Generation Next Thinking: The new rules of hyper-personalization
Personalization has been part of grocery retail since day one. More than a century ago, cash-and-carry clerks weighed and packed items for customers they knew by name. When self-service arrived, employees were freed from measuring and scooping and spent their time advising shoppers across departments. Fast forward to the launch of loyalty cards, when grocers used data for targeted offers, and then to the digital era, which brought even finer segmentation. Artificial intelligence (AI) enabled the next step: predicting individual needs and powering hyper-personalized experiences that truly feel more personal, relevant and timely.
“Traditional versus hyper-personalized boils down to the difference between a wave and a welcome,” says Kate McCormick, director of solutions engineering at Cincinnati-based Birdzi, a firm that provides AI-powered personalization and customer intelligence platforms for grocery retailers.
Traditional personalization, explains McCormick, is a wave. “It’s surface level: I know your name and your type or segment, and the engagement is transactional.”
Hyper-personalization is a welcome: grocers know the customer, what they need and when they need it. “It brings back what grocery was built on—when the shop owner knows the individual,” she says. “Hyper-personalization allows larger grocers to have those same meaningful interactions at scale, transforming them into more memorable interactions.”
Why hyper-personalization works
Behind the scenes, hyper-personalization relies on a mix of data, real-time analytics and technologies such as AI and machine learning. It analyzes a shopper’s past purchases, online browsing, app behaviour and loyalty data to get a detailed picture of an individual. The next layer comes from contextual signals such as location, weather or seasonal trends.
“If it’s rainy and cold on a summer weekend, you’re not going to sell as many hot dogs and hamburgers—people are going to be looking for comfort food,” says Alison Cox, distinguished designer and partner at IBM IX. “Hyper-personalization is that mix of understanding the customer’s propensity and preferences, which could be household preferences, budget, dietary constraints and historical patterns. It uses all that data and contextual information to predict their needs.”
READ: Making personalization profitable
The difference that AI makes is speed and scale. Traditional personalization, explains Cox, had to be programmed by humans. “There were tools to support the fulfilment and the application of personalization, but we were limited by our human capabilities and time.” With AI, those limitations are removed. Systems can analyze vast amounts of data in real time, adapt to new behaviours and continually refine recommendations based on what they learn.
This level of automation drastically reduces the labour and complexity involved. “Today, a retailer can identify an audience, consider all 40,000 SKUs in the store, set guardrails for discounts and hit the ‘go’ button,” explains Gary Hawkins, CEO of strategic advisory firm Retail Mindsteps. “The system executes that and, literally within minutes, it delivers the six most relevant offers to send to a million customers this week.”
The benefits of truly knowing your customers
Metro is one retailer putting hyper-personalization into practice. When members of its Moi Rewards loyalty program enroll and opt into Metro’s digital channels, the retailer tailors product recommendations and delivers targeted points and discount offers based on what they actually buy and care about, explains Stéphane Latreille, Metro’s vice-president, loyalty and customer engagement.
“As we learn more over time, we layer in bonus offers that encourage deeper engagement with their preferred banner across our food and pharmacy network— Metro, Food Basics, Super C, Brunet and Jean Coutu—so every interaction feels more useful, more rewarding and more ‘made for you, by Moi Rewards.’”
READ: Metro’s Alain Tadros on the company’s customer-first, data-driven loyalty strategy
For members, Latreille says hyper-personalization makes the program feel effortless and genuinely relevant. “There are fewer generic offers and more value on the items they already need, delivered in the moments and channels they prefer, whether that’s the app, email or at checkout,” he says.
“For the business, it increases engagement and retention, drives incremental trips and basket size, and strengthens loyalty to the member’s banner of choice across our food and pharmacy network.”
A strong factor in the business case is efficiency, says Joel Percy, vice-president, North America, at Eagle Eye, whose platform enables real-time loyalty, promotions and AI-driven customer engagement.
“There’s the adage, half my marketing budget is wasted; I just don’t know which half,” Percy explains. “Every week, grocers are giving discounts and points to people who don’t know they’re getting them and didn’t do anything intentionally to get them.”
With hyper-personalization, retailers will not only stop wasting money, he says, but they’ll also free up the budget they can invest in the right customers. “And so, you get a much higher sales growth per dollar spent on the customer if you can be more efficient.”
For Birdzi’s McCormick, hyper-personalization done well is habit-forming—in a good way. “It builds trust among shoppers, which cements a habit of shopping with you regularly,” she explains. “There’s stronger confidence that this retailer has my back. That, in turn, reinforces the routine of choosing that grocer each time the shopper needs food. The main purpose of hyper-personalization is to keep that habit loop continuously moving.”
Personalization in shoppers’ pockets
In this new era of personalization, retailers are adding agentic AI to the mix. In 2025, Walmart in the United States launched Sparky, a smiley-faced agentic AI assistant that moves beyond traditional keywords to conversational search. Designed to act like a personal shopper, Sparky answers questions like “What’s for dinner?” and provides tailored recommendations such as a meal plan for the week based on family preferences.
