How important is non-transactional data to personalized offers?
Through a special arrangement, presented here for discussion is an excerpt of a current article from Frozen & Refrigerated Buyer magazine.
Kroger uses an abundance of transaction history from its loyalty cards to create personalized offers for its customers. But it also taps a whole host of lifestyle attributes based on demographic, geographic, psychographic and other external information to further refine those offers.
“Our mission is to making people’s lives easier by harnessing the data to create a more personalized, more relevant in-store experience,” said Yael Cosset, chief commercial officer and CIO of Kroger’s data analytics and marketing firm 84.51. The service grew out of Kroger’s long-time partnership with U.K.-based customer science company dunnhumby USA, whose technology assets it acquired in 2015. “But to truly understand what matters to our customers, we need to go well beyond the traditional way of looking only at the transaction … [and include] what happens around it as well,” he explains.
So, why did customers buy a particular product? What did they think about it beforehand? Where did they get their information? Who or what influenced the purchase? Said Mr. Cosset, “All of that feeds into our knowledge of the consumer and what matters to him or her.”
Today, thanks to the digital revolution — and mobile phones, in particular — Kroger finds itself able to gather a lot more customer information than even it may have thought possible.
“The important change that’s happened over the past six years is that the consumer’s path to purchase used to happen inside the four walls of the store, and it was all observable,” says Brian Kilcourse, managing partner at RSR Research. “Now the path to purchase begins outside the store, in the digital space. But it’s just as important to observe those non-transactional behaviors. It’s harder because it takes technology to do it, but retailers have to in order to remain relevant to consumers.”
DISCUSSION QUESTIONS: Do you see non-transactional data becoming as important as transactional data in guiding personalized offers to consumers? What are the inherent challenges in using non-transactional data to tailor offers?