The new retail imperative: deliver personalized experiences

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LAS VEGAS — To stay relevant in today’s competitive market, retailers must truly know their customers and speak to them in way that is not only personalized but also truly personal, Stuart Aiken, Kroger Co. group vice president and chief executive officer of 84.51°, told attendees last month at IRI’s Growth Summit 2018 at the Wynn Las Vegas here.

During his presentation, Aiken focused on personalization for consumers and their shopping experiences, while sharing a powerful video citing examples on the connection between Kroger shoppers and employees.

“We have to inspire and connect with our customers. When you make those connections, you have a customer for life,” he ­explained.

The retail landscape is fragmented, and disruption is happening every day, so it’s no secret that customers have more options than ever before for where to shop.

Customer expectations are at an all-time high, and customers are putting incredible demands on retailers. “This means we have to utilize big data to better know our customers while cutting through the clutter to drive real customer connections and sales at the same time,” Aiken said.

He said the mission at 84.51° is very simple: “We believe in making people’s lives easier, and we do that through personalized connections and solving real customer problems. And if done right and in a truly personalized way, these solutions lead to growth, loyalty and ultimately sales.”

He said that 84.51°, a wholly owned subsidiary of Kroger, works exclusively with consumer packaged goods companies to deepen relationships with Kroger customers and brands to create measurable value. “Kroger Precision Marketing, powered by 84.51°, taps into purchase data from 60 million households from 2,800 stores in 35 states to create holistic campaigns across an expanded digital ecosystem.”

Its offerings include on-site advertising on Kroger.com, co-branded digital media across the open Web, and Kroger’s MyMagazine Sharing Network — an exclusive word-of-mouth platform that reaches Kroger’s most loyal customers with new products.

“Our job is to know the customer better than anyone else and then to deliver truly personalized experiences to our ­customers.”

He noted that consumers have an expanded range of options for shopping both online and offline. “But, while it’s an incredibly tough market, there has never been a more interesting time to be in our industry,” he remarked.

He said that Kroger’s approach to personalization has changed over the years. The company started with mass and moved to a more segmented approach. He explained that Kroger uses many ways to reach out to its customer base, including delivering 12 million pieces of direct mail.

“These 12 million pieces of direct mail go out every six weeks or so, and we see participation rate in the 65% range. Those are incredible numbers. We also send out MyMagazine — it’s a targeted way to bring content to our customers, such as personalized recipes tailored to specific households tastes and preferences. And we see participation in 50% range there too. This allows us to bring value and content together. These vehicles also help customers move through the shopping experience much faster.”

Aiken said that going forward, the company is looking at focusing on understanding “contextual relevance.”

“Relevance is defined by the situation, pressures and feelings the buyer has at each step; in other words, it’s contextual. It applies as much to information as it does to actions taken. Understanding what is contextually relevant for each buyer at any point in time is a major challenge for vendors. For example, whether a customer is vegan, or on a diet or if its wintertime and then combine that strategic focus with food. There is a passion and emotion involved with food, but how do we tap into that. No longer can a retailer rely on the functional needs we have to connect with customers and help them feel cared for.”

He pointed out that customers aren’t just changing how they shop and communicate — they are also looking for more from the retailer. “Customers have become far more savvy about their data and the value they want for that data. Our opportunity exists in the fact that customers are willing to share their data for great experiences.”

He said that 81% of shoppers are willing to share personal information with retailers in exchange for more offers. Consumers are always looking for ways to make their shopping experiences go faster.

“We have to focus our attention on what matters most to customers. If 81% of customers feel comfortable sharing their data, we need to make it worth their while.”

He then showed the “Dear Kroger” video. “We have 453,000 associates, and we created this video for them to show them personalized connections and when you make those personal connections you have a customer for life. These are the moments that matter. These are the connections we are all looking to create. To live from the functional transaction to truly a personal connection with customers.”

He said the customer’s interests, desires, plans and unconscious needs are the key. He called this information “thick data.”

“It’s this thick data that we are missing; it’s the data set we don’t have. If you are helping someone living paycheck to paycheck put food on the table, that’s a personal connection. This is the wide open data space that no one is currently playing in and requires a level of gaining trust with your customers and the ability to deliver a truly meaningful connection. A two-way dialogue with your customer is critical.”

He added that this is why companies are focused on customer data and analytics.

“We are seeing a massive data explosion that is opening up new opportunities to better understand and personalize to customers. We are moving on from the what to understanding the why that motivates customers. Continually advancing our science allows us to shape meaning experiences through these growing channels. It’s a combination of data, science and customer experience that is our maniacal focus, and that’s why the partnership between 84.51° and IRI is so very important. IRI provides a rich data source for us that allows us to maximize the understanding of customers both within the store and outside the store. They bring the outside in. Ultimately, we are going to transform this industry. We know what customers are telling us. We just need to listen,” he concluded.


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