April 4, 2017 - Kimberly Miller


Can you imagine if every other customer that came into your store declared, “you don’t understand what I want and I’m done shopping here?” You’d do something about it. You’d make sure that customer was made to feel special and do what you could to ensure they’d come back to your store.

Now, some of you are likely thinking this scenario is a bit far‑fetched. Customers don’t come in and make such declarations.

You’re right. They don’t come in at all.

A recent CMO Council study stated that 54% of North America customers are willing to end their loyalty to a retailer if that retailer doesn’t provide tailored offers.

But, how can retailers personalize each shopper’s offer?

Data is omnipresent these days – so much so, retailers are spending billions aggregating and analyzing it to figure out how best to engage their customers.

Kroger, one of the world’s largest grocery retailers, partnered with Dunnhumby as early as 2013, to better understand their customers. (Kroger acquired the company in 2015, and it operates as 84.51⁰, a wholly owned unit of Kroger.). Kroger began to issue offers that were relevant to the customer. Not surprising, they saw a jump in revenue, a jump 84.51⁰ CEO Stuart Aitken attributed to Kroger “understanding individual customers and not relying on demographics.”

Not every retailer can have an in-house team of 500 people dedicated to data and analytics that drive targeted offers. Most retailers admit they don’t do a great job of personalization. According to a Gartner study, less than 10% of Tier 1 retailers think they’re highly effective at it and nearly 33% report having limited or no capability to support personalization efforts.

Many retailers face challenges in data collection. They’re often unable to link different technologies and systems, which makes it difficult to gain insights, let alone act on them.

So how can a retailer move toward targeted offers? The first step might be to ask your systems or POS provider if they’re able to connect a transaction to a specific customer in real time. The second step would be to ask if they have a way to distribute offers and track their redemption. If they can do all that without requiring any changes to your existing infrastructure, you could start with an opt-in campaign to build your database, and then segment your customers based on the basket analytics. If you have an existing loyalty program, you could run an analysis on the frequency of members’ store visits and distribute a low-margin offer to those that haven’t been to the store over a set time period.

Whatever your approach, the most important thing is to start one. Customers aren’t getting less savvy. There’s no better time than now to declare to your customers you’re ready to connect with them.

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