Harnessing Data for Personalized Grocery Shopping Experience

As consumer demand trends more toward a personalized experience, the Consumer Product Goods (CPG) and grocery industries are harnessing the power of data-driven insight. One study found that 88% of consumers feel the experience provided by a company is as important as its product and 71% expect personalized interactions. Data is key to customizing the shopper experience and improving internal reporting and operational decision-making.

Industry-specific concepts like ‘start your cart’ with automated suggestions, providing product recommendations, and offering digital coupons to enhance the customer journey are critical to gaining and keeping customers. This article will highlight key components of a data-centric organization and considerations for future roadmap design.

Benefits of a Personalized Experience

A personalized customer experience can drive shopping satisfaction and provide an opportunity to build loyalty. CPG and grocery organizations realize a host of benefits from a data-centric delivery model, including pricing and promotional opportunities, product recommendations, and automated substitutions.

Pricing and Promotional Opportunities – Between CPG companies and grocers, pricing and promotions have become more complex in a digital-driven environment. No longer are end-cap promotional items the only way a grocer has to think about promoting items, but now both the brick-and-mortar and digital channels need to be involved in driving promotions. Pricing and promotions become more automated as they are primarily data-driven decisions powered by AI/ML tools.  

Product Recommendations to Drive Sales – Utilizing data-driven decisions to increase sales and basket sizes is where grocers are focused today. One emerging e-grocery store bases its recommendations on grocery shoppers buying of the same items each week. Creating a data-centric delivery model with ‘start your cart’ recommendations, new product suggestions, basket add-ons, and even recipe-suggested additional items can generate an increase in sales for both the CPGs and Grocers.

Automated Substitutions for Improved Customer Satisfaction – Substitutions and out-of-stock items are a pain point for many consumers. Grocers will need to improve their digital inventory management systems and provide product substitutions automatically when needed. Data and AI models can be the vehicle for offering these recommendations. In partnership with CPG companies, grocery offerings can become more robust by providing substitution recommendations to the picker associates to ensure those items are added to the shopping basket. 

Consumer Product Goods Role in the Customer Experience

How do CPG companies fit into the overall data strategy of a grocery retailer? The most innovative will help provide the data needed to achieve increased revenue through the modern data platform. Most retailers have already prioritized updating product descriptions, SEO strategies, and data dimensions, but have yet to define how can they continue to innovate through data.

Partnering to change the digital grocery experience and brand awareness will separate the best retailers from the pack. According to Forbes, 75% of users never scroll past the first page of search results. Implementing targeted promotional and marketing strategies aimed at building customer loyalty is critical for CPGs to effectively harness customer data. Additionally, CPGs may differentiate themselves by cultivating and promoting impactful customer experiences through their products, branding, and social media. These personalized campaigns would be offered to the consumer to build brand awareness and suggest shopping cart additions.

Further, CPGs may partner with the retailer to offer new product samples in digital orders and introduce new items to the buyer. One recent survey found that 60% of CPGs have pivoted their promotional spend to digital channels. Driving product awareness and promotional campaigns digitally for customers will further cultivate customer loyalty and enhance the overall experience.

Summary

Food and beverage brands that cultivate experiences for their consumers will differentiate themselves in this evolving digital age. CPG suppliers and grocery retailers who partner to identify unique or personalized experiences will set the tone for the future. Online grocers may one day offer ‘back to school’ specials with ideas for what to pack for student lunches at the beginning of the school year, or date night boxes with cooking ideas targeted toward couples. Generating unique, meaningful customer experiences driven by modern data platforms, and integrating those opportunities throughout the CPG and grocery ecosystems, will define the future of the industry.