KANSAS CITY - As technology further enhancers the retailer’s ability to personalize the grocery shopping experience, the grocers who give each customer a unique and tailored experience — whether it be online or in-store — will see the most customer loyalty and engagement.
In our digitally connected world, shoppers expect a seamless experience, and it’s important for retailers to know their customers and take care of their needs to create loyalty and increase basket size.
“Customer demand has moved to this space where customers essentially require a contextual and relevant experience to what they do all day every day,” said Tyler Renaghan, vice president of retail for Washington, DC-based Get Upside. “What that really translates into is you have to get them what they want when they want it. To accommodate this, we actually have to drill down to that individual level and then we have that opportunity to create these personalized experiences.”
Get Upside is a cashback app that works to help retailers understand who their customers are: who is coming in, with what frequency they’re coming in, and how much they’re spending. With Get Upside, retailers can offer customers exclusive cashback offers to reach new customers and keep re-engaging with them.
Learning preferences to drive personalization
In 2016 the founders of Los Angeles-based Halla, Gabriel Nipote, Spencer Price and Henry Michaelson, noticed a gap in the ability to personalize food recommendations and promotions in the grocery retail industry.
“When we ask anybody about their relationship with food, we get a totally unique answer,” said Nipote, chief operating officer of Halla. “Some people really focus on the nutritional aspects; some people have dietary needs; some people love different sensory experiences from taste to texture to everything else.”
Technology has made it easier than ever to reach customers with a personalized shopping experience, and when a study conducted in 2017 showed that 35% of Amazon’s total product sales were generated by personalized recommendations from AI technology, Halla’s co-founders investigated how personalization could impact the grocery industry.
What they found was that over the last few years, food data has become far more prevalent and easily accessible. Nipote and his co-founders recognized that there should be someone leveraging all of that data and developing software to make the shopping experience more personalized than ever — right down to the food products retailers are recommending and promoting to individual shoppers.
From there, Halla launched Taste Intelligence, a human preference engine built specifically for grocers to continually develop deeper knowledge about each customer’s preferences to deliver personalized recommendations, substitutions and search results.
Understanding each shopper through online shopping
As more and more shoppers adapt to online and omnichannel shopping, understanding customer preferences is easier than ever.
In the past, retailers have taken to using loyalty systems to track customer purchases to understand individual shopper habits. Ecommerce gives retailers the ability to do that on steroids, noted Barry Clogan, chief product officer of Miami-based digital commerce company, ThryveAI.
Online, it’s simpler to employ data technology to understand whether a customer is single, and shopping for themselves, or if they’re a mom shopping for a family of four.
“Understanding that consumer and the shopping mission they’re on via their past purchases and understanding their affluence or their propensity to engage or participate with promotions will drive the recommendations and the promotions that surface for particular individuals,” said Clogan. “The context with which shoppers are shopping allows you to be more personalized as well in terms of what you’re recommending, what you’re suggesting and what shopping mission of journey they’re on.”
ThyrveAI partners with Halla to provide real-time product recommendations and personalization on grocery e-commerce platforms. Halla employs a variety of AI techniques in a suite of software solutions that power online recommendations, substitutions and search results through machine learning based on individual shopping habits.
“There are a variety of ways you can use those fundamental pieces, finding complementary products for a specific user, or finding the best similar product or search result,” Nipote said. “We built those three atomic components of personalization to experience so grocers can leverage it in many different ways as the grocer becomes more technologically enabled and the online and instore experiences merge together.”
Online shopping also offers retailers more flexibility in what kind of content can be curated for each user, noted Clogan. With e-commerce, it’s easier for retailers to create video content, recipes, and stories about where food is sourced, and give customers information about the ingredients in their foods, which in turn helps customers feel more connected to their grocer.
Dallas-based software company Kibo helps retailers further personalize the shopping experience through clickstream data from individual shoppers. Kibo’s software remembers all of a user’s interactions over multiple shopping sessions and learns patterns of a shopper’s preferences in brands, package sizes and product attributes.
“These technologies deliver a much more personalized experience for the shopper, so you have a return of investment because customers buy those recommendations that are timely and relevant, and it helps increase basket sizes and the average order value,” said Meyar Sheik, president and chief commerce officer of Kibo. “The other thing it does is it helps automate what used to be manual merchandising, where everyone gets the same offer. Every visitor will start getting a different experience based on what they do and what they buy.”
Technology instore is the future of personalization
As shoppers become more integrated with digital technology, they are going to expect a connected and consistent shopping experience whether they are shopping in-store or online.
Instore, Kibo has the ability for retailers to offer their shoppers a personalized, auto-generated shopping list based on what an individual commonly purchases online. Sheik said all of that can be automated, and all the shopper has to do when they walk in the store is select items to add to their list.
Retailers can get customers in the store by using loyalty programs or online shopping data to send personalized digital coupons shoppers can use in-store, but there are also ways grocers can help customers feel like they’re getting a personalized experience in-store that rivals the technologically advanced personalization of online shopping.
“We predict a hybrid experience is going to be the future of grocery,” said Nipote. Already, brick-and-mortar stores are testing ideas like scan-and-go technology, smart shopping carts, and shelf displays that can help tailor the individual shopping experience. Nipote expects solutions like that to continue exploding over the next few years.
A few examples that Nipote cited include:
- Freezers and coolers that have digital screens that picture what options are behind the glass. As shoppers interact with the digital screen, the screen gathers data to optimize product offers for individual shoppers.
- Digital shelving tags that can change the price of products when they’re closer to expiration.
- Scan-and-go technology in which shoppers use an app on their phone to scan and pay for items.
“If a grocer has all of these digital avenues to interact with their customers, and the in-store experience is only getting more and more digital, we can interact with every one of those applications to give each shopper their very own store,” said Nipote.
ThryveAI is working to extend the company’s online shopping solutions to reach in-store customers too.
“In an online world, it’s a lot easier to surface those relevant promotions and recommendations and pre-populated basket items that you always buy, but instore is where it potentially gets interesting,” said Clogan.
ThryveAI offers a picking solution that retailers can have programmed to help customers find the location of products in the store. In the future, ThryveAI plans to offer shoppers the capability to use the company’s software to take their shopping list and plan the fastest route around the store to grab all of the products on the list.
“And then as I walk the aisles, there’s the ability to recommend promotions that are relevant to the consumer and offer a guided, personalized customer experience in-store,” said Clogan.