A brave new approach to digital personalization
The global grocery shopping experience is evolving every day.
Factors that were not relevant or even in existence ten years ago are now important and key differentiators in the grocery marketplace, with digital channels standing at the forefront in driving change.
In the new world of personalization, it is imperative for retailers to build a promotions strategy for the digital age. Traditional promotion ROI is disappointing with 20 to 50 per cent of promotions generating no noticeable lift in sales and of those, 30 to 30 per cent go as far as diluting the margins on the product.
The loss of interest is not necessarily in the promotions themselves, the channels however are shifting and new channels are gaining traction.
An example of this shift in channels is the timeless grocery flyer. While still the number one factor when choosing a grocery store, with 80% of shoppers placing an importance on traditional trade promotions, the shift to online and e-flyers is gaining traction with substantial ROI.
Wanting to deeper dive into how customers truly interact with the store channels home renovation chain, Rona, conducted a nationwide test earlier this year and saw sales double after replacing the traditional printed promotion flyer with an extended digital offering. This was a daring move given the data surrounding the popularity of the in-store flyer however the ability to be responsive and in the moment allowed for real time promotions, personalization, and reactive messaging – a shift from traditional, offering a new digital experience for Rona shoppers.
Personalization and digital promotions are becoming more significant for the North American shopper, according to a 2016 survey by Precima.
With 58% of shoppers asking for email offers and 44% wanting to see promotional offers tailored to them through their mobile device, retailers need to create not only convenience for customers through digital communication but do so in a way in that engages them with specific, relevant content to suit their needs, wants, and asks.
In order to create these on demand experiences retailers need the right data and strategy to leverage insights for personalized content through multiple channels.
One misstep in integrating promotions into digital channels however is treating digital as simply an ecommerce replication of the traditional. Retail channels need to act as a hybrid of traditional presence and digital technology. For too long retailers used digital as just another channel, using it as an online version of in-store. Not only is this redundant, but is in no way shaping positive, differentiating experiences for customers.
Similarly, regarding promotion, far too many grocers believe that delivering the flyer to a mobile app counts as personalization. Using a highly flexible and personal channel like mobile to deliver a broadcast message is a significant missed opportunity. Digital should demonstrate that the retailer is fundamentally recognizing the needs the customer has for a digital experience and while ecommerce in grocery is still a single-digit percentage, trends indicate it will increasingly be a critical channel.
Personalization and digital channels not only enable leading retailers to customize promotions to the individual customer, they also allow for much more dynamic customer engagement (at the right time – not just weekly) and to rapidly monitor, assess and innovate promotions in the moment to maximize results.
In order for retailers to win they need to be strategic about promotional offers across all channels and implement a customer centric mentality. The brave new promotions world requires a brave new approach, powered by analytics and insights to drive relevance. Now is the time for game changing strategies.