THR

IVIN

G IN

TH

E AG

E O

F A

MA

ZON

GO

USI

NG

TH

HE

LATE

ST G

RO

CER

Y TE

CH

NO

LOG

Y TR

END

S TO

EN

GAG

E SH

OPP

ERS

AN

D B

UIL

D L

OYA

LTY

2

ContentsEngaging grocery shoppers through technology & psychology 3Amazon is all Go 5We've learned a lot from Amazon 7Why grocery stores are adding mobile & IoT to the shopping list 8Only Amazon was Amazon on Day One 11

The case for coupons 12Be more likable: the art of persuasion 14Surprise and delight is surprising & delightful 16Neuro(super)marketing: using personalization to make decisions easier 17Why discounts work ... and why they don’t 18Get started! 20

The Amazon Example

Getting inside grocery shoppers' heads

3

Engaging grocery shoppers through technology & psychology

Mobile-enabled and checkout free stores will revolutionize grocery shopping; moving bricks & mortar retail closer to the online experience by adding connectivity and removing friction. Want to remain relevant to increasingly connected consumers? Technology is inevitable.

Amazon may have blazed the trail with Amazon Go, but other companies have followed in its wake, and the tech is now faster, more affordable and more accessible. Connecting technology at all levels of maturity is very achievable. Not ready right now? The technology will become even more affordable, and even more acessible over the next few years.

In the meantime, there are lots of ways to create great experiences for your customers. First step: understanding how technology and psychology can work together to meet customer expectations...

4

Mobile & connected technology is increasingly being used in grocery to create more personalized and engaging customer experiences. What's more, customers expect this level of engagement, so if you’re not using technology to create customer experience magic, you're already on the back foot.

The future of grocery is connected, and technology is the great enabler - if you haven't started looking at it, now's the time.

Amazon is all GoApart from a handful of examples, technology in supermarkets has been low-key and largely functional: connected price tags mean staff don’t have to manually replace labels when new deals are released, and mobile loyalty cards mean a marginally slimmer wallet. Things that gently improve the customer experience but that (for the most part) haven’t made the world sit up and take notice.

Enter Amazon Go

Our collective imagination really went to town on Amazon’s ‘just walk out’ grocery concept. Not content to be the undisputed emperor of ecommerce, the brand has been rolling out brick & mortar stores and pop-up shops with relatively little fanfare for a while now. It’s also not entirely new to the grocery game, but Amazon Go cranked it up to eleven and introduced a completely connected, tech-driven, checkout-(and checkout operator) free grocery shopping experience. As expected, reaction ranged from “technology is awesome” to “we’re all doomed”.

We love people, actually

A recent study conducted for Salesforce found the majority of shoppers would rather deal with humans at the checkout, with 72% disagreeing that robots could replace store associates; and Verint reports that 83% of consumers it surveyed believe it’s important to have the option to talk to a human representative on the phone or in-store. UK chain Morrisons actually added staffed checkouts back into its stores when over 60% of customers were found to prefer them to self-checkouts.

When it comes to purchases, most shoppers stick with the tried and true: 65% check out with an associate at the register, vs 22% at a self-checkout and only 5% on a mobile device. While the numbers may be low now, Nielson reports 65% of global consumers are willing to use a self-checkout if it’s available, and 72% would use scan and shop technology.

The overall theme appears to be that consumers are receptive to new technology at the checkout, but they don’t want to lose the human element.

OK, so maybe if they’re not on the registers it’d be a good idea to keep store associates around in a supplemental capacity; as greeters, concierges and in-store entertainment, or as overseers, bag checkers and basically a last line of defense against unwitting or unscrupulous consumers out to bilk the system (apparently a major issue facing self-checkout stores; presumably something Amazon Go has solved for with its tracking technology).

Amazon Go brought futuristic grocery tech to shoppers’ attention: and it hasn’t gone away. Welcome to your reality.

