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RIP Personalisation

RIP Personalisation


For the supermarket industry personalisation is when manufacturers and supermarkets tailor the shopping experience, including the products offered, to the shoppers’ individual requirements. This is the total opposite approach to traditional brand marketing that focused on target markets or group of shoppers.  Rashid and Matilla describe the change as:

‘It means that mass marketing is replaced by mass customization’.

Study on the scope and opportunities of category management for aligning the supplier-retailer business strategy, S Rashid, H Matilla, South Asian Journal of Management, 2011

Technology offered suppliers and supermarkets the opportunity to build better relationships with shoppers via personalisation. Key to delivering personalisation is access to shoppers personal data / preferences via technology. Due to changes in shopper demand it is questionable whether shoppers actually want to share this data today and in the future. Also the industry has struggled to offer personalised products vs other channels.

Hard Discounters

have irrevocably changed the face of retail in Europe and Australia, and are making steady inroads into the US

Steenkamp and Sloot

Source: Retail Disruptors, The spectacular rise and impact of the hard discounters

Hard discounters, such as Aldi in Australia, have been able to increase sales / share without shoppers’ personal data. For example Aldi Australia does not have a loyalty card, offer grocery digital orders (click and collect, home delivery) or personalisation.

Hard discounters would suggest having loyalty cards, digital orders, personalised offers etc will increase the CODB (cost of doing business). To cover the additional CODB would require increasing retail prices. Considering shoppers demand for ‘value’ hard discounters would question whether their shoppers are prepared to pay more for personalisation.

Aldi Australia won the most satisfied supermarket shoppers from Canstar Blue for the 5th year in a row in 2022. This highlights that shoppers can have an enjoyable experience without suppliers and supermarkets offering personalisation. So it is questionable to suggest personalisation is definitely the best option for suppliers and supermarkets.

Shopper demand?

Much has already been written suggesting shoppers want and are increasingly using technology during their supermarket shopping experience. In this example technology, from a shoppers’ perspective, may include a number of tools such as apps, digital orders, loyalty cards and websites. All these tools are used by shoppers whilst researching and / or purchasing their supermarket shopping.

As shoppers have demanded technology suppliers and supermarkets have developed tools to meet this demand. For example, as reported by IT News (Woolworths’ digital, ecommerce and loyalty payoffs start to scale, Aug 22) Woolworths now has;

business to consumer ecommerce sales of $4.7B, 10.3% Woolworths retail sales

13.7 million Everyday Rewards members (+628k vs previous year)

approx. 1 million active weekly ecommerce customers

Similarly, suppliers have developed tools to support their D2C (direct to consumer) channel.

Some of the growth in shopper demand for digital tools is due to COVID. For example, as reported by IT News (Woolworths reports 320% percent rise in app use as shoppers digitally prep, Apr 20) Woolworths had a 320% increase in app use after COVID restrictions were initially implemented.

The historic increasing use of technology would suggest shoppers are happy to use the technology and potentially share personal information … but has that now changed?

Hacking / data breaches

As reported by ABC News (Woolworths My Deal becomes latest target of cyber attack, Oct 22) Woolworths owned was hacked. Woolworths was one of many businesses in Australia, including Optus and Medibank, that were hacked recently. Hacking is not a new issue. For example, in May 2019 Canva was hacked and data about 137 million users was potentially accessed.

Earlier this year, as reported by Yahoo (Woolworths denies data breach after outraged shoppers claim Everyday Rewards hacked, July 22) Woolworths shoppers believed their Everyday Rewards accounts had also been hacked. Woolworths believes the issue may be due to online scams, not their systems being hacked. Irrespective of whether this occurred due to user error, online scams or accounts being hacked shoppers’ level of trust in Woolworths would have declined. Hacking shoppers’ loyalty card accounts is not a new issue. For example, as reported by (Woolworths Rewards cards ‘hacked’, points stolen, July 2017) the Woolworths app was being hacked in 2017.

So, could data breaches (irrespective of the cause) have a negative effect on the level of trust between shoppers and suppliers / supermarkets?

Facebook / Cambridge Analytica

‘I really don’t like the company’s monopolistic behaviour’

Oliver Coghlan

Source: The Guardian , I might delete it: Facebook’s problem with younger users, Oct 21

A well-known example of declining trust between users and a business was the Facebook / Cambridge Analytica data scandal. As explained by Wikipedia , personal data of millions of Facebook users was collected without their consent.

NBC News (Trust in Facebook has dropped 66 percent since the Cambridge Analytica scandal, Apr 18) reported research from Ponemon Institute highlighting that trust in Facebook declined 66% after the Cambridge Analytica data scandal. 2 years later business insider (Facebook ranks last in digital trust among consumers, Sep 20) highlighted that US consumers trust Facebook the least for protecting users’ personal information and providing a safe online environment vs other social media platforms.   

