Two hot trends, personalization and frictionless retailing, are at odds with each other
After e-commerce and AI, perhaps the phrases getting the most airtime at Groceryshop 2019 in Las Vegas last week were personalization and frictionless retailing — more so than robots or even mobile.
Personalization has been the talk of the industry for the last few years, an evolution of the targeted shopper marketing we’ve been trying to get to since before e-commerce was even a thing. But personalization has recently taken on a new and more comprehensive role as the go-to-market strategy for nearly all digital-only and many traditional retailers.
“The amazing computational power we have today is fascinating. You can get personalized so fast,” said Rucha Nanavati, group vice president of information technologies for Albertsons.
Frictionless retailing, to a large degree a spinoff of frictionless commerce, is defined in several different ways — a trademark of a trend in its infancy. It can mean everything from cashierless/Amazon Go-like stores to low-touch processes like scan-based trading. For the purposes of Groceryshop 2019, vendors and practitioners used the term as a bit of a catch-all that includes mobile, digital payment systems and practically any solution that improves supply chain performance, especially in the last mile to the consumer.
At Groceryshop, Ron Bonacci, vice president of marketing & advertising at Weis Markets, explained that Weis tries to get as granular as possible with its supplier and product data to ensure that the right product gets to the right store as efficiently as possible. For instance, he said Weis is “looking for CPG companies to provide 200 or more attributes to help deliver the best actionable insights possible.”
“Friction is a massive threat to all of our businesses,” added Carlos Garcia, CPG-retail, industry leader at Facebook. “We can’t have loyalty unless we deliver on convenience.”
On the face of it, these two concepts are at direct odds with each other — almost by definition the more products, promotions or prices are customized, the more friction is created in the extended supply and demand chain. But the bottom-line fact is that this is what the shopper now demands — more for less — and woe be to the retailer or brand that can’t deliver.
DISCUSSION QUESTIONS: How can retailers and their trading partners best reduce friction in the extended supply chain while simultaneously increasing the personalization of offers and merchandising to shoppers?