What is Grocery Ecommerce Personalization

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November 17, 2023

Ecommerce personalization is the act of using customer data, behavior, and insights to more effectively cater to that specific user. These data elements range from demographic factors like the user’s age, gender, and location, while also covering psychographic elements like a customer’s habits or personality.

Businesses can make better recommendations by understanding what a customer is looking for and using data to determine which products they favor. For example, the e-grocery industry can use personalization to recommend specific products, offer product replacements, and trace behavior to offer cross-sell opportunities.

Beyond just selling products, ecommerce personalization also expands into marketing. Pinpointing how distinct customer segments want companies to communicate with them, across tone, communication style, and media channels, can make a huge difference to consumers and businesses alike.

While some businesses may hesitate to personalize as they fear they may overstep on personal privacy, the consumer has an opposing mentality. Around 80% of consumers are likely to shop with brands that understand who they are. This understanding could be as simple as using a customer’s name or as detailed as suggesting products based on a user’s search history.

Grocery brands are able to use marketing personalization to create special discount campaigns, loyalty offerings, or promotional content that resonates with the user. Over time, continually using effective e-grocery personalization strategies can help to increase average basket costs, diversify sales to new products, and drive loyalty to a supermarket brand.

What types of ecommerce personalization are there in e-grocery stores?

Due to the extensive quantity of products that supermarkets and e-grocery brands offer, there are a much greater number of customer touchpoints. Each of these customer touchpoints, whether it be interacting with a specific product, adding something to their basket, or combining specific items, generates data. Using this data, supermarkets can offer a heightened degree of ecommerce personalization that leads to more significant benefits for the e-grocery brand and the customer.

There are three core types of ecommerce personalization that supermarket brands can use.

Manual personalization by the customer

Within e-grocery platforms, the user has several options for manual personalization, which will place filters or modifications on the store’s inventory to better service them. Manual personalization is accessible to the customer yet still provides additional information to the grocery brand. For example, a customer could flag certain products with a heart icon to indicate them as their favorite, or add saved products to a shopping list for weekly items they buy.

Manual personalization also extends to customer-facing inputs, like entering and saving multiple addresses and adding loyalty card numbers. The first major benefit of this form of personalization is that it helps to streamline the customer experience, boosting satisfaction and saving time when conducting grocery shopping.

However, grocery brands are also able to use this information to then conduct an advanced degree of ecommerce personalization. Feeding captured information into ML algorithms will create a personalized network of specialized recommendations that are more likely to connect with the customer.

Manual personalization creates a positive feedback loop, with customers interacting with products which will then lead supermarkets to offer them an advanced degree of recommendation, helping to find new products they love – and so onward.

Manual personalization by the partner

Manual personalization is also available to the selling partner, with the supermarket also having a great deal of control over the sales process. The loyalty module of Wave Grocery allows partners to group different users into segments, using their purchasing habits and demographics to then offer a better degree of marketing personalization to them.

By approaching these user segments in different ways and offering unique discounts, benefits and rewards, or personalized notifications, supermarket brands can increase engagement rates and boost customer satisfaction. Especially considering consumers are now increasingly expecting a personalized experience when they shop online, manual personalization can yield extraordinary positive results.

Source - Graph to show the share of consumers who said a brand would lose their loyalty if it delivered a non-personalized experience in 2021 and 2022.

Automated personalization

The third type of ecommerce personalization in grocery stores is completely automated. Grocery brands that implement automated personalization rules are able to create workflows that trigger whenever a customer executes certain interactions on the grocery website or app. An example of this is offering a product that is commonly bought in a pair when one of the two products is added to a user’s basket.

Creating automatic associations between products with a high potential of being bought together can serve as a reminder to customers, helping to increase the average basket cost. Grocery businesses can also incorporate this form of personalization into the search bar, with “For You” product results being suggested depending on the user’s favored products and past purchases.

Equally, grocery brands can add an automatically generated personalized window right before checkout. On this screen, a supermarket can recommend last-minute products that the user may have forgotten or has commonly bought, relying on impulsive behaviors to inspire the customer to add more to their basket just before checking out.

This effective automatic approach is integral to success in the world of ecommerce personalization and is especially powerful in the digital grocery world.

How does ecommerce personalization work?

