Four Opportunities to Personally Target Customers
NATIONAL REPORT — Today's shoppers are increasingly demanding more from retailers, whether it's online or in a physical store. They want what they want, fast and easy, and for the experience to be as personally relevant and convenient to them as possible.
"Personalization is the future," said Tyler Tanaka, senior director of digital, loyalty and brand marketing at travel center operator Pilot Co., based in Knoxville, Tenn. "It's about being able to have a good understanding of your guest and help them get what they want, where they want it and when they want it, and it gives you a tremendous opportunity to make their day better, whether it’s saving time or money."
Personalized offers also benefit the retailer, especially the bottom line. A study commissioned by Google and conducted by Boston Consulting Group found that when the shopping experience was highly personalized, customers said they were 110 percent more likely to add additional items to their baskets, and 40 percent more likely to spend more than they had planned. The study also showed brand satisfaction increased with personalization, as brands taking the personal approach had net promoter scores 20 percent higher than those with a low level of personalization.
And if retailers can focus personalized offers on higher gross margin products, it’s even better. For example, gas might offer a 3 percent gross margin, whereas soda or chips would be higher, and foodservice would be even more. It's not only about understanding your customers, but also offering personalization for things you want them to have or purchase, said Sastry Penumarthy, co-founder of Punchh, a customer engagement and loyalty solutions provider based in Silicon Valley, Calif., that works with convenience store chain Casey's General Stores Inc.
When thinking about how to offer personalization to convenience store customers, there are four standout opportunities that c-store operators should consider in regards to how to get a message to a customer, according to Penumarthy. These opportunities are:
- On the Road or Highway — If you know a person is near a location, they can be targeted with an offer to stop into a nearby store.
- At Home in the Morning — When someone is at home and thinking about where to go for their morning coffee, a targeted offer could prompt a visit.
- On the Way Home from Work — Send a deal for dinner, such as a coupon for a pizza, when you know customers are ending their day.
- On Location — If you know someone is at the pump, notify them to come in for a bag of chips, a coffee, or a sandwich.
In today's online world, it's easy for a company to see previous purchases, abandoned carts, and even items of interest viewed on a website. This allows personalized communication to the customer about suggested items of interest, coupons and even special offers based on their behavior. The goal of today's brick-and-mortar retailers is to translate this personalization to the store.
Thanks to technology, it's not only possible, but it's happening and working for those who are leveraging their in-house data from the point-of-sale, loyalty programs and apps.
Relevant offers and deals are what customers are responding to most.
"Our guests love seeing deals relevant to them and that make sense, and our redemption rates have been really strong since launching our rewards program in January 2020," said Art Sebastian, vice president of digital experiences at Casey's, based in Ankeny, Iowa, and operating more than 2,000 c-stores in 16 states. "From a business perspective, as they are redeeming deals, they are adding other items to their order, so the ticket sales are going up."
Where to Start
While the ultimate goal is to get down to the individual level, knowing and targeting each customer with relevant offers, this level of personalization takes time. As a result, most retailers are starting by segmenting customers by daypart or specific item purchases — like coffee, energy drinks, breakfast sandwiches, etc. — and creating a group of promotions for each segment.
"Break your customers down into segments and then send them different offers based on that, and see how it works," advised Penumarthy of Punchh. "Understand which segments are important for your customer, target the offers, and then look at what percentage of customers that received the offer actually came in and made a purchase."
Casey's intends to get down to a personal, one-on-one level, but right now is focused on "recency and frequency," and segmenting people into slots such as the last time they came into the store, how often they come in, how many channels they shop (fuel only, online only, in-store only), and best guests in terms of dollars spent (online ordering, in-store and gas).
At Pilot Co., operator of 550 travel centers across 44 states, one of the ways the company segments its customers is by region, and the offers are exclusively available through the retailer’s loyalty program via a mobile app. All offers are delivered to members on the app, and some of the offers might unlock utilities for the professional driver audience, so it's more than just products, explained Steven Root, senior manager of loyalty at Pilot Co.
"It's about how do you get to know your guests better and leverage your loyalty program to give them a personalized experience," he said.