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All consumers want convenience, value and the right selection when grocery shopping. That includes Millennials, but they also want personalization more than most demographic groups. They want that one-to-one relationship that makes them feel special.
Grocers who forge such a relationship will succeed while others will struggle because Millennials will be the key shopper segment in the future.
How does a grocery retailer create such a connection? The traditional method has been a card-based loyalty program. Critics scoff. They say most shoppers have three or four cards. There is no loyalty to any one grocery store. Albertsons, Jewel-Osco, Pathmark and others recently discontinued their loyalty programs. Blah, blah, blah.
Card-based frequent shopping programs have a long history of lapsing into two-tiered pricing for customers, and that’s it. But those retail companies that have invested time and money into analyzing the data from their loyalty program earned a deeper understanding of their shoppers. They used that understanding to develop offers that are personalized and relevant. Simply put, the dog owner does not get a coupon for cat food.
Perhaps the best example of a grocer using personalization effectively is Kroger, which mines the data gathered from its loyalty program and mails relevant promotions to its shoppers. Meanwhile, the insights gathered help to develop the right assortment for customers. Over time, this contributes to increased store visits and basket size.
Digital coupons are another way to deliver personalization. Research by dunnhumby shows personalized digital coupons redeeming at 12 times that of untargeted paper coupons. Inmar’s 2015 Shopper Behavior Study found that nearly four of 10 Millennials (37 percent) reported that they “usually” or “always” use coupons loaded to their store loyalty card compared with three of 10 (29 percent) older shoppers. Print coupons don’t appeal to Millennials because they generally don’t buy newspapers and get the FSI inserts included. They get their news online.
Clipping and redeeming digital coupons from a smartphone app are perfect for Millennials, who don’t leave home without their device. Digital coupons based on each customer’s shopping habits are key. Shoppers with a grocer’s app on their smartphone can receive personalized coupons directly via a push notification from that grocer.
In the Minneapolis and St. Paul, Minn., marketplace, Lunds Food Holdings, operator of 13 Lunds and 13 Byerly’s upscale grocery stores, has enhanced its mobile app with several personalization features. Shoppers who have opted to get push notifications will receive messaging tailored to their preferred interests and prior in-app actions.
Ideally, those push notifications will draw Millennials into the grocery store. If that retailer has deployed in-store beacons, another opportunity for personalization will take place. Marsh Supermarkets is counting on beacons to increase sales via personalized shopper engagements and drive incremental store visits. Marsh has created a new way to connect in stores with shoppers.
Bottom line: It’s time to get personal with Millennials.