Groceryshop 2022 recap: The future of customer loyalty is personalized

While it's been a very volatile few years for CPG brands and retailers, what hasn't changed is that customer loyalty is still crucial. The time is now for businesses to reimagine customer loyalty and build up their customer base. Michael McGowan, senior vice president of Commercial Insights and Loyalty at 84.51°, a retail data science, insights and media company and subsidiary of Kroger Co., shared his expertise on the current loyalty landscape and how it is evolving during a panel discussion at Groceryshop 2022.

The “New Customer Loyalty Tactics” session explored how price inflation, new competitors and changing consumer preferences are challenging customer loyalty for grocers and CPG brands — and how they are thinking beyond traditional approaches to discounts and rewards programs by looking toward new strategies and tactics.

During the discussion, McGowan shared essential ways for CPG firms to boost shopper satisfaction, drive repeat purchases, and increase consumer lifetime value. The following excerpt has been lightly edited for length and clarity.

It starts with understanding shoppers and making sure you deliver on great experiences. That means having quality products that matter to them and providing the greatest associate experience. This gives brands the opportunity to continue to serve consumers on an ongoing basis and ultimately generate a long-term relationship with them.

Personalization is an important differentiator. It’s about using data science and machine learning to drive personalization to scale. 84.51° delivers insights at the point of purchase that drive re-engagement, positive consumer sentiment and repeat purchases. This is based off years of personalization and machine learning that help brands engage with customers. Powered by 84.51°’s insights, Kroger, for example, sends out offers that have a 15% redemption rate. It’s remarkable in today's world to see that level of redemption.

In addition, retail media is huge for us. Our personalization approach is driving retail media. The way we’re executing and growing that platform through Kroger Precision Marketing, and our focus on personalization and data science to scale, enables us to be a leader in being addressable, actionable and accountable.

We're also incorporating personalization into other areas. For instance, Start My Cart functionalities on Kroger’s website and app use data to make consumers’ lives easier. Our relevancy science serves up the right coupons so consumers don't have to scroll through 300 of them to make a selection. At 84.51°, we're committed to the personalized experience because it's good for consumers and it helps everybody win in the space.

Loyalty can be a very transactional relationship for retail. But food is an emotional activity. Sharing a meal with someone, family occasions and holiday occasions are emotional opportunities. It starts with what we declare as whole, fresh, and friendly. From a Kroger perspective, that's about having great quality products and having a really good experience. We help Kroger consistently deliver that. Ultimately, we're creating the opportunity to build a more emotional connection with shoppers and be the place to go for holiday shopping.

I recently had an email forwarded to me from a shopper in South Carolina. She said she was recently retired, had noticed high prices in the grocery store, and was trying to get healthier. And in the last two weeks, she had received a MyMagazine offering and a loyal customer mailer and she just wanted to thank us for that. She said she used all 12 of the coupons that were provided, and she really appreciated it. At the end of the end of the email, she said ‘thank you for making a difference.’ Those types of communications are super uplifting to us at 84.51°, because it shows that the personalized experiences we help provide are making people’s lives easier. Delivering on promises to your customers and showing them that you know them builds strong emotional connections.

Learn more about how to deliver personalized experiences that maximize customer loyalty.