Personalization to Enhance the Supermarket Experience
When Imperial first entered the “non-foods” business in 1939, consumer products were introduced into small local grocery and specialty food stores to enhance the customer shopping experience. The local store owner behind the counter could recommend not only the best size and cut of meat for his patron’s family dinner, but also the new and improved formula of hand cream to alleviate her cracked cuticles. With the growth of supermarkets and the proliferation of online shopping, much of the personalized in-store experience has been replaced with anonymity. However, today’s “experience economy,” marked by the need for brick-and-mortar retail to keep pace with online shopping, has increased demand, particularly among millennials, for a personalized in-store shopping experience. Wipro reports, “For customers to have a uniform, seamless shopping experience, the level of personalization in store must be akin to online.” Millennials’ appetite for connection, engagement, spontaneity and experimentation in their consumer world punctuates not only the importance of this personalized experience but also the opportunity gained from this retail approach.
According to a 2014 Forbes article, “personalization is not a trend. It is a marketing tsunami.” The greatest benefit of personalized marketing, reports Conversant, is increased repeat purchases, improved response rate, increased sales and stronger brand perception. The greatest challenges: higher media costs marketing/management complexity and development costs. In other words, while personalized marketing may be more costly, it draws higher spend from targeted consumers. This appears to be true in the grocery channel, as well. According to a G/O Digital study on the marketing of consumer packaged goods, over 75% of surveyed consumers were likely to make in-store purchases in response to personalized, locally relevant digital ads.
The supermarket industry can benefit from two key approaches to enhancing the personalized shopping experience for consumers: digital marketing and in-store engagement. While many supermarket retailers have recognized the value of personalized marketing to procure customer loyalty, enhancements to engage customers in the supermarket shopping experience can specifically pay dividends for sales of non-foods categories.
- Targeted promotions: Digital marketing allows retailers to personalize notifications about in-store sales and recommended product based on consumers’ shopping habits. For example, individualized sales history of health, beauty and wellness (HBW) items, tracked through loyalty cards, can tune retailers into which brands are most relevant to which shoppers and how to target communication about specific promotions and items. A dedicated consumer of EOS lip balms or L’Oreal haircare, for example, is likely to appreciate updates of new flavor or product launches.
- Demographic relevance: Studies show that consumers (especially millennials) appreciate advice on purchases to best meet their needs, as long it is not overwhelming or invasive. Basic demographic information and shopping history about customers can be used to guide consumers toward top items among shoppers who share similar profile information (e.g. natural baby items for new moms, age-specific skincare products, or ethnically relevant haircare).
- Product complements: Personalized marketing can also point customers toward non-foods items that complement the foods they buy. For example, making customers aware of a blender bottles to accompany powder supplements, a new peeler for preparing those winter root vegetables, or even an organic dog toy to go with the natural dog food previously purchased, can add convenience for the consumer and dollar sales for the retailer.
- In-store demos: In-store demos engage customers and enhance the personal experience of supermarket shopping. Food-related housewares demos (e.g. choppers, blenders, “spiralizers”) can inspire creative cooking and food preparation, boosting both food and incremental non-foods sales.
Enhancing the personalized shopping experience through digital and in-store tools can bolster customer loyalty and store sales. But overdoing it can overwhelm shoppers. Best-practice personalization can enhance options and opportunities for customers in non-foods categories, as well as the value of their supermarket shopping trips.