Seizing the data opportunity
The ongoIng COVID-19 pandemic has brought about a wide variety of changes for Canadian consumers and grocery retailers alike. Many existing trends within the industry have been accelerated by the pandemic, and retailers have had to quickly adapt to the rapidly shifting shopping habits of Canadian consumers. Some of the most prominent trends in the industry throughout the past 18 months include the explosive growth of grocery e-commerce, and with it the vast expansion of grocery delivery, as well as the many changes to the in-store shopping experience. While some trends such as social distancing and contactless shopping experiences are likely to fade away in time, one that is likely to become a permanent fixture in the grocery industry in years to come is the availability of vast quantities of consumer data, acquired primarily through the expansion of grocery e-commerce.
While tracking and analyzing the purchasing habits of consumers is not a new concept in grocery retail, the explosive growth of e-commerce has greatly expanded the amount of data that is available to grocery retailers. This expanded access to data also comes at an opportune time; throughout the pandemic, consumer shopping habits have changed out of necessity as people adapt to a new way of life. Consumers are cooking at home more than ever before, and after more than a year of doing so, they are growing increasingly adventurous in their food preferences. After growing tired of purchasing cooking staples and preparing basic meals at home, consumers are expanding their horizons by more frequently purchasing exotic ingredients and preparing more adventurous meals at home. While such trends are clear when reviewing inventory data in hindsight, the increasing availability of data from digital purchases is enabling grocery retailers to view and analyze emerging trends in near real-time. Having access to this data is allowing grocery retailers to better manage inventories and provide more attractive and personalized offers to consumers.
Canadian grocery retailers have taken note of this opportunity and are working to expand their digital capabilities to better compete within an increasingly digital industry. One example of a brand seizing on this opportunity is the November 2020 acquisition of technology company Eyereturn Marketing by Loblaw Companies Limited. Loblaw hopes to use Eyereturn’s technology and expertise to enhance its marketing strategy through the use of targeted ad campaigns and personalized promotions. The initiative is also likely to increase consumer engagement by providing more attractive offers to consumers and strengthening the relationship between consumers and grocery retailers.
Personalization is a growing trend in the retailing industry at large, and consumers are increasingly seeking out brands that they feel understand them and cater to their needs on a personalized level. Brands that experiment with personalized offers are also more likely to see enhanced consumer engagement through loyalty programs. This will, in turn, advance the cycle of consumer data acquisition, allowing grocery retailers to continue to build more informative insights into consumer behaviours and offer more attractive deals to shoppers.
Grocery retailers are working harder than ever before to adapt to evolving consumer preferences. While there are still (legitimate) consumer concerns about privacy and data security, the increased digitalization of grocery retail is likely here to stay, and it will only continue to evolve in the future as grocery e-commerce continues to expand. Grocery retailers are also taking privacy concerns seriously, and they are working to ensure consumers that enhanced data availability and analysis will serve to enhance the shopping experience for consumers and retailers alike. While grocery retailers are almost certain to benefit from the additional insights into consumer behaviour, shoppers are also likely to benefit from a better shopping experience through products and offers that more closely meet their ever-evolving needs and preferences.
This article appeared in Canadian Grocer's June/July 2021 issue.