Building on this, Walmart is making big moves in agentic commerce, teaming up this year with Google’s AI chatbot, Gemini. When it’s relevant to the conversation—like planning a backyard barbecue—Gemini will automatically include relevant Walmart and Sam’s Club in-store and online products.
READ: How AI is changing the way people shop
While Walmart is quiet on whether tools such as Sparky will be coming to Canada, the retailer says it uses AI extensively to deliver better, faster experiences for its customers. “For example, we leverage AI to enhance search capabilities on Walmart.ca and power more relevant product recommendations, helping customers find what they need and build their baskets more efficiently through features like personalized ‘easy reorder,’” says Andrew Go, vice-president of e-commerce and marketing at Walmart Canada.
This points to the real opportunity for hyper-personalization: showing up in ways people will actually care about. “Our approach to personalization is focused on creating meaningful value for customers by understanding them deeply, anticipating their needs in the moment, and delivering products, services and experiences that truly resonate,” says Go. “For example, we can prompt customers when they may be running low on frequently purchased grocery items based on the timing and frequency of past purchases, so they never run out.”
Retail Mindset’s Hawkins says it’s the next phase of agentic commerce—shoppers having their own personal AI agent— that will “turn the world upside down. You tell your personal agent, ‘I need these items delivered to my door by six o’clock tonight. Find the best price and go,’” he explains. “So, there’s a machine that is making the decision of where to shop.”
To enable this, Hawkins says retailers must structure their data in such a way that the agent can read it. “That agent is not going to Walmart.com and looking at the website like you do as a human being. They’re looking at data, inventory, stock levels and reliability.”
The same idea applies to personalization. “If there are personalized deals available to me when I send my agent out, they have to be structured in such a way that the agent can read them and apply them. But this is where it’s all going—and it’s happening fast.”
Laying the groundwork for success
Hyper-personalization sounds great in theory, but it’s not as simple as sending in the bots. “A lot of retailers have a mix of legacy technologies and to layer the latest AI intelligence on top of that, they’ll quickly run into bottlenecks,” says Eagle Eye’s Percy. “Many are chasing this vision of the future and bumping up against the reality of some of their internal systems, and that’s where a lot of the work is happening these days. It can sometimes be slow and painful foundational work. It’s not the sexy stuff, but it’s what you need to effectively leverage the latest tech.”
Beyond getting their tech house in order, Birdzi’s McCormick advises grocers to focus their personalization strategy on “winning the routine.” In trying to influence a customer’s behaviour, grocers tend to think of personalized communication as the trigger. “A best practice is to acknowledge that the cue for starting a habit is an empty refrigerator—it’s not whether you sent an email,” she says.
For grocers, that means trying to stay at the top of the consideration set. “How do you create that routine where shopping at that specific grocer is on autopilot,” she says. “The key to that is having good, consistent rewards that make the routine worth repeating.”
Trust also remains a critical consideration. IBM’s Cox points to a “trust gap” with AI in general. “People need to trust AI to use AI. If end users don’t trust AI, then companies aren’t going to see the benefit of their investment. So, we need to balance how we are going to mitigate this.”
Eagle Eye’s Percy has simple advice to help grocers avoid any pitfalls of hyper-personalization: don’t do anything stupid. “Data privacy and data protection are critical, and you need the right security systems,” he says. But there’s also a rule of thumb, which is, “just because you can do something doesn’t mean you should.”
Certain areas of people’s purchasing habits are safer to avoid, Percy explains. “If you determine it’s the right time for Joel to buy a bulk pack of paper towels and you give me an offer and you got it wrong—I actually don’t need paper towels—who cares? I’m not going to be upset about it. But, if I don’t eat pork for religious reasons and you send me an offer on pork, then that feels different. It feels like you’ve violated something there, especially if you say this is personalized to me.”
Preventing such misfires involves putting the correct controls in place. “It’s fairly simple. If people haven’t bought pork before, don’t offer them pork,” explains Percy. “If the discount is specific to the organic grape-flavoured snack my toddler loves, fantastic. I’m buying those all the time, it will give me savings and it doesn’t feel like you’ve crossed the line into personal territory.”
What’s next?
The next frontier of hyper-personalization is the store itself—going full circle to grocery retail’s roots. “Far too often, retailers neglect the human side of personalization—knowing you as a human being and building a relationship with you as a human customer—and that happens in the store,” says Hawkins. “It’s simple things like recognition and encouraging the store manager and other employees to get to know their customers.”
READ: Six forces redefining Canadian grocery
Here, too, technology is the enabler. When conversing with a customer, a store associate could ask them for their loyalty card, which pulls up information on their shopping history and dietary preferences, says Hawkins. “That tells me you have a gluten allergy and enjoy Indian food, so I could begin tailoring our discussion to what I know you like when answering your questions.”
The fact remains, most people still like to shop in stores, notes Percy. It can also take years for people to adopt new shopping habits—e-commerce, for example, didn’t experience the rapid uptake many retailers expected.
“The retailers that are going to win in the next decade are going to find ways to meet their customers where they are and use personalization to make an in-store experience better, make a follow up experience better, make a returns process better,” says Percy. “All these elements—like hitting singles rather than home runs— are going to be important.”
This article was first published in Canadian Grocer’s May 2026 issue.