5

6

Connected stores will only work for connected consumers

In order to accurately identify customers along with their shopping behavior, preferences, basket contents and billing information, the store will need access to a vast amount of individual data. And it will need to do some pretty heavy real-time lifting, so you’re not going to get away with simply logging into an app. We’re talking location trackers, cameras, voice and facial recognition in addition to the less literally in-your-face technology. While consumers are more accustomed now to giving over data in return for personalized offers, not everyone is comfortable with the level of tracking required to create Amazon Go’s level of invisible connectivity.

In the same Salesforce study, consumers were slightly opposed to sharing data for a better in-store experience, and far more strongly opposed to stores using location technology to identify them as they walk into store: 73% against vs 27% in favor. Some of this is unsurprisingly attributable to generational differences: as the buying power shifts to the always-connected younger generations, we'd expect to see the appetite for Amazon Go and its ilk increase.

Is it Go time for grocery?

So is this the future of grocery shopping? If you accept that one day everything will be automated and optimized and digitally enhanced, then probably, yes. But we have a long, long way to go before the Amazon Go experience is mainstream.

It’s still very early days for this style of store: Amazon has launched eight stores so far, and other brands are making moves in the space. We don’t know exactly what technology is being used to work the Amazon magic. Industry commentators have come up with a laundry list of possible tech including computer vision, sensors, machine learning, deep learning, real-time analytics, cameras, biometrics, artificial intelligence and RFID, but Amazon’s not letting us see behind the curtain just yet.

So we’re talking a comprehensive, radical re-imagining of the grocery store experience, and that's a good indicator that the majority of retailers won’t have the resources to make this their reality. Yet. While more and more brands are starting to explore it, the simple truth is an invisibly connected, mobile-and-connected-tech-centric grocery experience like Amazon Go is light years ahead of what most are doing, or are capable of right now.

10 years down the track though, when digital natives are the majority and connectivity is king? We might have witnessed the end of the checkout operator – though hopefully not the end of retail associates altogether.

Amazon plans to open up to 3,000 Amazon Go stores by 2021, which could generate up to $4.5 billion sales a year.

7

they want it. Want to compete head-on? It's going to take work.

Whether Amazon eats the world or not remains to be seen, but there’s no denying its influence on the industry.

Amazon is financially imposing, with a very lucrative services business apart from its retail arm. It is in a position to remain competitive without relying on high product margins, so competing directly with Amazon on price is probably not going to be the wisest move for smaller retailers (i.e., pretty much everyone).

Instead, it’s the Amazon-era expectations that offer the biggest opportunity for everyone else to shine. Create better experiences, give customers what they need, and if you’re in daily face-to-face contact with your customers, add the personal touch that Amazon isn’t exactly famous for.

These personalized retail experiences are now critical for engaging customers, and that, more than the technology, may just be Amazon’s lasting legacy.

Leaving aside the company’s undeniable resources, the thing Amazon is most famous for is disruption. Amazon’s e-commerce growth brought with it a fundamental change in retail expectations. Amazon led the way in ecommerce, and there’s a reason it’s still a poster child for the power of personalizing recommendations to online shoppers. It set the pace and had the competition – on and offline – scrabbling to catch up.

As a result we’re now seeing a new type of retail, where creating responsive customer journeys and delivering value to individuals is hugely important.

Retailers are building engagement, loyalty and customer relationships, not simply moving stock through constant sales and cut price promotions. Many retailers have embraced cognitive technology, advanced CRM, personalization and – yes – mobile marketing for improving customer experience in and out of stores.

For many others, Amazon’s example represents a scary new frontier of retail that they’re nowhere near equipped to explore.

Amazon is ubiquitous, and Amazon is unrivaled at giving customers what they want before they know

We've learned a lot from Amazon

8

Why grocery stores are adding mobile & IoT to the shopping listWhile the majority of respondents in a recent Nielson study labeled a trip to the grocery store an enjoyable experience - or a fun family day out – it’s probably not a stretch to say most grocery shoppers prioritize getting in, getting what they need and getting out. In this case, food retailers should be looking for ways to make shopping trips as painless as possible by personalizing experiences while helping customers to save money and time in-store.

