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Personalised ranging

Overview of personalised ranging by Australian grocery retailers and suppliers


Technology has changed how shoppers behave and also their expectations. As outlined by Jim Blasingame, in his book The Age of the Customer, customers now control the relationship with sellers and they also control the product information. To deal with this change John Hall, in his book Top of Mind, suggests marketing needs to move from “Me Marketing” to “You Marketing”.  As John Hall explained in a Forbes article:

Instead of only considering their brand, their product, and their pitch, businesses are building trust with audiences by taking a more customer-centric approach – essentially shifting their messages from being all about them to being all about the audience.”

The Australian grocery industry understands that technology has changed shopping behaviours. The industry is also aware of the increasing power and knowledge of consumers. For example, consumers now expect personalised offers. US research by Segment, The 2017 State of Personalization Report, highlighted that 71% of shoppers express some level of frustration when the shopping experience is impersonal. Segment describes the actual experience being less than the shoppers expectation as ‘the personalization gap’. Other research, as reported by Intelliverse, highlights that

“86% of consumers indicate personalisation plays a significant role in their purchasing decisions.”

Why are there limited personalised ranges in Australian supermarkets?

So why has the Australian grocery industry had limited success in creating personalised ranges? A major issue is that personalised ranges / store specific ranging etc increase the costs of doing business. The second issue is that many grocery retailers and suppliers are yet to embrace technology to truly understand and connect with grocery shoppers in Australia.

With hard discounters, e.g. Aldi and Lidl, growing share with a limited range of top selling SKUs many other retailers have also simplified their ranges. Research by Nielsen, Grocery Universe 2017, highlighted that hard discounters have increased their market share in Europe from 9.7% in 1991 to 20.9% in 2015. In Australia, Roy Morgan research estimates that Aldi has grown its market share to 12.1% for the 12 months ending December 2017. Some may suggest consumers switching to hard discounters is due to the GFC (global financial crisis) changing consumers shopping behaviours, i.e. more price sensitive. The GFC finished in 2008 so that point is debateable. Another explanation, as highlighted by research by Daymon (March 2017), is that consumers now expect more:  

“they want it all: fresher, cheaper and easier. While food retailers have always competed on those aspects to some degree, it’s the combination of them that seems to resonate with consumers today.

These higher expectations are driven by an intersection of broad consumer lifestyle trends toward wellness, customization and convenience”

So, consumers are switching to hard discounters probably due to those retailers offering a fresher, cheaper and easier CX (customer experience). In Australia Canstar Blue research (Supermarket Satisfaction Ratings 2018) awarded Aldi the best supermarket for overall customer satisfaction. This was the fourth time, in 5 years, that Aldi had achieved this result. This result highlights that Aldi Australia understands their customers’ expectations and importantly is meeting them. Interestingly Aldi received 4 stars for ‘freshness of fruit, vegetables and meat’ vs Coles 4 stars and Woolworths 3 stars. Personally, I believe the success of hard discounters is due to more than shoppers’ perception that they are cheaper than full service supermarkets.  

Logically with the success of hard discounters, such as Aldi in Australia, with limited ranges, retailers have been hesitant to offer complicated and costly personalised ranges. Subsequently many suppliers have not developed personalised ranges as they will struggle to secure ranging with the major supermarkets.

The second issue limiting personalised ranging is retailers and suppliers not embracing technology to truly understand and connect with shoppers. Firstly, shoppers are using technology (internet, mobile phones etc) more when shopping today. As reported by Retail Dive in June 2017:

nearly 60% of shoppers look up production information and prices while using their mobile phones in stores”

Some statistics from Australia Post (Inside Australian Online Shopping 2018) highlighting Australian shoppers growing use of e-commerce in 2017 include

Marketplaces, e.g. eBay, and discount department stores were the favourite destination sites for online shoppers

Online sales reached 8% of traditional retail sales

Australians spent $21.3B buying goods online, +18.7%.

So, with shoppers using technology (internet, mobile phones) to increasingly order products and services online Australian grocery retailers should have a significant % of total sales online. According to Nielsen research (Connected Connectivity Is Enabling Lifestyle Evolution, November 2018) Australia currently has 3.1% of FMCG sales online. In comparison, China has 18% of FMCG sales online and South Korea 20% of FMCG sales online.

“The path of e-commerce growth in South Korea was similar to what we are seeing in many markets today. Initially there was high penetration in travel and fashion, but as consumers became more familiar and confident, and retail offerings improved, they ventured into beauty, infant products and groceries, and then into areas that many thought wouldn’t succeed in e-commerce, such as fresh produce. Today South Korean online FMCG sales account for 20% compared to 6 – 7% globally – the transformation and opportunities are clearly evident.”

