By: Susan Viamari, IRI
“Using our own information, we could better meet the needs of our customer by making it easier for her to shop the store.” – Regional Grocery Marketer
Personalization. What’s the big deal, really? In a country of more than 320 million people, is personalization even possible?
It is. And it’s also a very big deal, particularly in the retail space. We can’t deny that we live in an omnichannel world – a world where customers have virtually limitless options in what products they will buy and where they will buy them. The rise of the internet has also led to a highly connected world – a world in which customers are bombarded with information online and off, in the store and at home. Out of necessity, customers have become experts at tuning out products and marketing messages that aren’t immediately relevant in their daily lives.
Personalization also enhances the customer experience. How do you feel, for example, when you receive a coupon book that has coupons for many of the brands you like to buy? How about when you walk into your favorite store and see an endcap with your favorite chips and dip—together and on sale? It gives you a little boost, right?
The good news for marketers is that data and technology now make it easier for brands and retailers to deliver personalized products and support those products with highly targeted marketing programs.
Loyalty card data (aka frequent shopper program data) is a key to success. One regional grocery retailer’s efforts to increase cross-purchasing behavior in the beauty aisle through improved aisle layout provides an excellent example of the power of FSP data.
As a first step, the retailer’s loyalty card data was mined to identify a series of category penetration, cross purchasing rates, trip frequency and purchase cycle across beauty and personal care aisles. These analyses were completed across the retailer’s own customer segmentation profiles, which clearly illustrated patterns for the highest-value customers at each store location.
Overlaying those results on store maps quickly illuminated how existing space and store fixtures could be used to maximize the likelihood of customers purchasing across categories. Aisle recommendations were also customized based on store clusters and the mix of customers within each of those clusters.
An initial test in 20 stores proved the new layouts were successful. By customizing the store layout to the needs and wants of its highest-value customers, the retailer ensured that those customers are now met in the aisle with relevant products organized in a convenient manner. The new aisle layout was expanded across all new and remodeled stores, driving incremental category cross-purchase growth of 18 percent, and boosting the retailer’s topline sales by $25 million.
The CPG environment is extremely competitive. Consumers have seemingly limitless options for products and places to shop. And growth is still hard to come by. Investing to connect with your highest-value shoppers is more important than ever before. Luckily, loyalty card data makes that connection more doable – and more powerful.
Questions about how loyalty card data can improve your in-store success? Contact your IRI representative or me at Susan.Viamari@IRIworldwide.com.