The power of personalisation in grocery retail

Over the last four years consumer behaviour has undergone a profound transformation, none more apparent than in the realm of grocery shopping. While some have returned to the aisles of brick-and-mortar stores, a significant portion continue to embrace the convenience of digital shopping for their weekly essentials. The shift towards online grocery shopping, accelerated by the pandemic, has reshaped the industry’s dynamics, compelling grocery and CPG providers to reevaluate their strategies to meet evolving consumer expectations.

The urgency for transformation

According to analysts, the penetration of grocery eCommerce is poised to double – from 11% to 23% – in the next five years, underscoring the urgency for brands to bolster their digital offerings. Central to this transformation is the imperative for personalisation, as consumers increasingly demand tailored experiences in their shopping journey. In a landscape where 76.5% of grocery customers expect personalised interactions, failure to meet these expectations risks erosion of loyalty and market share.

In our latest report, ‘The State of Personalisation Maturity in Grocery/CPG 2024’, it’s evident that while the importance of personalisation is widely acknowledged, there exists a notable gap between recognition and effective implementation strategies. The report reveals a stark reality where, despite 80% of companies prioritising personalisation, significant portions struggle to allocate the necessary resources and drive tangible testing and efforts. 

Key findings from the report highlight this disparity:

• Two thirds of companies plan to invest further in this field, however previous approaches need to evolve in order to drive tangible testing and personalisation efforts. 
• Lack of dedicated business operators hampers strategic cross-departmental deployment, impeding the scaling of personalisation teams across business units. However, 88% of surveyed businesses have built cross functional teams, so now is the time to scale these up!
• Although 86% use different data sources to fuel personalisation strategy, 52% have identified sources but have yet to fully action them.
• 59% of respondents said they set campaign specific KPIs without informing the long term strategy.
• Despite recognising the importance of audience strategies, alignment with broader business strategies remains a challenge for many, with 21% failing to align personalisation strategies with the overall business strategy.

How personalisation can help

Early adoption of personalisation technology involves teams segmenting large groups of users with similar traits to provide a more tailored experience for each – with the goal of covering most of their traffic for greater relevance overall and iterating based on incoming data.

Machine learning can then be layered on to automatically optimise which content, offer, or messaging to show, ensuring the best-performing variation per experience over time. With one-on-one level experiences available through affinity-based personalisation, which algorithmically matches recommendations, offers, and content according to an individual’s past purchases, preferences (dietary, price, brands, etc.), or in-the-moment activity. And all of this can be done while still prioritising important site-wide events, seasonal promotional products, or preferred localised stock. An example: making the homepage work harder with personalisation The homepage acts as a virtual grocery storefront, which can also be quite overwhelming to navigate for shoppers. 

It doesn’t help that there is a massive disparity between the new and returning customer experience. This can easily be solved with greater personalisation on the homepage. From incorporating social proof – like what others are buying; seasonal deals – to help customers make the most of calendar moments; and targeted promotions – from previous shopping sessions; there are many simple and effective ways to create meaningful connections with consumers, driving engagement and loyalty.

For new users, teams can show “quick start” product recommendations, showcasing the most popular products in the store’s top categories, such as a pack of tomatoes for fruits and vegetables, a pack of butter for dairy, or a loaf of bread for bakery. It’s also possible to leverage location data and weather conditions, allowing for the dynamic delivery of content or promotions showcasing barbecue items and ice-creams during heat waves or turkeys and cranberry sauce during the Christmas period.

Personalisation’s impact across touchpoints

From the moment a customer lands on the homepage to the final click of the checkout button, personalisation is able to permeate and maximise every aspect of the shopping experience. By streamlining product discovery, grocery retailers can create seamless and intuitive journeys that delight customers at every step.

Leveraging data: Start with using the data available. Most online grocery stores use wish lists or smart baskets to help customers repeat regular orders. The next step would be to integrate recommendation widgets at critical points throughout the customer journey and suggest products, both previously purchased and new to the customer. The search bar is a great place for this, as its results can be auto-populated to suggest frequently purchased products and those similar to recent purchases, even before the shopper clicks search.

The art of subtle reminders: Reminding shoppers of that regular product they’ve forgotten to add to their basket might ease frustration when they come to unpacking their delivery. Also, by offering relevant add-ons at checkout, it will make food preparation and overall experience a lot smoother and enjoyable for customers. Imagine a customer adds baking ingredients to the cart – other baking ingredients included in similar carts can be recommended.

Beyond the checkout: Personalisation in the grocery sector extends beyond the online store, to post-purchase engagement, with targeted email campaigns. When done right, digital grocers can inspire future orders in between shopping visits with tailored promotions, content, and recommendation experiences based on customers’ purchase history and affinities – with email content modules dynamically adapting without the need for manual segmentation or multiple email sends.

Creating a tailored shopping environment: Brands can also offer a “just for you” personal shopping page that includes recently purchased items and brands, and product recommendations based on the customer’s displayed shopping behaviour and dietary preferences. In essence, grocery retailers can use this to welcome returning customers and reward loyalty with hyper-personalisation.

The one-size-fits-all approach no longer works

By reimagining the grocery journey through the lens of personalisation, retailers can forge deeper connections with consumers, driving growth through higher basket sizes, increased order frequency, and enhanced customer lifetime value, as well as differentiation in an increasingly competitive landscape.

The era of one-size-fits-all grocery shopping is behind us. In its place emerges a new paradigm, where personalisation shapes every aspect of the consumer experience, from product discovery to checkout and beyond. Retailers that implement this will elevate their grocery game, delivering experiences that are not only convenient but truly transformative for consumers across the UK and beyond.