Ji Hyuk Park – E – Commerce Leader, Nielsen Korea

This research highlights Australian grocery retailers are not embracing technology to connect and understand with their customers. If they had embraced technology they would have an acceptable CX (customer experience) online. In other markets, e.g. China and South Korea, grocery retailers have embraced technology and therefore have a greater % of sales online.

For comparison, according to Business Insider (August 2018), 63.9% of Dominos’ pizza orders were online during the 2018 financial year. Personally, I believe Dominos’ has embraced technology to connect and understand their customers. Dominos’ has then used this customer understanding to create an acceptable online CX (customer experience).

Other research suggesting retailers are not offering an acceptable CX (customer experience) online, as reported in Retail World (February 2019), is IBISWorld research:

“Consumers’ trust in online grocery shopping has taken time to develop. Australian consumers have demonstrated a desire to check the quality of food items before a purchase, particularly for fresh produce. Consumers typically only shop online for low-value and bulky groceries.”

This research again highlights Australian retailers have not embraced technology to truly understand and connect with their customers, especially in fresh food.

International research has highlighted similar issues in other markets. For example, the online store of the future report (May 2018), completed by IGD highlighted that the grocery industry:

“with over half (54%) of food and grocery businesses only just starting to prepare for tomorrow’s digital transformation and 11% yet to begin”

This research, by IGD, was based on a survey of 223 senior industry members across 42 different markets. The research also predicted the online store of the future will:

“be a shopper’s personal micro store offering individualised and online-exclusive products, personalised promotions, recommendations, advertising and loyalty schemes. 69% of respondents believe some retailers will apply personalised pricing and promotions in future. An additional 77% think almost all digital communication to consumers by retailers will be personal.”

Importantly e-commerce offers retailers the opportunity to create personal relationships with their customers. Technology is used to capture and analyse useful information, such as past purchases, to make personalised recommendations / offers. As Shabana Arora eloquently explains:

“Get the data right and you can shape the overall customer experience by applying data science and machine learning.”

Personally, I believe Amazon has been a leader in embracing technology to offer a personalised experience to their shoppers.

How can retailers and suppliers develop personalised ranges?

“Today’s immediate-gratification consumers want to feel valued and recognized as an individual. In a world where consumers realize that their personal data has value, firms need to understand what information customers want to share and how they want to be engaged.”

Julio Hernandez, lead for KPMG’s global Customer Center of Excellence and U.S. Customer Advisory.


To develop personalised ranges retailers and suppliers need to embrace technology. Technology is key to collecting data / insights to understand who your customer is and what they want. Historically access to technology was limited due to costs. Today the costs of technology have decreased. Amazon is even offering their software, Amazon Personalize, for businesses to use.

Research by Rich Relevance, The Challenges and Opportunities for Online Grocery Shopping, also highlights that online grocery shoppers expect personalisation. The respondents recommended online grocery sites have features such as:

frequently bought items

relevant alternatives when an item is unavailable

recommendations based on known dietary requirements and preferences  

recipe ideas based on what items are in their basket

Loyalty Cards

Major supermarkets, such as Coles and Woolworths, offer loyalty cards to customers. Importantly members having individual accounts that allows businesses to build personal relationships with that individual.

Loyalty card data is already analysed to create personalised marketing messages / offers. For example, if you regularly buy Tim Tams and they are on special this week, a personalised email highlighting this offer will be sent. This technology can be developed further to highlight relevant and / or new products to customers. For example, if a customer opts in to list a dietary requirement of “no sugar” then when new “no sugar” products are ranged in their local store they can be informed. Also, post purchase, recipe ideas could be sent, based on items they purchased.  

This technology can also be used to create personalised ranges (store specific ranging) to meet local customers demands. Shoppers can be grouped by store and their purchases analysed to better understand who is buying what in store. Unlike scan data (units, price etc) loyalty card data (and other panel data) offers greater insight into who exactly is purchasing what items.


Retailers and suppliers could also develop apps to build relationships with their customers. As reported by Progressive Grocer (July 2018) Kroger (US supermarket) launched a nutrition app to help their customers maintain a healthy lifestyle. This app makes personalised recommendations. Suppliers could also develop apps to create relationships with their customers. This data could then be analysed to make personalised recommendations. For more information, Progressive Grocer (August 2017) has research explaining why shoppers use apps.

Other technology

In addition to apps, websites and social media offer retailers and suppliers the opportunity to engage with customers. By allowing individuals to join groups / forums / newsletters etc online businesses can create an online community to better understand their customers. By analysing customers posts / comments businesses are developing insights into what their customers’ expectations are. By responding to customers posts / comments businesses could offer a personalised range for that customer.

