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Retailers at a Crossroads: Autonomous Efficiency or Enriching Relationships?
Today, the customer relationship is more endangered than ever as the largest retailers deploy robotics and technologies enabling the shopper to visit a store, pick up the groceries they want without interacting with humans.
January 13, 2020
7 Min Read
Photograph: Shutterstock
Sponsored by Birdzi
Many retailers, particularly the many regional supermarket companies across the U.S., started as the proverbial corner store, where the proprietor knew each of his customers. As retailers grew into more stores and larger teams of associates, the relationship with the customer became more problematic; the customer remained important but retailers were challenged to truly know each shopper.
Today, the customer relationship is more endangered than ever as the largest retailers deploy robotics and Amazon Go-like technologies enabling the shopper to visit a store, pick up the groceries they want and be on their way—all without interacting with another human being.
Retailers have an opportunity to pursue an alternative path that reinforces their customer relationship legacies. This approach puts technology in service to people, enabling retailers to use the latest capabilities to provide new services, deliver new value and once again build relationships with each customer across their stores. Technologies like artificial intelligence and machine learning, combined with leading edge understanding of digital user experience, empower retailers to deliver contextually relevant, meaningful savings to each customer.
Digital engagement supports, not replaces, relationships
It’s easy for retailers to focus on the ecommerce imperative when executives are confronted every day about grocery moving online. While online is important, ecommerce represents only one activity of broader digital engagement. Indeed, different studies show that a majority of in-store sales are touched by digital activity. Think of online shopping as one more digital touchpoint, alongside email, the website, mobile app, social media, kiosks and others.
Digital, especially mobile, brings with it an opportunity for the retailer to be contextually relevant to the individual customer inside and outside the store. And, what’s more, shoppers today expect, and are even demanding, that merchants provide personalization in marketing and services.
What’s exciting is that retailers today have an opportunity to use cloud-based capabilities to provide industry-leading relevancy and personalization to each customer cost effectively, all while leapfrogging their larger competitors. Retailers, especially regional retailers, can seize the opportunity as big data, AI and machine learning and the cloud all converge to power a true “customer first” strategy focused on acquiring, growing and retaining customers.
A new approach to customer centricity
The Kroger Co. is perhaps the best known example of a grocery retailer employing a customer centric approach, the centerpiece of which is personalized promotions. While Kroger has had well documented success, a growing number of regional retailers are understanding the power of putting the customer first and looking to pursue similar initiatives.
But here’s the catch: The legacy solution providers that retailers sometimes turn to are in fact expensive consulting engagements. And while the promise is that retailers will be able to access incremental marketing funds from brand vendors, too often those incremental dollars are effectively just transferred via the retailer to the solution provider to pay for all those expensive consultants. This results in little value actually being created for the customer.
Like elsewhere, technology is disrupting this legacy approach, using new tools like AI and machine learning to power true individual customer, segment-of-one, strategic personalization at scale. And because that capability is delivered via intelligent cloud-based software fed by big data, the result is significant ROI for retailers as shoppers grow purchases, shop more often and remain customers over time.
The power of data
Back in the corner store, the proprietor knew each customer through conversation—an ongoing relationship built from regular interaction. Today, big data helps retailers answer the customer’s question, “Do you know me?”, all while facilitating interaction with each shopper. Big data in supermarket retail goes far beyond understanding past purchases; sophisticated customer engagement platforms understand brand loyalty, discount propensities, purchase frequency and far, far more. Leading solutions calculate hundreds of attribute scores for each customer, updated with every purchase.
But building customer relationships requires even more. One area that is coming on fast is personalized health and wellness. By opting into the retailer’s program and self-identifying health conditions, food allergies and preferences, the customer can be guided to specific products across the store beneficial to them individually. This virtual shopping assistant can help customers when shopping both inside and outside the store, including guiding the shopper to the next beneficial product along the aisle.
With 60% of people in the U.S. having one or more chronic health conditions, according to a RAND study, the ability of the supermarket retailer to help their customers improve their well-being represents a powerful way to build loyalty and ongoing relationships.
The power of looking forward, not back
Beyond the legacy customer centric solutions, there are many companies that state they are able to provide personalization to retailers. But all personalization is not the same. Nearly all capability providers use past-purchase data to power up recommendations to the shopper today. And while past behavior is important, there is far more to true customer relevancy. Imagine the customer who has just adopted a dog; instantly, dog food is now relevant but the marketer would not know that from past purchases.
Leading capabilities, though, have a real-time view to customer intent: What items were just searched for, what product was just added to the shopping list, what coupon was just clipped and even the shopper’s real-time location in the store. This view of purchase intent allows marketers (with the right capabilities) to respond in real time, suggesting a dog food promotion to the shopper who just added dog food to their shopping list.
To do this requires deep integration into a retailer’s digital touchpoints and a data architecture that supports understanding and responding in real-time. Many retailers have cobbled together disparate digital capabilities over time as they have been pulled into the digital world. Making the situation worse, these capability ‘silos’ prevent the retailer from providing a cohesive, omnichannel digital experience to shoppers. The good news: Retailers can today migrate onto a comprehensive, end-to-end digital platform, purposely built for regional retailers and supporting promotion creation and management, sophisticated personalization and digital touchpoints all brought together into a powerful ecosystem.
New, comprehensive and personalized technology
Birdzi leverages the latest technology, data architecture and data science with AI and machine learning purposely built for supermarket retailers. In a breakaway from old processes, this combination provides a more end-to-end, comprehensive platform—an ecosystem built specifically for grocery stores.
Drawing inspiration from companies such as Apple, this complete ecosystem provides a much richer, smoother experience. Steve Jobs once famously remarked, “You have to start with the customer experience and work backwards to the technology. What benefits can we give to the customer—not ‘let’s sit down with the engineers and discuss our awesome technology’.”
If a retailer’s goal is to acquire, grow and retain customers, it’s important use a system that collects large amounts of data for study; provides reports measure progress and changes in consumer experience; and supports retailers at every stage of the shopper journey. Retailers who offer loyalty programs—as well as those who don’t—still need a way to increase digital engagement, because that engagement helps drive customer-identified data, and that data provides results.
For instance, shoppers who are digitally engaged through Birdzi’s platform have two times the number of store visits compared to non-digitally engaged shoppers, and the average basket of a Birdzi-engaged shopper is 22% higher than a non-digitally engaged shopper. What’s more, the retailer retains four times the number of first-time customers if they become customers through Birdzi’s platform versus through other methods. All this points to a much higher customer lifetime value from digitally engaged customers.
Birdzi technology works to make the shopping experience “Smart, Personal and Seamless” for shoppers while empowering retailers and brands to easily and intelligently connect with the shopper at the right time and place, with the right message. Ron Bonacci, vice president of marketing and advertising at Weis Markets, said, “Birdzi’s power of one-to-one personalization, scoring every customer’s basket and delivering relevant and timely offers, is key to driving sales and profits for any grocery store. Omnichannel touchpoints and marketing personalization are strategic business models we need, and Birdzi delivers.”
To learn more about how Birdzi can help retailers streamline their transition to personalized tech solutions as well as better target their desired audience and connect with customers on a deeper level, call 1-888-419-8598 or visit www.birdzi.com today.
