Joel Percy is an skilled loyalty and CRM govt with deep retail personalization and knowledge monetization experience. At Loblaw Corporations in Canada, he helped design, launch and run PC Plus, one of many world’s first absolutely customized digital rewards applications. He has additionally consulted with retailers across the globe on the design of customized advertising and marketing applications. He’s at the moment the regional director at Eagle Eye, the place he helps shoppers develop loyalty and drive gross sales by constructing digital connections with their clients.
With 2023 firmly within the books, it’s time to think about what 2024 will deliver for supermarkets, grocers, and retailers of all stripes. The grocery business loved vital income progress within the first full post-pandemic yr. Will this new yr maintain the identical?
Forecasts are pointing to sure. In keeping with Coresight Analysis, in July 2023, the U.S. grocery business was anticipated to see progress charges of 5.6% for a complete worth of $1.5 trillion. Regardless of inflationary pressures, this stage of progress signifies that customers proceed to spend.
The place is that this progress coming from? One key supply is the continued rise in digital gross sales; grocers are already seeing vital progress from on-line channels. Latest knowledge point out that the U.S. on-line grocery market was price $20.66 billion in 2019 and is anticipated to succeed in $41.33 billion by 2027.
No matter channel, nonetheless, creating an optimized buyer expertise can be essential for grocers seeking to improve their progress in 2024. Though consumers are nonetheless spending, Eagle Eye’s Grocery’s Nice Loyalty Alternative report reveals that 41% of Individuals now store much less general.
With these details in thoughts, what are present shopper buying behaviors telling grocery CEOs is in retailer for 2024?
Superior personalization is the important thing to loyalty
Assuming all customers are on the lookout for reductions and reductions alone is an incorrect conclusion. Though worth is an enormous influencer, consumers search for extra. A Pymnts.com report from February 2023 signifies that 77.3% of Individuals mentioned comfort influenced the place they store, which was the main issue.
The idea of “worth” as routinely that means reductions has additionally been contraindicated by our analysis, which discovered that 62% of North Individuals mentioned reductions had been essentially the most essential think about selecting a model, however 73% mentioned it was worth.
“Worth” typically means giving clients what they need when they need it… and AI is poised to assist grocers do exactly that. AI is anticipated to allow grocers to ship personalization at scale, and people who put money into real-time/interactive digital content material and communications will in the end be the differentiating issue.
Once more, Eagle Eye analysis bears out the advantages of this strategy. Roughly 84% of customers mentioned customized provides would assist them to economize on the shelf. Equally, 71% of customers mentioned that real-time promotions whereas buying would make them take into account a product.
Grocers should transfer away from serving a restricted variety of cookie-cutter provides to delivering provides uniquely designed for each shopper. In keeping with Suppose With Google, 40% of consumers spent extra when their expertise was customized.
Some large retail names are already nicely forward of the sport.
Starbucks is taken into account a stand-out retailer on this respect. With AI, it’s carried out its cellular makeover and now sends customers distinctive provides based mostly on varied behavioral metrics. At the moment, Starbucks has 400,000 variations of customized messages that their cellular app can ship.
However this isn’t an optionally available additional, as analysis from AdAge discovered. Shoppers have turn out to be so used to individualized interactions that 44% mentioned they might store elsewhere in the event that they didn’t obtain the personalization they anticipated from a particular model or retailer. This illustrates that counting on conventional discount-heavy promotional methods isn’t sufficient to reach the grocery panorama in 2024.
Cell “phone-out” searching for 2024
The cellular grocery expertise has turn out to be a staple of the North American market. Research repeatedly present customers’ want to buy by way of cellular, with 88% of individuals having no less than one buying app on their telephone.
Nevertheless it’s a mistake to imagine that on-line and cellular buying are distinct from the in-store expertise. Suppose With Google discovered that 56% of in-store consumers used their telephones to analysis objects and even store whereas they had been in a retailer in simply the final week.
In different phrases, grocers should acknowledge and benefit from this habits. With customers utilizing their telephones as customized buying companions, it’s a possibility to create a extra dynamic buying expertise. In keeping with Deloitte, that is one thing that may repay its funding many occasions over, with 56 cents out of each greenback spent in brick-and-mortar shops being influenced by digital interactions.
Whether or not permitting clients to scan objects in-store to get extra details about them on their telephones and even utilizing gamification to make buying extra enjoyable, grocers have loads of possibilities to harness the facility of phone-out buying.
The latter might present grocers with a aggressive edge. Eagle Eye analysis signifies that 64% of North Individuals are prepared to or actively take part in varied types of gamification, resembling contests, video games, and challenges. But solely 43% of loyalty applications/apps have these options.
Getting into the period of the one buying channel
At this time, grocers have numerous buying channels. Each could have a very totally different content material advertising and marketing technique and related knowledge.
Manufacturers not utilizing converged content material and breaking down knowledge siloes aren’t taking full benefit of the belongings at their disposal. Combining knowledge, content material, and buyer insights allows retailers to construct extra holistic buyer views and provide a genuinely omnichannel expertise.
The Harvard Enterprise Evaluation highlighted one of many largest obstacles retailers needed to adopting superior analytics was the siloed nature of current knowledge. Retail manufacturers should examine how they’ll break the siloes inherent of their knowledge to construct a extra streamlined group and create the only buyer view they should generate actionable insights and gas individualized advertising and marketing methods.
Grocers can not produce superior personalization or a real omnichannel expertise with out first breaking down these siloes. The information is already there. It simply takes companies to determine how you can harness it correctly.
Distinctive experiences each time
All the pieces on this article will be crystallized right into a want for distinctive buying experiences that match people wherever and wherever they store. By embracing rising applied sciences like AI and rethinking their approaches to omnichannel interactions, grocers could make 2024 the yr that they remodel conventional retail practices into trendy, customer-centric buying experiences.
However to take action, they need to adapt shortly to altering buyer habits and expectations. Grocery retailers which can be already centered on increasing their personalization capabilities, making buying a phone-out exercise, and breaking down knowledge and content material siloes are in the very best place to capitalize on 2024 tendencies.
