A good grocery shopping experience doesn’t have to be an anonymous, one-size-fits-all endeavor. These days, we’re told, it’s all about personalization.
But what exactly does personalization entail? Personalized product recommendations? Personalized service? Or personalized savings? Some grocery stores excel at some of these things – but what many shoppers today really seem to want are the savings. And a new survey finds that one grocery chain is doing that better than just about anyone else.
The retail analytics company dunnhumby has released a special edition of its Retailer Preference Index, which typically ranks the country’s favorite and best-performing grocery stores. This edition zeroes in on personalization, and finds that the country’s largest traditional grocery chain is best, according to its customers, at providing personalized savings.
dunnhumby’s rating system, which combines shopper survey data and the strength of a company’s financial performance, found that Kroger-owned Smith’s is tops in offering the best targeted savings. After Winn-Dixie, Kroger itself is number three, followed by another Kroger-owned chain, Fry’s. When you add Fred Meyer and King Soopers, Kroger-owned stores occupy five of the top ten positions on the list.
With nearly half of shoppers taking it into account, “targeted savings is the most important driver of personalization,” dunnhumby notes, surpassing the importance of frictionless experiences and localized assortments. And shoppers seem pleased with the way Kroger is doing it.
“Kroger always refreshes their discounts/coupons/sales every week,” one shopper told dunnhumby, saying that “most of the time” the discounts featured in the store’s app are “relevant to me and our household.” Another said they were “so impressed with Kroger because they send us a packet of coupons each month that are specific to those products that we have actually purchased in the prior few months.” And a Fry’s shopper said the Kroger-owned chain “does the best job of personalizing to me. They do this via tracking my purchases and then sending me coupons in the mail or digital coupons that match to my preferred products that I buy frequently.”
So how, then, did the overall winner in the grocery personalization report end up being Amazon, which sells far fewer groceries than these actual grocery chains? “Amazon stands apart from all other retailers,” the report found, in naming it number one in personalization. But it does so almost exclusively by providing far and away the best frictionless experience, which involves highlighting relevant products, reminding shoppers of favorite items to buy, and providing an easy shopping experience. “Amazon is so dominant in frictionless experience,” dunnhumby found, that its standing in that category “overcomes their below-average positioning in the other two drivers.”
H-E-B was ranked best at personalizing products based on geography, by providing a localized assortment in stores and online. But Smith’s and the other Kroger-owned stores on the list blew away Amazon in targeted savings, partly because of their promotional prices – and partly because of their everyday prices.
Some stores have great promotions, but sky-high regular prices. So unless you’re only buying promoted products, you may be paying too much overall. dunnhumby found that good base prices are half the reason that shoppers name a particular store as an affordable and desirable place to shop. Personalized promotions, then, are the icing on the cake. And at a store with higher regular prices, who wants cheap icing if you can’t afford the cake?
Whether they do it by offering personalized promotions, everyday low prices or a combination of both, “saving money and rewarding shoppers matters most to driving better long-term results for retailers,” the report concludes. “With the long-term trend of shoppers across all income brackets demanding lower prices,” dunnhumby of the Americas President Matt O’Grady said in a statement, “personalization is an opportunity for grocers to better retain and acquire customers.”
Low prices are ideal, and frequent promotions are even better. But personalized deals on what you actually buy the most, could make the difference between a store that earns your loyalty – and a store that you pass by to go shopping somewhere else.
Image source: Kroger