Unsurprisingly given the unflagging popularity of smartphones and the rise of wearables, an increasing number of retailers are turning to mobile and connected tech to improve the in-store experience. While these developments haven’t entirely passed grocery stores and supermarkets by, it may seem at first glance that grocery brands have been a little hesitant to embrace technology. After all, sexy tech like VR and smart mirrors make headlines, but have limited utility in a food store.

We know online grocery shopping is growing in popularity, but the majority of purchases still happen in physical stores – so there’s massive opportunity to build a better grocery experience by introducing mobile and other technology.

Mobile and in-store tech including beacons, digital signage, price tickers and on-shelf displays

give brands access to huge amounts of data on customer activity during a grocery shop: tracking in-store movement, promotion exposure, tech interactions, app activity, purchases and more. This can then be used – in real time, naturally – to create a personalized customer experience that not only makes customers happy, but ultimately increases each individual’s value to the brand. Suggesting complimentary products, helping with aisle and promotion location, and automatically applying relevant offers all meet the top mobile requirements of grocery shoppers - saving time and saving money.

Grocery brands have approached connected technologies with various levels of enthusiasm – for some the prospect of investing in relatively new technology may seem daunting and difficult to justify. Others have identified the potential efficiencies and cost savings that come with automation, and still others have focused on streamlining the shopping experience, removing friction to boost customer loyalty and engagement. In short, some grocery retailers have started to do some rather exciting things with connected tech - which is a good move, because the majority of customers are receptive to it.

Check out some of these examples for inspiration.

9

China’s Alibaba, Suning, Auchan and JD.com (among others) continue to make waves with their mobile-first connected grocery plays. Technologies including facial recognition, RFID, bar and QR codes, pay and go, and Alipay and Wechat integration give customers access to a complete, connected ecosystem that’s expanding beyond retail: into messaging, ride shares, food and finances.

Autonomous vehicle delivery startup Udelv is using self-driving vans to deliver groceries direct from the store to customers. Currently operating in the Bay Area, the company will be rolling its service out through Oklahoma City next year, with the aim of delivering groceries to under-served markets. The vans, which currently also carry a backup ‘safety driver’, can hold around 700lb of items and make 40 deliveries before needing to recharge.

Woolworths Australia (again!) is using sensors throughout its supply chain to track fresh produce from source to sale. According to Woolworth’s GM of IT Service Operations, the company can track everything from how much rain a crop receives to how long it is refrigerated, how fast it is traveling and even “how bumpy the roads are”.

And in case you haven’t heard the term ‘farming as a service’ before. Infarm currently has connected farms in 58 locations throughout Europe and is installing its platform in Metro’s flagship Paris store. Infarm’s connected farms are modular, scalable and cloud-connected, so can be monitored and controlled centrally.

Swedish supermarket chain ICA AB and courier company Postnord AB’s trial system for unattended deliveries that relies on a smart door lock and smartphone app.

Cambridge Consultants’ connected shopping cart that uses Bluetooth sensors combined with in-store beacons to track store movement and location. Kroger’s IoT temperature monitoring system using water- and humidity-proof tags to manage cold storage - minimizing handling, waste and energy usage.

Coop Italia’s connected supermarket using Kinect sensors to detect and interact with shoppers as well as collecting and analyzing shopper data to identify purchase patterns and manage stock levels.

Ocado’s smart platform introduces efficiencies into both order fulfillment and delivery; using robots to coordinate and pick orders in minutes, and IoT sensors on its vans to track and optimize deliveries.

Trigo's seamless shopping experience is designed to eliminate logistical difficulties for retailers, while maintaining the brand's character. It uses a ceiling-based camera network and machine vision to identify items going into and out of carts.

10

Online grocery shopping is growing in popularity

But most grocery purchases are still made in stores

Shoppers are willing and able to use mobile & connected tech

Only Amazon was Amazon on Day One

OK so what if you’re not Amazon, or Alibaba, or even Kroger or Tesco? What if all of these cool examples are out of your reach and you’re still relying on coupons in the Sunday paper or on the back of receipts? How do you get there from here? Is it too late to try?

You’re already doing some marketing and customer engagement, which is based on some universal principles of psychology: you can't understand why customers buy without understanding how customers think.

