Diana Skakavac scrolls through her iPad in the kitchen of her grandparents' home in Toronto on Wednesday, Feb.21, 2023. Skakavac is behind the @havecouponswilltravel Instagram account. THE CANADIAN PRESS/Chris Young
Toronto - Diana Skakavac often searches grocery store loyalty apps for customized deals, especially for Tide laundry powder, a staple for her grandmother. Despite her frequent purchases, she rarely finds offers for Tide, prompting amusement and frustration.
The mystery behind grocer loyalty programs involves a complex process of data analysis and decision-making. According to Grant Packard, a marketing professor at York University, the technology powering these apps learns from shopping behaviors, considering factors beyond just supermarket choices, such as price sensitivity and life changes like moving or expecting a baby.
While technology gathers data, humans still influence the offers shoppers receive. Companies prioritize offers based on shopping frequency, spending habits, and willingness to try new products. These promotions often help grocers manage inventory and promote house brands.
For Skakavac, instead of Tide, she occasionally receives offers for No Name laundry detergent. Manufacturers sometimes partner with grocers for promotions, while chains use these programs to boost their own labels.
The number of offers varies, with Loblaw and Metro offering six to ten weekly per customer. For Loblaw's PC Optimum program, the goal is customer retention by rewarding purchases and tailoring offers to individual preferences.
Even skipped offers provide insights, helping grocers understand customers' dietary preferences and shopping habits. However, these educated guesses aren't always accurate. Skakavac once received denture promotions, an odd match for her shopping habits.
Looking ahead, personalization might extend to pricing and communication strategies. Retailers could tailor emails and promotions based on when and how customers shop. Online grocers might mimic airlines by adjusting prices based on demand.
Despite concerns about privacy, consumers can still exercise loyalty by choosing which programs to join or switching between them based on value. Packard suggests that as long as consumers feel empowered, personalized loyalty programs remain beneficial.
