In a recent presentation given by Keith Janson, director of Kroger Customer Communications at 84.51°, research revealed that 81% of grocery shoppers are comfortable with giving private information in exchange for relevant offers.
Also revealed in this presentation at the Advertising Research Foundation Shopper Insights Conference, was that as personalization is growing, 90% of in-store sales are expected to be digitally influenced by 2021. Coupled with the fact that online grocery is popular among 52 million U.S. consumers and growing, grocers will need to create an omnichannel experience for shoppers moving forward if they want to see profits.
FierceRetail spoke with Megan Moglia, senior vice president of customer strategy and activation at 84.51°, to learn more about what grocery personalization looks like in 2017 and where it is headed.
FierceRetail (FR): How important is investing in the latest technology when it comes to creating a personalized shopping experience?
Megan Moglia (MM): Having the right technology is critical in personalizing the experience. This means having technology that is flexible to change with the customer experience over time and collect the right data along the journey. If it’s a black box, you’ll spend years reinvesting in capabilities that are outdated by the time they are launched to the customer.
FR: What will happen to grocers who don't have the latest personalization technology in the next few years?
MM: They’ll continue to focus on pricing strategies likely around lower prices on the products themselves or investing in experiences driven by people. Investment will be driven through mass channels and messages, meaning they’ll be interrupted by retailers enabling new ways to get product to people through technology and through truly relevant messages, offers and experiences.
FR: What are some of the latest and greatest technologies that you see grocers using and how is it positively (or negatively) affecting their business?
MM: Click-and-collect or click-and-deliver is by far the most prevalent new technology being used by grocers whether they are doing it themselves or hiring a third party to manage it for them. It’s allowing the grocer to meet the customer on their terms and creating a deeper level of customer engagement with the retailer, which will ultimately pay off in increased customer loyalty and spend.
FR: What are some of the biggest challenges for grocers when it comes to personalizing the in-store experience?
MM: Translating the digital experience to the store experience is extremely difficult. Digitally, the message and product can be changed based on who is viewing the experience at any point in time. In-store, product and message is static and it’s typically being viewed simultaneously by many shoppers. Integrating technology for personalization in the store means creating a compelling reason to engage with a device as you shop. It has to be so compelling that customers are willing to change their ingrained behaviors. Or the store associate has to be empowered with the right capabilities to deliver personalized experiences. This means finding efficiencies in store processes so that associates can spend more time with customers using technology together while ensuring the shelves stay stocked.
FR: Ultimately, will online grocery shopping grow significantly in the next few years or do you think that there are still a lot of kinks to work out?
MM: The supply chain is perhaps grocery’s most significant challenge for online success. Limiting substitutions due to out-of-stock situations in stores and determining the most efficient and streamlined way to set up warehouses to move product to customers will be critical to growing the online business.
FR: Beyond picking out produce, what are some of the other consumer barriers to online grocery shopping?
MM: A major barrier is around substitutions of out-of-stock product and overall item availability, followed by timing of the order pick-up. In addition, there are barriers that are unique to retailers or third-party providers around loyalty benefits, ease of ordering and fees for delivery/pickup service (that may be a roadblock for customers).
FR: What else can you tell us about the future of omnichannel grocery shopping?
MM: As trite as this is to say, it’s definitely here to stay. Most important is that retailers must think about how all the channels deliver a converged and cohesive experience for the customer. If channels are managed separately rather than integrated, customers will be frustrated and retailers will lose the power of technology to drive loyalty and differentiation. It’s one thing to order several unique items from an online retailer in a given transaction; it’s quite another to think about how to build a basket of items to create a meal and personalize that basket based on their preferences for things like brand, flavor, price, etc.