Got a grocery loyalty app? How personalized offers are designed to lure in shoppers

globalnews.ca:

When Diana Skakavac scrolls grocery store loyalty apps, she’s always looking for her “unicorn”: personalized offers for Tide laundry powder.

“My grandma is a very strict user of the Tide powder. She always has me purchase that for her,” said the Toronto woman behind the Have Coupons Will Travel account on Instagram.

“It has to be Tide powder. We’re not bringing home the Tide liquid or the pods. She’s very brand loyal.”

But no matter how often Skakavac picks up Tide powder, the grocers never seem to reward her for the behaviour.

“My friend and I used to joke about that. She got one (Tide offer) like two or three years ago and she held onto that thing for dear life because for some reason, they never come around.”

Why Skakavac never scores Tide discounts lies in the mysterious nature of grocer loyalty programs, which pump out a plethora of personalized incentives every week designed to lure in shoppers.

Retailers tell customers their offers are determined by how they shop. That’s true, but it’s a bit more complicated than simply granting rewards based on past purchases.

“It’s like a constant test-and-learn process,” said Grant Packard, an associate professor of marketing at York University in Toronto, who has advised Loblaw Cos. Ltd., Indigo Books & Music Inc. and Cineplex Inc. on their loyalty programs.

The more people shop, the more the technology powering the apps learns — and it’s not only about what you reach for at the supermarket.

They learn how price sensitive you are, how likely you are to try something new or switch to a competitor brand and even whether you have moved in with a partner or family member or are expecting a baby.

“We can throw hundreds of variables into this black box and let it tell us what