Personalization: 'Show Me You Know Me'

Shopper marketing practitioners say that getting personal with shoppers can increase sales, improve ROI, boost brand relevance and build loyalty, all while reducing waste in marketing expenses. If that isn’t reason enough to implement a personalization strategy, how about the fact that shoppers expect it? “It really comes down to survival and growth,” says Mike Minasi, president, consumer marketing group, Safeway Inc. “People want more specific solutions. This is all about satisfying customers.”According to Inmar’s John Ross, president of Inmar Analytics, “Shoppers don’t differentiate between direct mail, online and in-store. Whether online or in a traditional store, they want an improved shopping process.”“When you visit a website, it knows who you are and what you like,” says Catalina’s John Caron, vice president, marketing. “Why don’t we expect the same level of service in a store? We should, and we will.”For Safeway, personalization is just another way to say “relevance” and “custom content,” Minasi says. “It’s content and solutions based on specific shopper needs in a way that is relevant and simple.”Or “smart,” as Ross refers to it, meaning shoppers want to know products better; demand value in how they spend their money; know where to find, earn and access discounts; and desire to do all of this with speed and in such a way that it seems the brand or retailer knows them. “If I go into my local grocery store and I buy dog food when I have never done so before,” Ross says, “how long before that store starts talking to me about being a dog owner? Amazon would do it right away.”Time and again, sources cite Amazon.com as being as good as it gets right now when it comes to personalization. But other retailers and brands aren’t sitting idly by.Kroger, Safeway and BeyondThe Kroger Co.’s loyal custom mailer program, executed by Cincinnati-based dunnhumby, has been around since 2005. Each communication is 98% unique to that individual shopper, says Matt Nitzberg, executive vice president, communications and media, dunnhumbyUSA. Sent to roughly 10 million shoppers, the mailer’s response rate is about 70%. “Each shopper receives 12 branded offers as well as ‘thank you’ offers, which may include category-specific and store-wide savings,” Nitzberg explains. “The specific combination of offers for each shopper (brands, categories, and values) is driven by the specific shopping behaviors and prior responses by each shopper.” He says that, according to Kroger, the program has generated $10 billion in incremental sales over time.Safeway has offered online grocery ordering for a decade and offers the ability for users to shop by history (from both online and in-store purchases). So it whittles down a potentially overwhelming amount of SKUs to just those items the shopper has purchased in the past, making for a speedier and more convenient shopping experience. “If it takes as long as the in-store experience,” Minasi says, “there really isn’t any point to it.”Just for U, a newer digital marketing platform from the retailer, has been in the marketplace for more than a year in various stages of rollout. Shoppers sign up online or through Safeway’s mobile app, and the program links to their Safeway Club Card. Users receive deals on items they most frequently buy plus those items they may be interested in, access digital coupons, view filtered Club Card specials, and create personalized shopping lists.Kimberly-Clark’s Huggies brand has been experimenting with personalized coupons based on sharing behavior and says it has seen strong initial results. “We tested in Q4 last year. We had escalating coupon offers if mom shared it socially with her friends,” says Anne Jones, vice president, shopper marketing & business development. “She could in a sense ‘personalize’ it based on her social behavior.”Ahold USA’s Scan It! – available as a mobile app as well as with in-store handheld scanners at more than 280 Stop & Shop and 86 Giant Landover locations – recommends offers to shoppers while in-store based on their current shopping trip plus past preferences. It also allows them to scan their groceries as they go to expedite checkout. Additionally, “Small Victories” seasonal mailers provide personalized recipe content and offers based on past purchases, while the retailer’s weekly email highlights specials also based upon past purchase history.Internet grocer Peapod, a subsidiary of Ahold, offers a “Guess my order” tool that takes into account the user’s last six shopping trips and highlights the items purchased most often to help build the current online order. “It is increasingly important for retailers to show customers that they know them by making their shopping experience easier to navigate and more relevant to their lives,” says Rebecca Kane, vice president, brand and customer specific marketing, Ahold USA.How It Is PossibleLoyalty card data is certainly one driver of personalization, but retailers and manufacturers also turn to site analytics, search data, e-commerce, online survey results, email data, geo-location data, social media and mobile data as the tools that allow them to personalize shopper marketing.“Past purchase history is one of the core elements in creating a personalized experience as it’s one of the greatest predictors of intent,” says Catalina’s Caron. “But when you add other factors like location (in or out of store), channel (mobile, online, in-store) or time of day, you can really drive engagement because the experience is incredibly relevant to each consumer.”While the vast amounts of data available can certainly support personalization, those interviewed say it’s not driving the trend. “It’s more about the growth of digital touchpoints and the ability to connect the dots across these touchpoints,” says Kimberly-Clark’s Jones.According to Ahold’s Kane, mobile has created the greatest demand for personalization and is also the biggest enabling tool.Nitzberg says dunnhumby has pinpointed six essential elements for achieving true personalization:A company culture that emphasizes earning and growing the lifetime of value shoppers.A mindset in each employee that puts the shopper – not the brand or store – at the center.Insights that leverage actual purchase data, marketing response data and contextual data.Content (recipes, offers, etc.) that reflects what each shopper cares about.Multi-channel media usage that reaches and engages targeted shoppers with contact frequency that optimizes impact and shopper experience.Relentless measurement of incremental sales, advocacy and customer experience to drive continual improvement.More to ComeWhile personalization is already working to an extent, the potential is greater than the current reality. And shopper expectations for personalized marketing will only increase. “Particularly among Generation Y and Z,” says Jones. “They live a click away from being gone and on to the next [thing], so they must be offered what they expect and provided tools to ‘navigate’ the unexpected but desirable, online or off. They expect to be heard, understood and rewarded for their actions and their loyalty.”Inmar’s Ross says personalization is stuck around the 2.0 mark – a shopper identifies herself, and the brand or retailer looks at what she buys and rewards her based on what she has a high interest in. “2.0 is matching,” he says, “3.0 is where it becomes a two-way dialogue. 2.0 is ‘I push you a coupon.’ 3.0 is ‘I saw you were buying gluten-free items, so here are some recipes that are gluten free.’ That’s a very different kind of dialogue. A discount works, but that content is the Holy Grail.”New York-based OgilvyAction’s Ken Madden, executive vice president, head of digital, North America, likens the current landscape to the “Wild West” but notes that those who are taking personalization seriously are holding true to the fail-fast tenets: “fail fast, fix it and try again.” He also cautions marketers to remember the fine line between helpful and creepy: “We are technically capable of personalizing in ways that can turn the shopper off. As long as we are open about what we collect, vigilant in keeping that data private, respectful of the consumers’ right to opt in and out, and servicing a need while providing value, personalization can be a bonding tool. It can absolutely help build a deeper relationship between the brand or retailer and the shopper.”

Personalization: 'Show Me You Know Me'

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