As technology has continued to develop, ecommerce personalization has continuously iterated into a sleek, streamlined, and effective system. While not every business goes about personalization in the same way, the rising availability of ecommerce suites and tools is making this business tactic more accessible than ever before.

Typically, there are three elements to ecommerce personalization:

  1. Data Capturing: Businesses capture consumer insights based on interactions with their website or mobile applications, pulling details from customer information banks, asking customers for additional information, and meticulously tracking every engagement with customers.
  2. Data Storage and Formatting: Businesses store raw data in data warehouses, often cloud data warehouses. These systems help to defeat data silos and ensure accessibility to data across an entire company. Unstructured data is typically transformed at this stage to enable data analysis tools to work with it more effectively.
  3. Data Analysis and Insight - By analyzing available data, businesses can turn structured data into a system of specific insights on consumer behavior. Companies can use these actionable insights to improve their brand and increase personalization.

A recent trend in ecommerce personalization is the incorporation of AI tools into the industry. Artificial intelligence and machine learning are further streamlining personalization, allowing businesses to create more comprehensive consumer insights in less time. A phenomenal example of this is how Wave Grocery is using AI in supermarkets.

Wave Grocery uses AI systems to collect huge quantities of customer data, spanning across interactions, purchase data, and customer history. Advanced machine learning algorithms can rapidly process these streams of data into a concrete customer analysis, providing more precise recommendations and alternative products.

By incorporating larger data sets and pooling them through AI, Wave Grocery has allowed its partners to cultivate an advanced system of product recommendations, boosting customer interaction and increasing the likelihood of selecting the recommended item. For supermarkets and e-grocery brands, the integration of AI can streamline sales and optimize their workflows to a huge extent.

What are the benefits of ecommerce personalization for businesses?

As we’ve discussed, customers can reap the benefits of personalization without always knowing a business is accommodating them. When ecommerce grocery businesses suggest specific products to customers statistically likely to enjoy that product, the customer gets a tailored product they’ll love while the supermarket improves their bottom line sales.

However, going beyond the advantages for customers, there are a number of ecommerce personalization benefits for partners that use ecommerce personalization.

  • Increased Lifetime Value - Customers who receive customized product recommendations are more likely to react positively to that product. When offering these products throughout the customer journey, businesses can expect customers to add more products to their cart. For a grocery brand, this will boost the average lifetime value of your customers, generating more revenue for your business.
  • Boosted Customer Loyalty - Customer loyalty is hard to win but very easy to lose. One way of offering your customers a better customer experience with your brand is by personalizing their experiences. Recent McKinsey data demonstrates that 76% of customers that don’t receive a personalized experience become frustrated. Offering personalized messages and product recommendations will increase customer satisfaction, helping to convert users into return customers. Customers that have positive experiences with an e-grocery brand will be more likely to continue being an active customer that regularly does their shopping with your business.
  • More Precise Marketing Materials - Over 60% of marketing teams believe that personalized marketing materials boost conversion rates and increase engagement. Businesses can directly cater to their audience and create winning marketing materials by using ecommerce personalization. By capturing the attention of shoppers with personalized marketing, you’ll be able to beat out your competitors and secure larger portions of the general shopper market.

The above benefits of ecommerce personalization all culminate in one powerful advantage: increased revenue. For e-ommerce businesses that have small margins, the difference between personalized and generic content could truly be the difference between net positive and net negative bottom lines. With increased customer satisfaction, boosted loyalty, and higher lifetime values, ecommerce personalization is a powerful tool for modern grocery businesses.

Final thoughts

Integrating ecommerce personalization strategies into a business is one of the most effective approaches a supermarket can take in our modern age. With the widespread availability of data, the efficiency of data warehouse and analysis tools, and the precision of data-driven decision-making tools, e-grocery personalization is now more effective than ever before.

Considering the larger base pool of data that comes from interaction with e-grocery applications and websites, personalization can become a leading strategy that innovates customer relationships and drives sales in supermarkets. At Wave Grocery, we use AI and Machine Learning tools to create comprehensive personalization strategies for our partners that go far beyond the industry standard. If you’re a supermarket that’s looking to expand into the digital realm and work with the market leader in e-grocery personalization, then reach out to our team today.

November 17, 2023
Last updated
July 8, 2024
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