July 26, 2022
Ad Tech

5 Benefits of Digital Transformation for Grocery Retailers

Henry Kim

Brick-and-mortar grocers across the country are waking up to the retail industry’s latest buzzword: digital transformation. Though grocery is one of the last sectors to adapt to the digital revolution, the accelerating demand for flexibility and convenience amidst evolving consumer behavior has become impossible to ignore. Today’s grocery retailers must embrace the world of digital retail media if they want to deliver value to customers and remain competitive.

What Is Digital Transformation — and Why Should Grocers Change Now?

Thanks to a phenomenon known as the “Amazon Effect,” consumers have grown accustomed to a seamless and convenient retail experience that integrates both online and in-person shopping. As tools and technologies have expanded, so have shopper expectations, raising the bar for customer experience across every retail sector.

By definition, digital transformation in grocery represents a paradigm shift from a traditional approach—that relied solely on a brick-and-mortar store—to a digital or “omnichannel” ecosystem that leverages technology to streamline the retail experience and offer shoppers the best of both worlds.

“Digital transformation” for modern brick-and-mortar grocers can play out in a number of ways. They might create digital loyalty programs that offer digitized circulars and coupons instead of paper. They may create mobile apps with advanced features like saved shopping lists, rewards programs, or self-checkout. Or they may opt for all of the above.

Brick-and-mortar grocers are also taking advantage of digital retail media solutions and ownership of their retail media program to capture their share of the $100B market. Not only does this allow them to leverage and personalize the relationship—and subsequent data—they are building with their customers, but it offers additional revenue that results from CPG partners paying to advertise through a supermarket’s mobile app and online website.  

5 Reasons to Embrace Digital Transformation

While the leap into the digital technology space may seem daunting to traditional grocers, it doesn’t have to be. When planned correctly—and executed by the right technology partners—the benefits can be monumental to every aspect of your business, strengthening customer loyalty, brand relationships and your bottom line.

Ready to hear more? Let’s break down the top five benefits you can expect when you adopt your digital transformation strategy:

1. First-Party Data Is a Win-Win

Today, privacy regulation laws are in the spotlight and companies like Apple and Google will be phasing out third-party cookies by 2023 to help protect user information. This change means advertisers will be looking for first-party data — collected by retail media networks and at the cash register — as sources of truth to inform their marketing campaigns. Retailers can use the data they collect to personalize communications with their customers, and to monetize their biggest asset: a loyal consumer base that is primed and ready to purchase.

Meanwhile, retailers have a competitive advantage when they retain direct ownership of this data, which can be used to create revenue from CPG partnerships or to create tailored campaigns that result in increased engagement and revenue, better positioning them for the future.

2. Personalization Is the Key to a Better Shopping Experience

Consumers want to feel seen, understood and catered to with product recommendations that are relevant to their life and interests. Retail loyalty programs that focus on personalization appeal to consumers—and the numbers don’t lie. According to McKinsey surveys, 80% of customers want personalization from retailers—and they’re willing to exchange personal data in order to receive relevant offers that match their interests and keep their budgets in line. What’s more, a whopping 90% of consumers say that the amount of money they spend is determined by how well the retailer provides personalization.

3. Digital Connections Help Create Lifetime Customer Loyalty

An integrated digital experience creates the best of both worlds where consumers can enjoy a high-quality shopping experience both online and in-store. Equipped with a digital ecosystem, retailers can also enjoy the benefits of customer loyalty. Retail giants like Amazon and Kroger understand the benefits of digital retail media very well–and have proven that customer loyalty and digital optimization are the consummate power couple for growing profits. As it stands, loyalty program membership continues to rise year after year, with 3.3 billion loyalty memberships in the U.S. currently. The gain for retailers is clear: loyalty program members spend 66% more than non-members.

4. Omnichannel Shopping Increases Basket Size and Lifetime Customer Revenue

McKinsey analysts call omnichannel capabilities a baseline “requirement for [retail] survival,” though 41% of retailers lag behind in their optimization efforts. Even so, 80 of the 100 top-scoring retailers have enabled a seamless connection between customer logins and profiles from app to website. These retailers not only increase online purchases, but also drive in-store revenue through greater purchase frequency, bigger basket sizes, and higher lifetime customer values.

Equipped with custom grocery retail tools, retailers can offer personalized discounts that cement customer loyalty in a mutually beneficial way. By establishing a personal connection with shoppers, retailers help drive repeat purchases and long-term customer loyalty. The proof is in the platform: retailers using a Swiftly-powered digital tools and solutions have seen 1 billion coupons clipped, a 40% increase in basket size, 40% more trips to the store, and a 10% increase in store sales.

5. Retailers Who Invest in Digital Are the Ones Who Compete and Thrive

It can seem as though the challenges of today’s retail landscape are endless–from inflation to high gas prices, supply chain issues and third-party delivery services. How can brick-and-mortar grocers find their competitive edge and thrive? Retailers that successfully compete in today’s market understand how to digitally connect with their customers. With in-app retail technology like rich product descriptions, mobile shopping carts, and personalized reward offers, digital transformation connects in-store availability with shopper needs to drive your sustained growth and success.

Ready to Succeed with Swiftly?

The time to benefit from digital transformation is now. The use of digital technology in the shopping process continues to soar; the number of grocery mobile app sessions were up 70% and time spent engaging with grocers in-app increased 13% from Q1 2021 to 2022. What’s more, retail media networks had a banner year in 2021 and advertisers are estimated to spend $52.21 billion by 2023. It’s important to get a seat at the table in order to claim your fair share of this revenue.

To embrace digital transformation, you need the right partner.  Swiftly provides you the retail platform, mobile platform, retail media, insights and analytics in a simple out-of-the-box model to help you get started earning ROI quickly.

Contact us to learn more.

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