4 Major Players Leveraging Personalization in the Digital Grocery Industry
At A Glance
- Grocery industry has become competitive due to market disruption, omnichannel revolution, pricing pressure, and price transparency
- Fiercely competitive nature of the market makes it difficult for grocers to continue with their conventional differentiation approach
- This is where differentiation through ‘personalization’ comes into play
- Many market players can increase customer loyalty and gain a competitive advantage using personalization
- This article brings forth significant players in the market that are leveraging personalization to become a favorite among customers
The environment in the grocery industry is extremely competitive for various reasons including market disruption, omnichannel revolution, pricing pressure, and price transparency. The fiercely competitive nature of the market makes it difficult for grocers to continue with their conventional differentiation approach. Grocers need to look beyond simple strategic pricing, promotional offers, or unique and expanded selection.
This is where differentiation through ‘personalization’ comes into play. Through personalization, grocery retailers can create a unique experience tailored to each customer. Creating a highly-personalized experience for millions of customers by leveraging sophisticated and complex data sciences is difficult to replicate. As a result, many market players can increase customer loyalty and gain a competitive advantage.
Here, we bring forth significant players in the market that are leveraging personalization to become a favorite among customers:
One of the critical foundations of Kroger’s go-to-market strategy is personalization. The company uses predictive analytics to serve customers at the right time with the best value. Due to its customers' increased engagement with personalized coupons and fuel rewards in 2022, Kroger saw increased customer loyalty. Engagement with digital coupons rose to an all-time high as consumers sought more methods to save. Kroger's consumers could save more than $1.4 billion on the products they needed and wanted, thanks to the combination of paper and digital coupons. To offer even more value, Kroger introduced Boost last year, which is the most affordable membership in the industry nationwide.
Kroger focuses on understanding its customers, thereby, building capabilities to provide recommendations or deliver personalized offers on the products that they value the most. The goal is to help customers save time and make their lives simpler. “In return, our customers reward us with their trust and loyalty, consistently ranking us among the best at being able to offer personalized savings and solutions that meet their needs,” said Kroger’s Chairman and CEO, William McMullen, in the earnings note.
Walmart considers itself an omnichannel retailer that is people-led and tech-powered to help consumers lead better lives and save money. Recently, the company revealed a new set of features for its mobile app and eCommerce website that prioritize ease of shopping and personalization. Among these features include an online styling tool that provides suggestions on accessories and other items; this feature is offered by the outfitting platform Stylitics. Additionally, Walmart introduced a shopping filter for online grocery shoppers that indicates whether a particular product can be bought with SNAP benefits.
“Regardless of how our customers pay for their food, we want them to be able to enjoy convenient shopping options to fit their schedules. And we want to make the experience as seamless as possible for them,” said the Executive Vice President and Chief eCommerce Officer of Walmart U.S., Tom Ward. “When shopping for grocery items on Walmart.com, customers can select a filter to just view EBT or SNAP-eligible items and can easily see identify EBT-eligible products through clear badging on the item and search pages.”
Albertsons Company is enhancing its personalization capabilities by collaborating with other businesses to increase its data access. For instance, Albertsons uses Adobe Experience Cloud by utlizing cross-channel data to generate insights that fuel personalization and help new services specific to the brand.
“These days, it is no longer enough to simply keep pace with a changing customer base. We need to be a step ahead, looking around the corner to what people will expect in their grocery shopping experience,” said Albertsons Companies’ EVP and Chief Customer and Digital Officer, Chris Rupp. “As we boost our omnichannel offerings, we are relying on Adobe Experience Cloud apps to help us get more value from data and leverage cross-channel insights to improve the overall shopping experience. Partners like Adobe will help Albertsons Cos. reimagine the future of grocery shopping.”
Ahold Delhaize leverages customer data to provide targeted rewards in an effort to fight inflation-related belt-tightening. The company attributed its comparable sales growth (excluding gas) in Q4 2022 of 9.3% and 5.7% in U.S. and Europe respectively to further rolling out personalized value through its omnichannel loyalty program.
“The U.S. brands' sales from loyalty programs and online orders reached all-time highs. This has been a trend we have seen building throughout the year, as our consistent investment in growing these capabilities continues to pay off,” said Ahold Delhaize’s President and CEO, Frans Muller, in its fourth quarter (2022) release note. “Our brands' customer relationship management campaigns are a good example, now reaching around 30 million households and delivering over 10 billion personalized offers annually.”