Case Study: Segment of One in Grocery Retail

Grocery retail is an excellent use case for n=1 personalization (aka. hyper-personalization, aka. Segment of One).

One omnichannel grocer we work with has more than 125 stores spread across 35 cities. They asked us to create a single customer view, and to implement n=1 messaging for better orchestration across app, web, SMS and email.

Their case illustrates the performance boost that’s still on the table for many grocery and dry goods brands, even after implementing technology that includes a loyalty program, an app, email and SMS, as well as initial segment-led marketing efforts (including RFM cohorts), as well as various predictive models.

One of the elements that was still missing at that point was AI-driven product recommendations, (rather than simply showing popular items or products based on browsing history). So, after quickly implementing the single customer view, we immediately rolled out an AI-driven website feature “Picked Just for You” which included new landing pages and product-page widgets. This effort achieved an incremental boost of 34% more product views and a 20% higher conversion rate on product suggestions.

Another capability that was still in the formative stages at that point was customer journey orchestration. So leveraging Segment of One methods, we created a complete suite of highly-personalized flows including sign-up-to-first-order, first-to-second order, second-to-third order, post purchase engagement, cross sell, reorder reminders, and many other lifecycle message types. From these efforts, the time from sign-up to first order was reduced from 7 days to 5 days, conversion from cart abandon improved by 30%, and cross-sell and repeat both improved by 10% vs. the previous messaging approach, which had only rudimentary personalization capabilities before that time.

Overall, these initiatives produced a 15% increase in customer lifetime value, resulting in 16x ROI.

A leading technology that enables all this is SOLUS.ai which was a first mover, and is currently a market leader in the AI-First category of customer engagement software. SOLUS acts as a system of intelligence that sits between users’ existing data sources and their existing engagement channels, generating individual customer-level nudges that combine recommendations, propensity scores and stacked models, rather than broad segments or static rules.

In general, the performance boost from smarter messaging in grocery and dry goods retail includes a 25-35% improvement in cross-category shopping and new product adoption, and a 12-18% increase in average basket size and average basket value – even for brands with very sophisticated technology in place already. Bottom line: Supermarkets can achieve 15 to 45x ROI (incremental revenue vs. cost of SOLUS), so the solution pays for itself in the first 30-60 days.

Brands that have adopted SOLUS range in size from 50,000 to over 100 million customers. In each case, SOLUS acts as the core intelligence system, driving all CRM and marketing efforts, enabled by downstream integrations to each brand’s preferred systems that orchestrate CRM, email, SMS, app, website and POS systems.

As we saw, one key use case for Segment of One in grocery retail is n=1 product recommendations, based on individual customer preferences and collaborative filtering methods, such as ‘those who bought also bought’ and customer-based insights. Another important use for n=1 is customer lifecycle management (automated always-on nudges from onboarding, to driving frequency, to cross-category selling, to churn prevention, and lapsed customer win-back). SOLUS is also frequently used to predict purchase patterns, including customers most likely to try new categories or products. And it’s used to recommend complementary products, drive basket size, and identify replenishment needs for frequently purchased products – replacing other methods that underperform at these tasks, as compared to Segment of One.

So if you’re responsible for sales or CRM in grocery or dry goods retail, then feel free to get in touch, and let’s do a test!

AI Master Group is a B2B channel partner for SOLUS. Full implementation takes one week.