Digital Grocery Personalization Stymied by Data Silos, Poor Strategy

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A new report has found that 89% of grocery execs surveyed believe that personalization is key to meeting their shoppers’ expectations, but few grocers are fully tapping into AI’s potential to do this.

Industry insights firm Incisiv and Wynshop, a provider of digital commerce and fulfillment solutions for local store-based retailers, have unveiled the findings from Grocery Doppio’s “State of Grocery Personalization 2024 Report: High Potential, Largely Untapped.”

The report revealed the following:

Adopting personalization could drive $12.3 billion in value:
—91% of grocers saw an increase in conversion when they deployed shopper segmentation and targeting.
—Personalizing the online grocery shopping experience this way led to an average 6.2% increase in conversion and 3.7% growth in basket size.
—Together, this represents $12.3 billion worth of incremental sales growth potential.
Grocery personalization is held back by data silos and lack of strategic direction:
—Grocery executives noted that the top three factors limiting their personalization efforts were the inability to integrate data from various sources (57%), the lack of a clearly articulated personalization strategy (51%), and the lack of in-house specialized staff and skill sets (44%).

The report is based on an August 2024 survey of 117 senior grocery executives in both business and technology functions. As well as in-depth analysis of survey responses and data from other sources, it offers best practices on how grocers can profitably implement personalization strategies.

Among the report’s additional insights:

89% of grocery execs surveyed believe that personalization is key to meeting their shoppers’ expectations, with 83% viewing personalization as a competitive driver, 77% claiming that personalization lifts sales, and 69% rating personalization as a C-level priority.
At the same time, though, just 14% of those same execs said that their organization’s current personalization activities meet or exceed shoppers’ expectations, with 37% saying that their organizations offer no personalization whatsoever and only 4% of their organizations having scaled advanced personalization capabilities.

“That only 4% of grocers are in an advanced stage of grocery personalization maturity reveals a lot,” observed Gaurav Pant, chief insights officer of both West New York, N.J.-based Incisiv and New York-based Grocery Doppio. “Personalization needs to be a C-suite priority, with a clearly articulated strategy and a focus on high-impact use cases like product recommendations and customized promotions.”

“Personalization doesn’t just make the shopping experience smoother; it builds loyalty, increases basket sizes and ultimately drives revenue and profits,” added Spencer Price, VP of strategy at Fort Lauderdale, Fla.-based Wynshop. “When you can anticipate what a customer needs before they even realize it, you’re not just offering a service — you’re creating a relationship. Few grocers are fully tapping into AI’s potential to do this, which means they are leaving serious money on the table by not leveraging these capabilities.”

Grocery Doppio’s “State of Grocery Personalization 2024 Report: High Potential, Largely Untapped” is available on Grocery Doppio, a free, independent source of grocery insights and data designed to help grocers jump-start, accelerate and sustain digital growth.