Source: NBC News , Trust in Facebook has dropped 66 percent since the Cambridge Analytica scandal, Apr 18

Obviously, the Facebook example highlights the business risk to suppliers and supermarkets having shoppers’ personal data. So do shoppers want suppliers and supermarkets to have their personal data? 

Shopper Privacy Concerns

Logically shoppers have privacy concerns due to issues such as Facebook / Cambridge Analytica data scandal and hacking of shoppers accounts.

According to research by Inside Retail (Retailers cannot ignore consumer concerns over data privacy, Jul 19) 81% of Australian consumers are concerned about their privacy / personal data. Interestingly 43% of shoppers don’t like receiving personalised emails based on previous purchases. These emails suggest businesses are tracking them. Only 26% of shoppers were open to receiving personalised emails.

Similarly, Deloitte (Every Breath You Take, Deloitte Australia Privacy Index 2022) discovered that ‘Majority of brands appear to conduct some form of online tracking and monitoring even though the majority of consumers are uncomfortable with this.’ Interestingly this research ranked the retail industry 9th (out of 10) on their privacy index. In 2020 the retail industry was 1st on their privacy index. In terms of trust the retail industry was the least trusted by consumers for protecting their online information. Generally speaking this research highlights Australian shoppers want to control what data is collected, how it is collected and then how it is used. Interestingly only 3% shoppers place a very high value on personalisation.

Shopper demand for personalisation

Source: Deloitte , Every Breath You Take, Deloitte Australia Privacy Index 2022

This research highlights the challenge for suppliers and supermarkets. Do shoppers want personalisation or to protect their personal data more?

The Apple example

Due to user concerns about privacy Apple added a new prompt when users open the App Store for the first time (Sept 21). This prompt allows users to turn off personalised ads. As reported by 9to5Mac (Apple: Most iOS 15 users opt out of personalized ads: no impact on App Store Search Ads conversions, May 22) 78% of Apple users are turning off personalised ads. The Apple example again highlights shoppers concerns about how their personal data is collected and used.

Government legislation

Numerous governments around the world have implemented legislation to try to protect users’ personal data. Personally, I would suggest the EU (European Union) GDPR (General Data Protection Regulation, 2018) was an important legislative step to protect users’ personal data.

Legislation will vary by country. Generally speaking, there is increased accountability on holders of users’ personal data to protect the data. Also, holders of users’ personal data have to get permission from users’ before using their data for any purpose.

Again, generally speaking, changes in government legislation are creating more risks / governance issues for suppliers and supermarkets that have personal data to create a personalised experience. So from a business perspective do the potential returns of personalisation outweight the risks?

Personalised Products in supermarkets?

Personalisation in the supermarket industry should allow shoppers to personalise the physical product to their personal preferences. It is highly questionable that this can be achieved in the supermarket industry. For other industries, such as QSR, personalised products are possible. For example, Dominos can allow shoppers to choose their preferred pizza base, sauces, toppings etc and then this product is made to order. To achieve a similar ‘made to order’ offer would require supermarkets to dramatically change their operations. Will supermarkets employ staff to make personalised pizzas? Will supermarkets then freeze these personalised pizzas because shoppers want a frozen personalised pizza? Will brand owners allow their products to be personalised? Will Coca Cola allow shoppers to change the amount of sugar in their product to meet their personal preferences?


Many suppliers and supermarkets continue to invest to offer shoppers personalisation. To deliver this shopper experience requires suppliers and supermarkets to hold users’ personal data. As highlighted by the Facebook example this decision carries a significant risk. Shoppers may no longer trust suppliers and supermarkets if, in their opinion, their personal data is misused. Also it is debatable whether shoppers now want personalisation due to their concerns about the potential misuse of their personal data.

In theory personalisation allows shoppers to personalise the physical product to their preferences. For most products it is highly questionable that the supermarket industry will ever offer ‘made to order’ products like other industries do. Supermarkets are more likely to uprange / increase depth and breadth of range to give shoppers more options. The sales success of hard discounters, such as Aldi, suggests upranging will not always maximise sales and shopper satisfaction.

On a personal note, I suggest suppliers and supermarkets consider the best way to serve shoppers. I remember the big claims about who had the best loyalty card program back in the 90s. After the hype there was a realisation that loyalty cards did not increase loyalty. The global sales growth of hard discounters again highlights loyalty cards are not necessary to maximise sales and share. So after the hype will offering personalisation actually drive sales and share? Maybe shoppers trusting the supplier or supermarket is more important. Maybe the ‘keep it simple’ approach by hard discounters, such as Aldi, is the best way to serve shoppers …

The information provided in this blog post was general in nature. If you require more information I offer a free initial consultation. Contact Details .