So take your understanding of consumer psychology and add some tech. Mobile is a good place to start because your customers always have their phones with them. Tech helps you amplify your marketing, and gets you around the limitations of traditional, offline tactics. How? Let's take a look at that most traditional of all grocery marketing tools: the coupon.

11

12

The humble coupon has been given a bit of a makeover in the past few years. In much the same way mildly amusing photos are experiencing a renaissance as memes, coupons are coming back into fashion – with a bit of window dressing. Marketers are still sending customers discounts and add-ons, upgrades and freebies, but it’s all packaged a bit more elegantly. It’s a personalized offer. It’s targeted marketing. It’s contextual engagement.

But here’s what really matters: for all our fancy framing, consumers still dig coupons. Here’s why they work.

Coupons work because they make us feel good

Coupons aren’t part of the conversation everywhere, but in grocery they play a major role in securing repeat visits and building loyalty.

That consumers like saving money surprises no one. Given the choice between identical items at drastically different price points, most of us will choose the cheaper one and feel pretty good about scoring a bargain. But coupons have a special magic.

To start with: coupons make people happy, on a hormonal level. A study from Claremont University found that subjects who received a $10 coupon had 38% higher oxytocin level than subjects who didn’t. They were generally happier, more relaxed and less anxious; apparently more so than if they’d received an actual gift. Want to make people fall in love with your brand? Coupons!

We feel good when we save money, but even better when we feel responsible for it. Coupons have a more marked effect than just buying something on special because we’ve gone to the effort of finding and redeeming the coupon to get the saving. And that positive feeling is even stronger when we think we’ve received something that’s somehow special – an offer nobody else received.

85%OF AMERICANS USE COUPONS

97%OF CONSUMERS LOOK FOR DEALS WHEN THEY SHOP

76%FELT THAT RECEIVING PERSONALIZED DISCOUNT OFFERS BASED ON THEIR PURCHASE HISTORY IS IMPORTANT

The case for coupons

13

60%ARE INFLUENCED BY COUPONS FOR GROCERY PURCHASES

56%SAY MOBILE COUPONS IS THE LEADING BENEFIT SMARTPHONES PROVIDE

79%LOOK FOR DEALS IN LOYALTY AND REWARD PROGRAMS BEFORE MAKING A PURCHASE

82%OF CONSUMERS WHO RELY ON DIGITAL COUPONS WHILE SHOPPING REDEEM THE OFFER WITHIN A WEEK

82%PREFER DISCOUNTS AND OFFERS WHEN IT COMES TO LOYALTY PROGRAMS

94%RISE IN DIGITAL COUPON REDEMPTION BY2022; 80% ON MOBILE

93%CONSIDER PROMOTIONS AS AN INFLUENTIAL REASON FOR SIGNING UP TO LOYALTY PROGRAMS

78%MOBILE GROCERY SHOPPERS SAY THEIR NUMBER ONE GOAL FOR MOBILE COUPONS IS TO SAVE AS MUCH MONEY AS POSSIBLE

54%OF US GROCERS HAD BRAND APPS IN 2018

69%OF GROCERY STORES HAVE A LOYALTY PROGRAM

72%OF US GROCERY BUYERS INTERACT WITH RETAILERS IN SOME DIGITAL FORM

50%INTERACT VIA A DIGITAL REWARDS CARD OR ACCOUNT

Regular coupon redeemers may get so hooked on this buzz that they continue to use coupons and redeem offers even if they’re paying more than the regular price. The act of couponing becomes more rewarding than actually saving money.

Yes, there’s more to it, but coupons have a place in verticals where purchases are frequent, and customers are price sensitive. If you can somehow make the shopping experience less of a chore and more magical and memorable, you’re going to build more engagement. You have to do it properly though.

Personalize offers based on past purchases, at a minimum

People like receiving offers based on what they’ve bought before: 76% feel personalizing discounts based on purchase history is important. You might have other data (demographics, location, weather) you can use to make marketing really personalized, but the important thing is that you make offers relevant. You want people to redeem their offers and feel good – and that’s more likely to happen if you show them that you know them. Then you can focus on ensuring repeat visits and building loyalty.

