaigns that are most likely to convert.
- Power up general insights and understanding of shopper behavior that can inform marketing campaigns, promotions and partnerships.
- Predict with uncanny accuracy which specific shoppers, of all the new shoppers appearing in-store for the first time, will stick around to become valuable and loyal.
- Identify which valuable shoppers are most at risk of defecting to a new competitor.
Technology Moves the Battleground
As retailers such as Amazon, Kroger and Weis Markets are finding, AI and machine learning capabilities—like those leveraged by digital doppelgangers—are moving the battleground from the product to the individual customer, and keeping score by tracking customer share of wallet and lifetime value.
As COVID-19 accelerates industry development and inspires radically different economic models, the DNA of traditional retail is becoming digitized and mixed with accelerating and converging technologies. Leveraging digital doppelgangers is just one way grocers can evolve to become part of this new, higher-order ecosystem. If they do, they’ll benefit from improved customer loyalty, customer lifetime value and satisfaction.
Gary Hawkins, is CEO of the Center for Advancing Retail & Technology (CART) and an adviser to Birdzi.