A possible issue with websites and social media is that it can become very expensive / time consuming dealing with numerous customers posts / comments. I suggest my clients consider using FAQ (frequently asked questions) pages and bots to answer general queries. You may also wish to invest in a social listening tool to analyse what is being said online. Blog about social listening tools.

Simply put your customers are using technology more today when shopping, so you have to use technology to engage with them, understand them and then use these insights to offer personalised ranges for them.

As outlined in an Inside FMCG article (February 2019), Supernova has embraced technology to create global brands. For example their NPD process is:

“Our target market (gen-now) are an engaged bunch, and we use that to our advantage. We like to include our customers in the entire product development process. We don’t believe in prototypes, instead our designers will mock up a concept and we’ll put it to the ‘panel’ through Instagram. If the responses are positive, we know we’ve hit the nail on the head, and will move forward, acknowledging and taking on all feedback,”

Supernova CEO and co-founder, Emily Hamilton

B2C (business to consumer) Business Model

Grocery suppliers may wish to use a B2C (business to consumer) business model to build personalised ranges for their customers. This business model allows manufacturers to engage directly with their customers and importantly capture data, such as purchase history, that is required to better understand your customers. This data can then be analysed to make recommendations and create personalised ranges for your customers.

Changes in technology, supply chains and how grocery shoppers shop have created an opportunity for grocery manufacturers to develop a B2C model. My recent blog post, Grocery manufacturers should consider an online B2C (business to consumer) model to increase sales, provides more details.

Nespresso is an example of a grocery manufacturer that has created a B2C model.

The Nespresso concept was originally created by Luiggi Bezzera. In 1986, Nespresso became part of Nestle. Importantly in 1998, Nespresso offered “an enhanced internet site enables direct on-line ordering, free shipping of minimum capsule orders, and expanded promotions of products” (Nespresso). Nespresso had created an online B2C model, when less than 1% of the worlds’ population used the internet (internet world stats). Today, Nespresso (stand alone part of Nestle) employs 13,500 people worldwide, has over 6.5 million Facebook fans and 440,000 unique customers visit their online boutique everyday (Nespresso).

Subscription model

A subscription business model is simply when a customer pays a recurring price at regular intervals for a product or service. A subscription model is similar to a B2C model as users create individual accounts. The data from these accounts can then be analysed to create personalised recommendations.

This model is already used by retailers throughout the world. For example, Amazon American customers can receive discount grocery items by joining ‘subscribe and save’ program. In this program customer choose what items they want delivered, how often and then Amazon will automatically send the goods. The customer will receive a discount (up to 20%) on the items they subscribe to. According to reports from Inside Retail, December 2018, Amazon Australia is planning on offering a similar program in Australia.

Some grocery manufacturers already use a subscription service. For example, Graze uses a subscription model for its healthy snacks range. US and UK customers can subscribe to receive a box of healthy snacks delivered to their office or home. The customer can personalise their box of snacks to their tastes. Larger brands, such as Gillette, also offer a subscription service. According to an Inside FMCG article, January 2019, major grocery manufacturers (Nestle, P&G, Unilever) are planning on increasing the number of subscription services they offer in the future.

Personalised in store ‘pick and mix’

For some categories, e.g. fresh nuts, consumers can already choose how much they purchase and which type / variety. This choice allows consumers to personalise their order. This same concept is now being applied to other categories to allow consumers to create their own personalised order. For example, as reported by Progressive Grocer, September 2018, Kroger is allowing consumers to scoop frozen seafood, at self service freezer cases, to create a steam-in-bag seafood meal. Meals are charged at a flat price ($7.99 per pound). This type of innovation is allowing customers to create personalised orders in store.

Online personalised orders

Online orders create an opportunity for retailers and suppliers to allow customers to personalise their order. Importantly the customer can choose what items are included and then the personalised product can be created. For example, Graze customers are able to inform Graze what products they like and then Graze will pack and send personalised snack boxes.  


Technology has changed (disrupted) the grocery industry. One of the many changes is that customers now expect personalised ranges to be offered. To meet this customer demand retailers and suppliers have to embrace technology to better connect with and understand their customers. The technology can capture data, that then can be analysed, to create personalised ranges for the customer. To deliver the personalised ranges, instore or online, retailers and suppliers need to review their current business model to ensure it meets their customers’ expectations for personalisation.

Good luck to all grocery retailers and suppliers that embrace technology and develop personalised ranges for their customers.

The information provided in this blog post was general in nature. If you require more information I offer a free initial consultation by completing a contact us form.