Supply Side: Personalization is a new wave of opportunity in retail

Personalization is a new buzzword in retail and when executed well has the potential to help retailers and suppliers connect with consumers on a deeper level, according to Bill Akins, senior vice president of business innovations at Rockfish.

Akins said first there is the promotional side of personalization – targeting shoppers by personalizing the message. He said this is where Wal-Mart Stores is going with its “Advertising Network,” trying to help suppliers with “in the moment” marketing, instead of just relying on syndicated data. Akins said the Wal-Mart Advertising Network seeks to be a media clearinghouse avoiding the one-size-fits-all approach, and instead looks for ways to personalize messaging directly to customers in targeted categories and demographics.

Wal-Mart is not alone in its efforts to direct promotions for products it sells on behalf of suppliers. Amazon has a similar setup with its Amazon Partners Network and grocers Kroger and Publix are also actively involved in helping suppliers personalize marketing efforts directly to consumers.

Akins said retailers also are using personalization to convey convenience for shoppers. He said Wal-Mart and other retailers have long figured out consumers don’t shop for Prego pasta, but rather they shop for a spaghetti dinner. He said retailers like Wal-Mart are increasingly looking to organize stores to become more like problem solution centers than just mere shopping destinations stocked with products.

During the holidays it was not uncommon to see the endcap displays of aisles merchandised to help shoppers save a few steps. For instance, bags of pretzels were merchandised with almond bark, the items needed to make dipped pretzels for the holidays. These two items would normally be found on separate aisles in the store. The same was true for canned chili and crackers, and an entire baking center was placed in Wal-Mart’s Action Alley (grocery side) of supercenters. Everything from cake mixes, to nuts and Karo Syrup could be found on this large display.

The retailer also had similar convenience displays for back-to-school supplies and looks for ways to cross-merchandise products in problem solution centers around the large supercenters. Akins said Wal-Mart is also trying to personalize the shopping experience for more convenience online.

“What if a parent could go online and search for Mrs. Smith’s second-grade class supply list and purchase the items online and have them sent directly to the school,” he said. “That is a level of convenience some parents would appreciate. These types of options are coming very soon, if they aren’t already available in some areas,” Akins said.

One of the more exciting opportunities for retailers is using personalization through the shopping experience online and in stores. Atkins said retailers are using technology to get close to the customers’ preferences and then prompting consumers through their shopping experience. For instance a message might pop up that says “don’t forget the bread” if sandwich meat and chips are in the basket. Perhaps a regular customer omits diapers from the cart, and the retailer knows they buy them nearly every week. The shopper could be prompted to “pick up diapers.”

Akins said this type of prompting can be eerie for some people, but in the post 9-11 world many consumers are more comfortable giving up privacy if it means convenience. He often refers to a quote made by Wal-Mart Chief Information Officer Karenann Terrell two years ago during the first Northwest Arkansas Tech Summit held in Rogers. Terrell said, “One person’s creepiness was another person’s convenience.”

Akins said retailers are walking that fine line, and technology is available. But it may be a bit longer before mainstream consumers are ready to forego all their privacy concerns.

“You have to give up some privacy to get the ultimate convenience, and true personalization largely hinges on relinquishing some privacy as well,” he said.

Working Together
Akins said suppliers and retailers can also work together using personalization to inspire consumers. Wal-Mart did this recently in stores with a Pioneer Woman display, an exclusive deal signed with Ree Drummond, host of the popular Food Network television show “The Pioneer Woman.” In the kitchenware aisle, Wal-Mart used shelf tags to help shoppers get inspired to go online to Pinterest.com for more ideas on how to use Pioneer Woman cookware, offering recipes and other decorating ideas for Pioneer Woman merchandise sold at Wal-Mart.

He said this was the first time Wal-Mart used shelf tags to try and inspire shoppers who sought a deeper experience with their purchase. Customers who visit the Pioneer Woman’s Pinterest Board can see handpicked items that Drummond picked as her favorite pieces from the Wal-Mart collection and her own country-chic collection. The page has more than 95,600 followers.

Lastly, Akins said suppliers have an opportunity to personalize products to consumer wishes. Several years ago, he said Jones Soda Co. did it by allowing customers to order various soda flavors to fit their whims online. He said everything from turkey and dressing and pickle-flavored sodas were sold direct to consumers. Just this past year, Coca-Cola sought to personalize packaging by using first names on the cola bottle labels, and the response was well-received by consumers. Mars Candy did a similar thing with Snicker bar labels which were redesigned to describe how people act when they are hungry. Label bearing the adverbs “Feisty” “Grouchy” “Loopy” “Spacy” “Grouchy” and “Impatient” to name a few.

“Personalized labels are yet another way suppliers can market directly to consumers whether it’s sold through retailers or manufacturer websites,” Akins said.

In 2015, Anheuser-Busch also rolled out Bud Light cans with localized NFL team logos as part of its #MyTeamCan campaign. That same year, restaurant giant Chipotle put short essays from famous authors on its cups and paper bags to help inspire its customers.

Akins expects to see suppliers and retailers looking at opportunities to personalize more packaging in the future as it’s not too invasive, and yet it does demonstrate suppliers’ and retailers’ desire to understand their customers’ needs.