The traditional supermarkets nowadays are under immense pressure, online retailers are popping up, people becoming lazier and do not want to spend 30 minutes in a supermarket. Moreover, the switching costs are low. This makes it more important for supermarkets to bind people to their brand and that exactly is the challenge supermarkets are facing.
Binding people and turning them into retaining loyal customers is vital for supermarkets. Personalized experiences could potentially help in turning customers into loyal customers and even attracting more customers. The point based programs of today are not working anymore. Customers are screaming for a more personalized experience.
What are personalized experiences?
Now that we know the challenge current supermarkets are facing the question may rise what are personalized experiences and how can they help to let customers become more loyal to the traditional supermarket? The reason why a lot of people are switching to online retailers is because of their personalized approach. Online retailers know how to personalize the shopping experience. Amazon for example uses a vast amount of data it collects on each shopper to select a few key products to suggest to other shoppers drawn from the estimated 600 million products sold. By suggesting products to customers Amazon create a win-win situation, customers spend less time searching for their needs and next to that Amazon generates more money because customers tend to convert better with personalized offers.
How personalized experiences will help supermarkets
If an online supermarket can personalize the shopping experience, then a brick and mortar supermarket can do this as well. Supermarkets collect tons of data, just think of the checkout data, current loyalty programs and data about how customers move within a store. This data makes it possible to offer personalized experiences. Predictive analytics in cooperation with Artificial intelligence can be used to create forward looking and personalized programs. This data can ensure that retailers understand their customers better. This allows them to select the right offer at the right place at the right time, just like the online supermarkets do. Moreover, switching costs will increase because the supermarket collects data for every transaction that another supermarket does not have, allowing them to personalize the experience even more and thus binding customers to their brand.
Sources:
https://www.foodnavigator.com/Article/2018/12/21/2019-and-beyond-Six-trends-shaping-the-supermarket-of-the-future#
https://www.grocerydive.com/news/how-can-ai-and-data-help-retailers-personalize-the-grocery-experience/540901/
