Grocery retailers are making substantial investments in enhancing their capacity to personalize the digital experience through the utilization of consumer data. According to PYMNTS research, these efforts are yielding positive results.
The Digital Food & Beverage Conference recently convened virtually, bringing together grocers, consumer-packaged goods (CPG) brands, and solution providers. Among the featured speakers was Abhishek Jadon, PepsiCo’s Global Head of Media Partnerships, Innovation, and Marketing Capabilities, who discussed the significance of personalization in the industry. PYMNTS’ research underscores the increasing importance of such capabilities.
PYMNTS’ study, “Retail Payments Innovation Year in Review: How Real-Time Payments Drive the in-Store Customer Journey,” drew insights from a survey involving 300 major retailers in the United States and the United Kingdom. The data revealed that 50% of grocers are presently innovating their ability to track customers’ purchase history across all channels. Additionally, 37% are enhancing their data analytics capabilities, and 32% are investing in the improvement of their loyalty programs.
In recent weeks, numerous grocers and businesses reliant on grocery sales have intensified their personalization endeavors. Instacart, for example, launched its Ask Instacart tool integrated with ChatGPT, enabling personalized recommendations. Shipt, the delivery aggregator owned by Target, introduced a dashboard featuring personalized offers. METRO Inc., a Canadian grocer with nearly 1,000 stores, unveiled a new and more personalized rewards program. The Save Mart Companies inaugurated a retail media network that facilitates the delivery of personalized offers for consumer-packaged goods brands.
Major players in the industry are heavily investing in personalization capabilities, exemplified by Kroger, the largest pure-play grocer in the United States. Yael Cosset, Kroger’s Chief Information Officer and Senior Vice President, emphasized the company’s commitment to data-driven initiatives. He stated, “Kroger pioneered the personalization approach because we wanted to understand how customers engaged with our offers to make them better and more relevant. Our best-in-class data science program creates personalized experiences that provide important savings on the very specific items we know our customers love.” Kroger’s focus on personalization has yielded significant savings for customers, amounting to $1.4 billion in the previous year alone.
Another example is Meijer, a supermarket chain based in Michigan with over 500 stores across the Midwest and Kentucky. Meijer recently updated its mPerks loyalty program to enhance its rewards personalization capabilities, ensuring a more tailored experience for customers.
The effectiveness of personalized experiences delivered through digital channels is evident in the stronger customer loyalty demonstrated by eGrocers compared to their brick-and-mortar counterparts. PYMNTS’ Consumer Inflation Sentiment study, “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” surveyed more than 2,100 U.S. consumers and found that 27% of highly brand loyal shoppers made their most recent grocery purchase online. In contrast, only 18% of those motivated by deals opted for online purchases. This indicates that eCommerce shoppers are 50% more likely to exhibit high loyalty.
Personalization capabilities enable grocers to replicate some of the benefits of in-person service that might be lost in digital translation. John Ross, President and CEO of the Independent Grocers Alliance (IGA), explained the potential of loyalty programs, stating, “Digital technology does allow you to replicate a lot of the effects of high quality of service. Loyalty programs can create the sense of recognition and engagement no different than if you walk into one of our stores where you’ve been shopping for 20 years, and we say, ‘Hey, Mrs. Jones, how are you?'”
The growing emphasis on personalization in the grocery industry underscores its pivotal role in driving customer satisfaction, loyalty, and sales. By leveraging consumer data and investing in innovative technologies, grocers can forge meaningful connections with customers in the digital realm, emulating the personalized experience traditionally associated with brick-and-mortar interactions.