14

Retailers know coupons are a tried and true way of engaging consumers: 92% of shoppers have used coupons, and almost 90% say coupons influence both their choices and decision to try new products.

In grocery specifically, 60% of shoppers are influenced to make a purchase by coupons, and almost 70% decide where to shop based on whether they can use paperless discounts on their phone or loyalty card.

So while many grocery brands are sticking to the tried and true and continuing to print coupons in circulars or on the back of paper receipts, there’s no denying digital is on the rise: 31 billion digital coupons are expected to be redeemed by the end of 2019.

Going digital also means it’s easier to use your knowledge of buyer behavior and shoppers’ specific data to connect with them on more levels than is possible through a piece of paper. How? A little psychology goes a long way! Use these six persuasion techniques when engaging your customers, and get more shoppers into store, more often.

6 ways to use persuasion in your marketing

Reciprocity: if you want shoppers to get your app and start redeeming coupons, give them something up front. Send them a high value welcome coupon, surprise gift, or bonus points the first time they log in to your app. It’s the same principle that drives Costco’s amazingly successful free sample strategy: give shoppers something and they’re more likely to make a purchase.

Scarcity: coupons can be pitched as strictly limited, only available at this store, only available on this day, or exclusive to the recipient. Craft your coupons to create a sense of urgency and you’ll give customers that all-important dopamine hit when they redeem. And this strategy works: customers overwhelmingly prefer to receive a one-time-only high value coupon to a lower value coupon they can use over again.

60%OF GROCERY SHOPPERS INFLUENCED TO MAKE A PURCHASE BY COUPONS

40%GROCERY SHOPPERS LOAD E-COUPONS ON TO A LOYALTY CARD BEFORE SHOPPING

70%DECIDE WHERE TO SHOP BASED ON WHETHER THEY CAN USE PAPERLESS COUPONS ON THEIR PHONE OR CARD

Be more likable: the art of persuasion

15

Authority: Credibility goes a long way. Have you been in the grocery business longer than the competition? Do you have a better understanding of what customers want, so you can give them promotions they really care about? Is your app used by 156 million people, meaning you have better data and more smarts at your disposal? Be sure to tell people that when you’re marketing your loyalty program.

Consistency: If someone redeems a coupon, they’re likely to do it again – and the more they do it, the more likely they are to continue doing it. What does that mean for you? Personalize your promotions: give people every reason to use that first coupon, and make sure you use that data to refine your marketing and stay relevant, encouraging further redemptions and more store visits.

Liking: people are more likely to do something if asked by people (and brands) they like. So be likable. Be personable. Get to know your customers and give them what they want. Discover and communicate the things you have in common with your customers so they relate to your brand better.

Another way to build likability with mobile is to avoid making your marketing all about the transaction. Can you give your customers additional utility? In an app that may be calendars, calculators, loyalty point trackers, shopping lists, order updates, store locators etc. Helping people makes your brand more likable, and that makes your coupons easier to say ‘yes’ to.

Consensus: demonstrating that people are using your app, redeeming coupons and getting value, is a really good way to encourage even more people to use it. Consider:

• Show how many shoppers use your app, how many coupons are available and how many coupons people are redeeming

• Make recommendations. Show people what ‘customers like you’ or ‘customers who like what you like’ are buying, and which deals are popular.

• If you have positive reviews and testimonials, make sure they’re front and center on your site, in your store and linked from your app.

Trust us, we know what we’re doing

Grocers know that coupons work; we know that digital coupons work better. Not only does digital allow for more personalization, it makes it easier for you to use some basic principles of buyer behavior to encourage engagement and redemption.

91%OF SHOPPERS WHO REDEEM A COUPON SAY THEY’D VISIT THE SAME RETAILER AGAIN

48%OF CUSTOMERS ARE MOTIVATED TO RETURN TO STORE BY BUYING AN ADVERTISED PROMOTION

16

Why does surprise and delight work so well?

