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Why Grocery Website Personalization and Loyalty are Key for Regional Grocers

Grocery retailers are discovering that customers want to interact with businesses that reward them for their loyalty and relate to them as individuals by providing personalized interactions. A study by Epsilon and GBH Insights found that 80% of US consumers said they’d be more likely to do business with a company if it offers personalized experiences. And loyalty programs can be such a strong driver that 87% of customers satisfied with a retailer’s paid loyalty program will purchase from that retailer over a competitor with a lower price, according to research from ebbo.

Clearly, grocery website personalization and loyalty are now among the most important success factors for any retailer — and grocery retailers are no exception. For regional grocers, the ability to offer personalization and loyalty rewards provides benefits such as:

  • Fending off competition from mass merchants,
  • Differentiating the brand,
  • Building a consistent customer base.

By providing this aspect of customer convenience — a critical component of a profitable omnichannel strategy — the grocer also deepens their relationship with customers. Let’s take a look at why now is the right time to add grocery personalization and loyalty to your business strategy and how you can get started on, or enhance your existing, personalization and loyalty programs.

What does grocery website personalization and loyalty look like in grocery eCommerce?

Unlike traditional segmentation—which divides customers into groups and tailors the marketing strategy and the promotional offer based on the category—personalization analyzes customer data to target communications to each individual. A personalized offer is one where both the qualification criteria and the reward are tailored to the individual customer.

From the customer’s point of view, it’s the difference between getting an offer aimed at people like me and getting an offer aimed at only me. At its most sophisticated, grocery website personalization delivers to each customer only those offers that are most relevant to them at a specific moment in time.

The Mercatus platform provides a Personalized Promotions and Loyalty integration with Eagle Eye, adding full-fledged personalization capabilities to your marketing mix without the need for intensive internal resources or expertise. Let’s explore some of the features that will drive sales:

1. Expanded promotional offers to boost your loyalty programs

Loyalty programs have come a long way from the days of punch cards and common incentives for everyone. Today’s more sophisticated programs depend on individualized offers and rewards to be successful, rather than taking a one-size-fits-all approach. This customer-centric approach is hyper-customized and adds significantly to a grocer’s convenience offering.

Research from Dunnhumby (Retailer Preference Index) indicates a shift over time in the effectiveness of “mass levers” (e.g. base prices, advertising, mass promotions, and private brand) and personalization levers (e.g loyalty rewards, personalized promotions). Before the pandemic, mass pricing levers had a greater impact, but in a post-pandemic, inflationary era, personalized levers such as loyalty rewards and individualized promotions have three times the impact they did in 2019.

For regional grocers looking to integrate grocery personalization, one of the constraints they may face is the difficulty with implementing new offer types. Marketing teams have hundreds of new offer types and campaigns they want to launch but are constrained by legacy technology. Since the logic of their loyalty programs are often built into the legacy POS, it can be a nightmare to update or change promotional offers.

The Personalized Promotions and Loyalty integration with Eagle Eye integrates directly with the POS meaning marketing teams can create new promotional offers without worrying about the POS logic. You have the ability to engage your customers with a wide variety of offer types such as:

  • category-based offers (e.g., wine discounts),
  • item-level coupon offers (e.g., $1 off a particular item),
  • basket-level offers (e.g., category volume discounts),
  • membership offers (e.g., seniors or employee discounts) and
  • bonus rewards offers (e.g., earn 2x the points).

You can even create your own custom offers designed specifically for your customer base making it a highly flexible solution for your personalization and loyalty strategy.

Create custom offers for your customer base to improve grocery website personalization

2. Real-time cart updates to reduce cart abandonment

It’s much easier for a customer to abandon an online shopping cart compared to one in the real world. Research suggests that the US retail grocery industry could be losing more than a billion dollars each year to abandoned carts. Furthermore, eCommerce UX researchers at the Baymard Institute reveal that most of the reasons why a shopper chooses to abandon their online cart can be resolved. Among the top are the extra or high fees (48%), a complicated checkout process (17%), and being unable to view or calculate total order costs up-front (16%).

Most of these are addressable issues with the UX and UI in the checkout process. The Mercatus integration with Eagle Eye includes a real-time display during the checkout process that shows the customer the promotional offer that’s been applied, and the amount saved. This important feature reassures customers while they shop that their promotional offers are being applied and reminds them of the savings they are accumulating. This encourages successful completion of checkout, which is known to be one of the riskiest places for cart abandonment.

