The Promise & Peril of Retail Personalization

The Promise & Peril of Retail Personalization

Gary Hawkins, Founder, CEO, Advancing Retail


As we head into Groceryshop 2019 I am struck by the number of solution providers focused on providing marketing personalization. It is safe to say that retail personalization has arrived. And yet is also safe to say that far too few retailers truly understand what’s involved with providing effective personalization and how fast capabilities are moving in this space.

As supermarket retail has been dragged into the digital age, personalization has become a customer expectation, no longer a nice-to-have. And solution providers have come out of the woodwork to provide capabilities to retailers, each proclaiming the sophistication of their approach and the use of AI and machine learning. 

But here’s the problem: Like any engine, the quality of personalization is dependent on the fuel it’s running on… and too many retailers are providing poor quality fuel or, even worse, lack the fuel necessary.

As retail enters the Age of ‘i’ - a time of maximizing share-of-wallet and growing lifetime value of each individual customer - far too many retailers lack customer identified transaction data, the primary fuel. Looking at a list of the top 50 supermarket retailers, approximately half of them have little to no customer identified purchase data. 

Beyond that, personalization is driven by customer intelligence; the more known about the customer the better. Customer intelligence is driven by attributes, attributes tagged to the customer and to the products he or she purchases. Attributes can, and should, also include location and other information that can be brought in from outside data sources. Knowing what product a customer purchases is good, knowing that the product is sugar-free and gluten-free adds that much more insight to what that customer is searching for.

This is where retailers need to start to dig when evaluating different personalization capabilities. What, and how many, attributes are maintained and how they impact recommendations is key to relevancy. How those attributes are created and refreshed is also massively important. Batch cycles and customer segments are yesterday’s approach; look for automated creation of customer profile attributes and systems capable of calculating, maintaining, and ingesting hundreds and even thousands of attributes tagged to the individual shopper and products.

Anyone with customer identified purchase data and a spreadsheet can quickly identify products frequently purchased by a customer. It takes more sophistication to track each product’s purchase cadence for each individual customer. And even more sophistication to understand subtle changes in customer behavior. A handful of retailers realize that contextual relevancy in marketing is more powerful than straight personalization. And to provide contextual relevancy requires deep integration with digital touchpoints like mobile and awareness of location - all in realtime.

Retail marketing personalization presents the retailer with both promise and peril. Providing recommendations that are irrelevant, or simply wrong, to the shopper in today’s world holds great risk. In the digital world, irrelevant communications are spam, and a customer can easily delete your app or unsubscribe from your emails. But for those retailers who get it right, who understand the need for vast customer intelligence and realtime interaction, contextual relevancy can be massively powerful as retail competition quickly shifts to a stealth battle over each customer’s share-of-wallet and lifetime value.

About the Author

Gary Hawkins is the founder and CEO of the Center for Advancing Retail & Technology (CART) and leverages his unique knowledge and view to new technologies to shape the future of FMCG retail. Retail Mindsteps serves as Hawkins’ personal blog and repository of the myriad articles and papers written for industry publications where he distills the complexity of tech-fueled retail innovation into digestible and actionable insights. Hawkins is the author of three books including the latest, Retail in the Age of ‘i’, that explores the future of retail propelled by the exponential growth of technology. Hawkins is a regular guest lecturer at Georgetown University’s McDonough School of Business in addition to keynoting retail conferences in the US and abroad. He can be reached at

CART Registered Due Diligence:

First level due diligence ensuring the solution is valid and viable.