The Promotions Experience: Beyond Surface Beauty

In a recent series of articles, Grocery Dive looked at a trend in grocery that deserves attention. Grocers of all kinds – from Kroger, Whole Foods, and Publix – are modernizing their stores to improve the customer experience, build loyalty, and provide the right “mix of price, choice and convenience.”

The dollars are big. Kroger alone is investing $45 million to upgrade 15 stores throughout the midwest. Weis Markets – a popular chain along the Eastern seaboard – has spent six years preparing to remodel its stores, as part of its growth strategy. And the biggest grocer of all – Walmart – has made “its grocery department a centerpiece of its ongoing project to upgrade hundreds of superstores.” 

The shift to personalization

There are a number of factors to explain this. Many grocers – including traditional supermarket chains – today find themselves competing for new shoppers, e.g., young professionals searching for products in health and wellness, organic and natural foods, and who shop only at stores that have sustainable practices. This is just one demographic change.

Second, for most of the post-pandemic, food prices soared along with food inflation, which only recently has begun to soften. And grocers learned that both lower income and affluent shoppers are price sensitive, according to a 2023 report by dunnhumby, the global retail consulting firm. As part of the remodel, many grocers are looking to enhance or increase personalized offers – based on first-party customer data – into the concept of experience.

Beauty is only skin deep

Everyone in retail today talks about the user experience. Let’s think of experience in this expanded form. First there’s the look and feel of the remodeled store.  If the store is attractive and easy to navigate – you will likely enjoy the experience. But the beauty of the store is only skin deep. The next layer is the technology infrastructure underneath the beauty to carry out essential tasks such as category management, inventory, and, increasingly, personalization.  In addition, that infrastructure helps with the challenge of realizing a true “connected customer” experience, across all channels – stores, digital, and mobile – with disparate and legacy systems.

For many in the grocery industry, the conversation stops here.  To personalize the overall customer experience, remodeling stores is not enough. The promotions experience itself must be personalized. Since the time that traditional grocers began using digital channels, the couponing and promotions experience has lagged. Why? Because grocers continue to operate in a siloed world, managing physical stores and digital separately, while the shopper sees the grocer as one brand across channels. Often, for the shopper and associate, this creates confusion at the register as to which offer applies to the current sale (or, in what order). And it doesn’t happen just at the physical register. It happens online, and mobile.  If you’ve had to wait for the system to determine the right price, or which promotion applies to your purchase, you’ve experienced some of what we are talking about.

And it creates problems for staff as well. Managing conflicts in promotion is too much to handle, and can result in loss of revenue and customer loyalty, the very reason why stores care so much about experience. This is a people problem as much as a technology problem. As the recent rise of generative AI has shown, the automation of repetitive and complex tasks is a gift to staff, enabling them to focus on other parts of the job.

As many of our clients have demonstrated, a great promotions experience is a thing of beauty. But not skin deep – it’s at the core of the entire shopping experience as the customer checks out, which one hopes will leave a lasting impression.