Every retailer is looking to increase sales, and there is no better way to do that than by providing sav- ings on products each customer wants to buy. Mar- keting personalization is proven to increase sales to participating customers by 5% or more. Marketing personalization—precision-targeted promotions relevant to the individual customer household—has been a cornerstone of The Kro- ger Co.’s widely admired customer-centric strategy for more than a decade. I can speak to the power of
personalization from my own retail experience, where we
routinely saw identical customer household increases of
7% or more in year-over-year spending from customers
who participated in our personalized marketing program.
Well-known regional retailers are seeing similar results
from their programs.
And if you need another reason to pursue marketing
personalization, consider this: Shoppers today expect
GROWING YOUR BIZ
promotional relevancy. They are getting it from Amazon,
Kroger and other key retailers. Personalized marketing is
rapidly becoming a cost of entry as supermarket industry
competition focuses on digital customer engagement and
shoppers bypass mass promotions in the same way they
fast-forward through irrelevant ads on T.V.
While retailers with loyalty programs have a head start,
traditional loyalty is no longer a prerequisite for providing
marketing personalization. Leading solutions enable any
customer to identify favorite products and build a profile
to help in providing relevancy. With the use of AI, even a
few transactions can begin to provide powerful insights
Extending the Benefits, Evaluating Options
As online sales grow, retailers have customer-identified
transactions by default. But they should extend marketing
personalization to all customers—not just online shoppers.
Sophisticated marketing personalization is no longer
the province of only the largest retailers. There are a growing number of solutions available to retailers of all sizes.
The most important things to look for when evaluating
solution providers include:
True segment-of-one personalization. Customer
segment-based targeting is no longer the most effective
approach. The best solutions leverage big data to maintain hundreds of attributes for each individual shopper
and apply AI to drive personalization.
Strategic personalization. While giving customers
offers on items they frequently purchase does provide
some value, leading retailers strategically grow customer
share of wallet by communicating a mix of relevant promotions to each shopper: some offers on frequently purchased products to win the shopping trip, and then savings on other relevant products to grow basket size.
Omnichannel integration. Many solution providers
will state that they are omnichannel, but most solutions
provide only an API requiring the retailer to integrate the
targeted content into their website, mobile app and email.
The best solutions are tightly integrated with web and
mobile apps, providing a real-time view to intent: what’s
on the shopping list, the digital coupons the customer just
clipped, products searched for and so on. This kind of
integration requires sophisticated IT resources, and even
large regional retailers should look to solution platforms
that include this capability.
Vehicles. Create regular communication vehicles that
customers look for, such as a weekly personalized ad, a
weekly digital coupon email that communicates the most
relevant coupons for each customer, etc.
Looking across retailers with effective personalized marketing initiatives, we see these best practices:
Gary Hawkins is the
founder and CEO of the
Center for Advancing Retail
Looking for Sales
Growth? Be Relevant
to Your Shoppers
Personalization is a proven path to increasing sales.
By Gary Hawkins
Expert views on retail strategy, talent management and leadership development