Personalization is one of the hottest topics in retail right now. At conferences like NRF and NGA, the concept was featured in nearly every session, from how to personalize in-store activations, to creating detailed targeting within marketing efforts and fine-tuning your supply chain. Retailers across the country are prioritizing this business strategy, jumpstarting projects that will turn their stores into personalized havens for their customers.
Or will they?
Many retailers are weary of personalization, as it is difficult to define, a concept that is more emotions-based than directly measurable. As a leader in your company, it’s impossible to ask your staff to give you a single piece of data that will give you the full story when it comes to the personalization of your stores.
It’s a conundrum. If personalization is integral to maintaining a successful business in 2019 and beyond, then we need to find a way to measure our projects’ results in order to determine if we’re meeting the personalization benchmarks that customers expect.
In this post, we’ll explain why personalization matters to your customers, and give you five key metrics to measure as a grocer to determine if your stores are up to the personalization standard.
Why a personalized experience matters to your customers
Let’s face it, as consumers we are all looking for a way to make our lives easier. When we’re purchasing new products, we buy based off of our friends’ recommendations so that we don’t have to do the work of researching ourselves. We expect to be served with offers that are personalized to our purchasing habits. When we walk into a store, we want to feel like they have taken our preferences into account when selecting the products that they’ve put on the shelves, and the deals that they’re running.
As consumers, we want to feel like the store is working for us and us alone.
As retailers, we need to be conscious of this consumer desire. Though you know that in reality total personalization is not achievable in-store (yet!), you need to make the customer experience a top priority. First and foremost, this is to achieve customer satisfaction and reap the rewards of a loyal customer base that recommends your stores to their network. Second, a focus on personalization can have major effects on your bottom line.
According to a report by Salesforce, 37% of shoppers who engaged with a personalized product recommendation were nearly twice as likely to come back to a retailer’s website, and purchases where a customer interacted with a recommendation had a 10% AOV. Though these metrics refer to online purchases, it’s reasonable to say that in-store personalization would have a similar effect on customer behavior.
If you’re ready to see what personalization could do for your stores, you’re going to want to keep reading. We’re breaking down the data that you’ll need to determine the success of your personalization efforts, and showing you how each can apply within your store experience.
Use these 5 metrics to measure the impact of your stores’ personalized experiences
Revenue per visit
Revenue per visit is a metric that you’re probably already tracking, but are you using it to gauge the results of your personalization tactics? This stat references the amount of (you guessed it!) money that your business is taking in per visit from a customer.
So, how exactly does that line up with personalization? Revenue per visit can be used to determine whether or not you are employing personalization strategies that are impacting your bottom line. For example: are you stocking your shelves with items that are personalized to your clientele? Are your targeted communications working?
If your revenue per visit goes up when you implement a new tactic, you can determine which projects are working, and which offers are being redeemed and having an impact on your business. If it goes down, you can make quick changes to your personalized recommendations so that customers have a more satisfactory experience.
If you’re planning on using tech in order to personalize your in-store experience, tracking metrics becomes even easier. In this scenario, you can use a stat like conversion rate to see how well your offers and communications match up with the customers you’re sending them to.
When using a loyalty program or sending personalized coupons via an app or email, conversion rate is important to track and understand because it tells you whether you’re truly offering a personalized experience or not. If you have a low conversion rate, you may need to do a bit more market research or data collection in order to offer the level of personalization that you’re hoping for.
Top expired losses
This metric is particularly pertinent to grocers, as they carry items that have the potential to expire on-shelf. Tracking your top expired losses not only allows you to stop buying products that aren’t moving quickly enough (resulting in expired shrink) – it lets you make more room for items that are popular with your guests and your community.
The real question is: how exactly can you track expired losses? While manual processes have been the go-to for decades, it’s time for grocery to take a step forward as an industry and rely on technology-based systems that do the hard work. Date Check Pro, an expiration date management software, provides this data point for you right in their dashboard. No more coming through date checking logs or inventory reports to determine which items are holding your store back.
Grocery stores are the cornerstone of any vibrant community, so the opportunity to create a store that reflects your community’s desires and dislikes is a chance for personalization that you can’t afford to miss out on.
Lifetime value is a metric that tells you how much revenue you’re likely to take in from a specific customer. You can use loyalty program and other customer data to gather the information that you need for this metric, but did you know that you could use it to measure your stores’ personalization?
Personalization has a high effect on loyalty (80% of consumers say they are more likely to do business with a company if it offers personalized experiences according to Edelman) which generates a higher lifetime value. If your customers have a low lifetime value, it’s likely that you need to take a look at how you’re addressing personalization in your stores to keep your customers coming back.
Last but not least, determining how personalized your stores are for your customers can be as easy as simply asking your customers how you’re doing. Anecdotal data is just as important as quantitative data when it comes to evaluating customer experience.
By sending out a survey or asking customers to rate you in-store, you’ll gain valuable feedback and ideas and get a sense of whether or not your customers truly feel like they have a personalized experience in your stores.
Personalization is the key to maintaining a successful retail business today, but it can be notoriously difficult to measure. Use the metrics that we’ve provided above to gain a better understanding of your targeted efforts at a high-level so that you can make changes in operations, marketing, and supply chain that will have a positive impact on your customers and on your bottom line.
It’s going to take a lot more than personalization to be a top grocer in 2020 and beyond. We’ve compiled everything you need to know about being a community grocer into one handy eBook. Click below to download this free resource.