Researchers at Emory University explored the effects of surprise on the brain under MRI and found a much stronger response to unexpected pleasure than to something the subjects knew was going to happen. In a nutshell: if you know something nice is coming your way, your brain releases dopamine, which makes you feel good. Free candy bars at the checkout? Yes please! But more dopamine is released when you experience something unexpected and nice, and that’s why surprise and delight rewards are so surprising and delightful, and generate such a positive response: unexpected free candy bars? Amazing!

Personalization is key; this isn’t one size fits all marketing

Key to surprise and delight campaigns is personalizing experiences and rewards to the recipients, which is easy if you’re collecting information - transactional, social and contextual data via devices - or if you ask people directly what suits them best. There are a couple of caveats however:

If your previously surprising delights become routine, they’ll no longer have the influence they once did; free candy bars for everyone everyday is business as usual, not note- or share-worthy. Worse still, if people have been conditioned to receiving free candy and the shelves are suddenly empty, dopamine falls and sadness ensues.

Likewise, if you approach this exercise as a cynical marketer, it’s not going to work. A surprise and delight strategy - whether a major campaign or mobile loyalty rewards - needs to be delightful, honest and authentic; showing genuine customer appreciation. The general public is even more cynical than marketers, and half-hearted attempts to do nice things for fame are just asking for social skewering.

Surprise and delight is surprising & delightful

Neuro(super)marketing: using personalization to make decisions easierGrocery stores are famous for giving shoppers a huge range of products to choose from, which works in the store’s favor for the most part. Neuromarketing research shows people tend to shop rationally for about 23 minutes before emotions start taking over; after 40 minutes shoppers will stop being rational altogether and start piling in the junk food. So stores work on the assumption that more choice there is, the longer people will spend in store, and the more likely they’re going to start shopping without thinking too hard about what they’re buying.

But we also know that if people are presented with too many choices, they're likely to get completely overwhelmed and switch to autopilot. When grocery shopping they might just buy what they know and leave without thinking too hard about the rest of the products on offer. This obviously isn’t ideal if your store is hoping to grow transaction size or visit frequency: you want people to branch out and try new things, not stick with the tried and true.

This is where tech comes into its own: it helps you circumvent the limitations of traditional marketing. Make even a short visit rewarding for your shoppers, and you won't need to keep them in store for 40 minutes.

Unlimited choices aren’t necessarily a good thing: you need to find the sweet spot

Having to evaluate too many alternatives can cause stress, mental overload, indecision and analysis paralysis: there’s too much thinking required, so I’m just going to do nothing. On the other hand, not having enough choices can invoke FOMO: I know there’s a deal to be had, so why am I not seeing it?

Personalizing marketing messages, offers and promotions reduces the need to make decisions: about what to buy, when to buy, even whether to shop around for better deals or not. Use offers to encourage shoppers to try new things by incentivizing items that are related to (but different from!) the things they usually add to their baskets. Instead of expecting them to choose from an entire aisle of sauces, use your data to find the one hot sauce they’re most likely to want to try, and send a compelling offer to their phone when they’re next in store.

The benefit? Sure, you sell the hot sauce. But you may also create a new buying behavior as the shopper continues to add hot sauce to their cart even at full price. And beyond securing the sale: if shoppers feel like you know them personally, they’re going to like your brand a whole lot more...

Neuromarketing is the application of neuroscience to marketing. Neuromarketing includes the direct use of brain imaging, scanning, or other brain activity measurement technology to measure a subject’s response to specific products, packaging, advertising, or other marketing elements. In some cases, the brain responses measured by these techniques may not be consciously perceived by the subject; hence, this data may be more revealing than self-reporting on surveys, in focus groups, etc.neurosciencemarketing.com

17

18

Why discounts work ... and why they don’t

Discounts work largely because of FOMO. People don’t want to miss out on savings or free things, so they come in and redeem their coupon and get their discount before it expires. If those coupons are valid for a limited time only, or for an exclusive product, then the sense of urgency is heightened and the motivational effect is stronger. However, while discounts are a great way to attract new or undecided customers, discounting alone isn’t usually enough to build strong and lasting relationships with customers...