3. Loyalty point tracking and redemption to keep customers coming back

woman tracking her loyalty points

For regional grocers providing an omnichannel customer experience, grocery personalization allows you to enhance that experience at every touchpoint, both digital and in-person. An example of this is displaying a customer’s accumulated loyalty points — a completely unique, personalized data set — online, on the app, and at the store checkout. By doing so, you remind customers how much they are earning and provide multiple opportunities to redeem the points, reinforcing the value of loyalty to your brand.

With the Mercatus integration with Eagle Eye, your customers can see their points balance on the newly redesigned checkout page. This informs them of how many points they’ve accumulated and helps make the redemption process easier—highlighting the value of your loyalty program, and also, potentially preventing cart abandonment.

4. Expanded personalization capabilities to create unique customer experiences

The beauty of personalization is that it creates an ongoing dialogue between you and your customer. You provide personalized offers likely to resonate with that customer, and they react in a certain way. This provides data that teaches you even more about that customer, such as which offers and recommendations they’ll respond to and which ones they won’t. This in turn helps boost future response rates and continue collecting helpful, relevant data.

These techniques can also be profitable. A retail study from Boston Consulting Group found that reallocating 25% of the mass promotions budget to personalized offers could increase return on investment (ROI) by 200%.

The Mercatus Integration with Eagle Eye is designed to give you full personalization functionality and loyalty capabilities that help protect your regional business against competition from mass merchants and national chains. We also provide the expertise that can help you get your personalization off the ground. For example, our guidance through the early phase tasks will help you:

  • start with a small sample of customers,
  • collect the most important data first before attempting to capture a 360 customer view,
  • ensure your data is reliable and clean,
  • develop a playbook of triggers, such as shopping cart abandonment.
grocery personalization ice cream offer for a father with his child

For your initial attempts at grocery personalization, we suggest you focus on your most loyal customers. This will simplify the process and allow you to accumulate learnings. Focusing on your best customers is also more likely to yield good results: according to McKinsey, targeting regular customers can result in an ROI three times higher than mass promotions.

How to get started with a grocery website personalization strategy

There are many challenges to realizing a true personalization strategy. These include hygienically managing large amounts of data collected across different platforms, analyzing the data at a granular level, and having the right tools and technologies in place to execute a large-scale program. An enormous amount of offers need to be generated and deployed on a regular basis, though artificial intelligence (AI) can be used to help ease this complexity by generating the specific offers for the various trigger points.

Developing and implementing grocery website personalization and loyalty programs also requires extensive in-house expertise and resources. This degree of specificity requires the accumulation of many different data points, which can come from any number of sources, for example:

  • Demographic information from the customer’s profile,
  • Loyalty program information,
  • Instore, online and mobile app transactions,
  • Page hits, site and app activity,
  • The customer’s preferred brands or grocery items,
  • Shopping patterns such as frequency and preferred day of the week and time of day to shop,
  • The customer’s real-time location,
  • General external data such as holidays, events and weather.

This data can then be analyzed to create a planned program of interactions that can take many forms. Grocery website personalization and loyalty tools can include:

  • Coupons and promotions,
  • Quantity or spending-level discounts,
  • Items likely to intrigue the customer and drive trial,
  • Shoppable recipes based on the customer’s nutritional needs,
  • Favorites aisles with each household’s most-purchased items,
  • Customer retention activities such as reaching out to lapsed customers or rewarding long-term customers.

These personalized interactions can be used to guide desired customer actions or incentivise certain behaviors.

Realize the benefits of a personalization and loyalty program

For regional grocers, a personalization and loyalty program is fast becoming an essential part of their business strategy, a way to protect market share from competitors, build baskets and improve customer lifetime value. By working with a trusted partner, they can capitalize on the many benefits of a program while overcoming the potential challenges.

Mercatus/Brick Meets Click research indicates that 25-30% of regional grocer customers also cross-shop at retailers like Walmart and Amazon. Grocery website personalization and loyalty provides an important opportunity for regional retailers to halt and even reverse the decline in market share they have lost to supercenter, club format, big box and digital-only retailers over recent decades.

A personalized, convenient customer experience will combat these effects and positively impact customer retention and loyalty. In addition to satisfying customer appetite, McKinsey points out that highly personalized customer experiences are difficult for competitors to imitate.

The Mercatus Personalized Promotions and Loyalty integration with Eagle Eye offers an easy way to harness the power of a sophisticated personalization program without extensive in-house expertise or resources. To find out how this integration on the Mercatus platform could help your business, book a demo today.

Headshot of Peter Nakamura

Peter is responsible for product marketing at Mercatus and educates grocery retailers about the latest platform innovations.