5 Benefits of Leveraging Consumer Data in Digital Grocery

The onset of the pandemic has completely disrupted the way the grocery industry used to function. Consumers were forced to adopt a new way of shopping and became heavily reliant on grocery websites and mobile apps to fulfill their grocery needs. The grocers also had to accordingly alter their omnichannel strategies to cater to the evolving customer expectations. A PayPal survey shows that nearly 75% of US shoppers who did their grocery shopping online in the past year plan to do it again.

According to the Incisiv Annual Digital Benchmark 2021, digital sales have risen from 3.4% of total grocery sales in 2019 to 9.5% in 2021, and are expected to reach 20.5% by 2026. As per the report, 75% of shoppers would have purchased groceries online by 2025. The adoption of online grocery has continued to grow even after the ease of pandemic-related restrictions driven by ease and convenience.

This boom in online grocery shopping enables grocers to collect a large pool of consumer data, which they can use to understand their needs and expectations while ensuring profitability and loyalty. Here are some of the key benefits of leveraging consumer data in digital grocery:

Personalizing Customer’s Shopping Experience

Personalization and transparency have gradually become the two important pillars of customer satisfaction, as the adoption of online grocery shopping increases. According to Epsilon, 80% of consumers are more likely to purchase from a retailer which provides a tailored experience. 

For grocers, personalization has become of even more importance as many consumers miss the personal touch of in-store shopping which they frequented multiple times a year. Their focus has drifted from providing the right product to the customer at the right price to convincing them that their needs would be met and making them feel special.

As per Ryan Draude, Head of Loyalty and Digital for Giant Food, “one of the most effective ways food retailers can build ties with their customers is by turning grocery shopping into a personalized experience built around their needs and preferences.”

Tailoring Recommendations & Offers 

If heading to your online grocery destination and pushing the reorder button was the standard shopping pattern in 2020, today's shoppers want even more. They seek variety. They look for recommendations or offers, tailor-made to their needs. 

Insightful customer data is the backbone of providing consumers with an unparalleled shopping experience. Loyalty programs and purchase data help grocers in tailoring offers and recommendations as per customers’ tastes and preferences, by identifying their shopping behavior with every recurring purchase. Kroger is also now utilizing data to offer its customers personalized deals and discounts to earn their loyalty.  As per The Customer Loyalty to Merchants Survey 2022 by PYMNTS, 52% of customers said that customized promotion was important for their loyalty to a grocer. 

Managing Inventory Appropriately

Customer data can help grocers in predicting the demand, and accordingly, ensuring the supply of products. Managing inventory has become a difficult task for grocers due to the seasonality of the products, and fluctuations in demand. They face the challenge of overstocking or dissatisfied consumers due to a shortage of products. According to Inside Big Data, 51% of consumers faced the challenge of out-of-stock products in 2021, which led to a loss of USD 3 billion for grocers in the US.

Building Digital Infrastructure

Consumers now want to be able to find the required products and checkout as quickly as possible. Determining such consumer insights is inspiring grocers to invest in technology to improve the shopping experience provided to their consumers. According to Business Wire, Albertsons has partnered with Google to create in-store maps, AI-powered conversational commerce, and predictive grocery list building. With this partnership, Albertsons aims to cover a range of tech solutions that results in customer experience becoming more efficient. 

Boosting Profitability

According to the Incisiv-Wynshop Survey, 86% of grocery retailers are not satisfied with their online profitability. Grocers can leverage consumer data to turn this around. Grocers must first gather enough consumer data about the volume and frequency of digital orders. This information can help them organize digital orders in a way that is most lucrative. For instance, how increasing the product prices while offering better services can impact customer purchasing patterns. Analyzing such data can help understand how to take decisions that can boost profitability without risking lost sales.

With an immense digitalization trend taking over the entire grocery industry, it is pertinent for grocers to understand the importance of consumer data and how its benefits can be leveraged. This can empower grocers to discover opportunities that can lead to immense customer satisfaction, and thus, future growth.