19

EXIT80%FEEL ENCOURAGED TO MAKE A FIRST-TIME PURCHASE WITH A BRAND IF THEY HAVE AN OFFER OR DISCOUNT

52%OF MILLENNIALS WILL SWITCH RETAILERS

FOR DISCOUNTS OF 15% OR MORE

76%WILL WAIT FOR A SALE OR SEARCH FOR

A COUPON IF AN ITEM ISN'T ON SALE

75%OF COMPANIES SACRIFICE MARGINS FOR DISCOUNTS

67%MAKE AN UNPLANNED PURCHASE BASED ON FINDING A COUPON OR DISCOUNT

54%SHOPPERS EXPECT A PERSONALIZED DISCOUNT IN RETURN FOR SHARING THEIR INFORMATION

Discounts are a good way to encourage people to try something new. If they’re unsure (there's no consistency or consensus), a discount can tip them towards purchase.

An over-reliance on discounts can encourage bargain hunters - shoppers

loyal to the discount, not your brand.

Discounting trains people to expect discounts; will they keep shopping without one?

Discounting makes price the key differentiator. But if everyone’s in a race to the bottom it makes more

sense to focus on service, quality, experience, exclusivity or other non-price elements.

If people want to pay full price, let them. Discounts can cannibalize existing business and erode margins.

Discounting can lower perceived value, which means it’s not a good fit for high-end products.

Discounts don’t work well if they’re for something shoppers have no interest in buying. It won’t meet their expectations of personalization, and doesn’t make them feel like you know them.

Discounts encourage shoppers to come in more often, or buy more than they’d planned to.

Personalized discounts can be used to build loyalty: give your best customers free shipping, Buy One Get One Free, or exclusive deals to show them you value their ongoing business.

Discounts use scarcity to create a sense of urgency: if shoppers have to move quickly they won’t look for other prices or better offers.

Discounts discourage cart abandonment. If people have a potential saving (which will make them feel good), they’re more likely to go through with a purchase.

It doesn’t usually make sense to discount your best-selling items; people are going to buy them anyway. But discounts can help move excess, slow-moving or out of season stock. Creating bundles of products is one way to discount without making price the focus.

Discounts can drive additional purchases, even of undiscounted items. If you give shoppers a coupon for $6 off a $20 spend, they’ll often add items up to $20 even if they only planned to spend $14 in the first place.

FOR YOU!

Discounts are a great way to attract customers; people move quickly when they sense savings, and discounts can make the decision to take a chance on an unknown brand a lot easier. But be sure you’re using discounting strategically, but don’t base 100% of your marketing on it. Price-based discounts might work well for customer acquisition and win-back, but may not be your best option for retention or growth. Try a more personalized approach to offers!

Get started!

Amazon has set the pace for retail technology and shaped shopper expectations, and that's good

news. Now's a great time to use your understanding of customer behavior to design an engagement strategy

that gradually introduces technology where it makes sense for your business. You might move your loyalty card to an app, connect beacons for in-store way-finding, or offer digital coupons as well as print.

Technology makes it easier to meet customer expectations of personalization and frictionless shopping, so adding tech

isn't a matter of 'if' but 'when'. Don’t be stuck with slow, reactive marketing while everyone else gets further

ahead. Still not sure how to get started?

Talk to Plexure!

20

21

https://www.businesswire.com/news/home/20180522005419/en/New-Research-Displaydata-Planet-Retail-RNG-Estimates

http://intelligence.valassis.com/rs/275-QRU-089/images/Coupon-Intelligence-Report.pdf

https://www.influenceatwork.com/principles-of-persuasion/

https://www.apnews.com/2d25352183624383ae898a384c0dce79

https://www.plexure.com/plexure-blog/2019/4/4/did-somebody-say-coupons

https://blog.hubspot.com/news-trends/customer-acquisition-study

https://www.businesswire.com/news/home/20180522005419/en/New-Research-Displaydata-Planet-Retail-RNG-Estimates

https://www.business.com/articles/improve-mobile-coupon-redemption-rates/

https://codebroker.com/resources/text-marketing-and-mobile-coupon-whitepaper/

https://www.theatlantic.com/business/archive/2014/10/the-psychology-behind-costcos-free-samples/380969/

