In today’s battle for share of wallet, relationships count even more.

Losing market share to e-commerce on the one hand, and deep discounters on the other, grocers should be using their most powerful weapon to counter attack – data.

The good news is that mass retailers, almost without exception, have realized how important data can be in helping them to win and maintain market share. On the other hand, many of them don’t really have a plan in place as to how to use that data to develop more lasting, ongoing relationships with their most valuable customers.

Most chains running card based or digital loyalty programs have been using their data for years to provide targeted offers to program members, mostly for items they already buy. And yes, this does build loyalty to some extent – customers appreciate that the chain is listening to them and helps them save money week after week.

But there are some innovative chains who have made larges strides forward in using their data to develop relationships in more creative ways.

Outside of grocery, Sephora has always been a standout innovator in data driven marketing. With more than 17 million members that make up in excess of 80% of the chains sales, the “Beauty Insider” program continuously adapts and improves in order to stay relevant. In addition to tiers that incentivize customers to continuously strive for the next level of status, the program offers non-discount related rewards including the ability to use points for in-store beauty tutorials (driving them back to the store), and exclusive access to limited edition products.

In the grocery space, Hannaford has been cited for a novel approach in their recently launched “My Hannaford Rewards” program. Based on a cash back system designed to preserve the chains EDLP strategy and offering higher level rewards on store-brand items, the digital program enables shoppers to select the offers that are relevant to them via an app or online, based on a pre-personalized list. AI enabled technology has been deployed to continuously learn about how shoppers are engaging with the program and updates the most relevant offers presented to each and every individual customer on an ongoing basis. The cash back awards are automatically applied to the customer’s bill on a quarterly basis at the point of sale. The simplicity of the program combined with the perceived customer value of the savings is helping the chain compete successfully for share of wallet in the highly competitive New England and upstate New York markets.

Across the pond, Tesco has launched a new feature to its loyalty program, helping customers to eat more healthy foods. Based on research that customers believe supermarkets have a responsibility to help them make healthier purchasing decisions, Tesco has used its Clubcard data to create a “health score” for each basket, enabling it to spot trends in what customers are shopping for. Leading on from that, sophisticated data analysis will enable the chain to make personalized, health-based recommendations per shopper or family.

Competitors Sainsbury’s have taken the use of personalized location data to the next level. In a recent campaign, the chain was able to identify customers who were shopping at a competitor over the weekend and sent them attractive “win-back” offers later in the week to influence their decision for the coming weekend.

As the fight for share of wallet intensifies in 2019, we expect to see more and more examples like those listed above. Retailers who continue to innovate with their data will thrive at the expense of those who don’t.

 


 

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