I’ve been doing my best to confuse my grocer, but so far they are keeping up with me. Kroger clearly has an appetite for personalized communications, and over the past few months they have served up several real-time offers that have kept me and my expensive foodie tastes from going elsewhere. In a time of cost-conscious shoppers and big-box price competition, this type of relevance is becoming an increasingly important strategy for grocers who want to hang onto their high-value, high-potential customers.
My first trick was to muddle the basket. A friend won a gas stipend from work, and so for a month we shopped together, and he let me scan my Kroger Plus loyalty card for his grocery purchases so that I could earn an extra fuel-points discount. Kroger’s at-register couponing interface immediately noticed the addition of dog food to my basket – it offered me a few other pet coupons at the register, and added some more to the digital coupons in my Kroger app. They also seemed concerned that I had suddenly doubled my grocery volume, and gave me a few coupons for $5 and $10 off my total purchase at the register.
Next, we went vegan. It was my teenaged daughter’s idea, because apparently veganism is almost as cool as cheek piercings. I talked her down to a two-week test, and I assumed we would have to start shopping at the local health food grocery, a block from Kroger’s.
Instead, Kroger responded to my change in eating habits. At the register I got coupons for soy milk and vegan burgers. I usually tend to buy at the edges of the store (produce, meats, cheeses), but the coupons convinced me to try a few vegan CPG items on my next trip. Thankfully we are now done with that particular experiment, although Amy’s vegan frozen meals are now a staple in my daughter’s diet.
Relevance is the best competitive path that grocers can take these days, and if you aren’t then your competitors probably are. Let’s sample the sophisticated uses of customer data at grocers like Kroger, and create three steps you can take to improve relevancy:
1. Use data from customer purchases to understand what individual relevancy is all about—what are your target customers buying, and what does that tell you about their individual interests and tastes? Then follow through with some recommendations for new, related products that might appeal to them, based on past purchases.
2. If discounting is a necessary competitive weapon, use best-customer data to boost trial on targeted products that relate to individual preferences of your most important customers—offer discounts for trying new products in categories of relevance to that high-value individual—and save the money you used to waste on broad discounts on generalized circulars that attracted cherry-picking, disloyal, price-oriented, low-value shoppers.
3. Study the technology and channel preferences of your top customers, and develop apps and communications to meet them where, and “when,” they are. This helps boost relevancy at the right place and time your customers want to connect with you.
If you want to learn more about relevance, click the link to check out our current cover story. Once you develop a taste for the nuances of relevance, you’ll never go back to plain vanilla marketing. Vanilla may be vegan, but I prefer my food – and my grocery store experiences – to have a lot more flavor.