http://www.creditcards.com/credit-card-news/card-linked-offers.php

https://www.prnewswire.com/news-releases/hawk-incentives-research-deal-seeking-on-the-rise-shoppers-report-these-behaviors-make-them-feel-smarter-300530557.html

https://www.colloquy.com/latest-news/the-importance-of-prioritizing-high-er-value-customers/

https://www.emarketer.com/content/grocery-apps-grow-in-importance

https://www.inmar.com/press-release/83-percent-of-shoppers-report-that-coupons-are-a-driver-for-changes-in-purchasing-behavior/

https://www.juniperresearch.com/press/press-releases/digital-coupon-redemptions-to-surpass-$90-billion

https://b2f402cad68db78c1f16-5cc9202f0035684ed1957f67d24e0a53.ssl.cf5.rackcdn.com/Whitepapers/Precima_PreparingfortheFutureofGroceryShopping_2018.pdf

https://blackhawknetwork.com/examining-brand-loyalty-impacts-engagement/

https://www.prnewswire.com/news-releases/hawk-incentives-research-deal-seeking-on-the-rise-shoppers-report-these-behaviors-make-them-feel-smarter-300530557.html

http://www.4-traders.com/news/HelloWorld-New-Loyalty-Report-Reveals-75-of-Consumers-Want-To-Be-Rewarded-Beyond-Purchase--25686011/

https://www.hybris.com/en/gmc55-the-global-2017-sap-hybris-consumer-insights-report

https://www.businesswire.com/news/home/20180213005987/en/Coupon-Redemption-Trend-Analysis-CPG-Marketers-Spreading

http://www.gfkmri.com/Products/TheSurveyoftheAmericanConsumer.aspx

https://salesxceleration.com/

discounting-is-bad-for-business

http://www.entrepreneur.com/article/220091

Further reading

22

https://www.entrepreneur.com/article/299028

https://www.economist.com/node/21557801 https://founderu.selz.com/the-psychology-behind-deals-and-discounts/

https://www.nickkolenda.com/psychological-pricing-strategies/

https://www.signiq.com/post/the-psychology-of-discounts

http://www.getelastic.com/coupon-infographic/

https://www.sheerid.com/study-reveals-businesses-willing-sacrifice-margin-gain-customer-loyalty/

https://www.prnewswire.com/news-releases/retailmenot-survey-deals-and-promotional-offers-drive-incremental-purchases-online-especially-among-millennial-buyers-300635775.html

https://www.neurosciencemarketing.com/blog/articles/heb.htm

https://nocamels.com/2018/09/trigo-vision-tech-checkout/

https://www.smh.com.au/business/companies/forget-checkouts-woolies-trials-first-just-walk-out-store-20180905-p501tg.html

https://venturebeat.com/2018/09/13 autonomous-vehicle-startup-udelv-inks-grocery-delivery-deal-in-oklahoma-city/

https://www.itnews.com.au/news/woolworths-reveals-large-scale-farm-to-fork-iot-project-493157

https://techcrunch.com/2018/11/08/infarm-paris/

http://www.wsj.com/articles/delivery-service-brings-groceries-to-your-fridge-when-youre-away-1464627114

https://gigaom.com/2015/02/11/grocery-shopping-might-be-less-painful-with-this-smart-cart/http://www.cio.com/article/2945732/cio100/the-internet-of-things-now-includes-the-grocery-stores-frozen-food-aisle.html

http://www.technologyrecord.com/Article/coop-italia-showcases-supermarket-of-the-future-at-envision-54233#.WEYX8X2riVs

http://www.ocadotechnology.com/our-blog/articles/How-the-Internet-of-Things-is-changing-grocery-retail

http://www.usatoday.com/story/tech/news/2016/12/05/amazon-go-supermarket-no-checkout-no-cashiers-artificial-intelligence-sensors/94991612/

http://www.forbes.com/sites/rogeraitken/2016/09/01/will-amazons-internet-of-things-device-dash-uk-supermarket-fortunes/#6cc55bc56be1

https://csnews.com/analysts-amazon-go-stores-bring-50-more-revenue-typical-c-stores

23

plexure.com