Machine Learning in Retail
Retail is one of the first industries that started leveraging the power of machine learning and artificial intelligence.
Reitan Retail is a retail group operating in the grocery, convenience and fuel sectors in the Nordic and Baltic regions. It employs around 39,000 people across 3,800 stores in Norway, Sweden, Denmark, Finland, Latvia, Lithuania and Estonia, with a portfolio of respected convenience retail brands such as 7-Eleven and R-Kiosk.
As a market-leading retail group, REITAN prides itself on its clear and consistent focus on its key values and business philosophy, which include concepts like simplicity, commerce, common sense and skill. And it’s these values that ensure that compelling ideas are shared across business units and brands, to ensure ongoing profitability.
A recent example is the adoption of machine learning technology by Reitan’s R-Kiosk convenience retail brand in Estonia, following the success of extensive machine learning trials by 7-Eleven to optimise the performance of its coupons and offers for customers.
The award-winning 7-Eleven team in Denmark had found a way to use machine learning in retail to be more effective in managing offers in the incredibly busy world of mobile marketing, and once they shared with R-Kiosk the incredible uplift in commercial performance and customer delight they had seen, it became a priority project for the Reitan team in Estonia too.
Led by Johanna Ambre, R-Kiosk’s Head of Innovation and Marketing at Reitan Convenience Estonia, the machine-learning retail project has been designed to support their busy marketing team and manage customer coupons in a way that’s relevant and compelling, and for the first time – automated.
Johanna Ambre is Head of Innovation and Marketing at R-Kiosk Estonia, part of Reitan Convenience Group
Coupons Can be Challenging
Planning, managing and promoting offers and coupons manually to ensure the best ones are seen by customers is very time-consuming. Like 7-Eleven in Denmark, the marketing team in R-Kiosk simply didn’t have the time to regularly shuffle the positions and prominence of the coupons, so they were not particularly appealing to consumers.
Having solved the time-consuming challenge of sorting these for the marketing team in 7-Eleven Denmark, Liquid Barcodes shared with R-Kiosk the power of adding artificial intelligence to the presentation process, applying sophisticated algorithms and machine learning technology to automate the sorting of offers at scale.
Now, instead of relying on the busy marketing team, R-Kiosk’s programme uses consumer insights to intelligently decide what offer to show each customer on every app visit – the ones which will be most exciting and relevant for them.
And we have no doubt that the results for R-Kiosk in Estonia will be just as exciting as they were for 7-Eleven in Denmark. Both brands realise that this is a better way to manage these offers – a MUCH better way.
How does Machine Learning Improve Customer Loyalty?
Different customers engage with different offers at different times for different reasons.
Liquid Barcodes machine-learning algorithm combines key insights about the user, as well as the time of day they are viewing the app, and other factors such as the season and weather, in order to intelligently decide what coupons should be shown in each moment for each member. Richer data sources can also be added, such as receipts data, NPS scores, past purchases and redemptions – any data the customer has on their personal profile.
By combining customer data, market data and transactional data such as the members’ redemptions history and receipts, the Liquid Barcodes loyalty platform intelligently decides what offers should be presented to each member in what order.
As a simple example, customers who love to pick up a coffee and croissant each morning would only see a croissant offer in the morning, not the afternoon.
Other people see offers for perhaps a nice snack or an easy meal to take home for dinner. And so, every other member sees similarly relevant offers for their favourite products at the times they are most likely to want to buy them.
Such personalisation at scale, delivered so quickly in such an intimate and intelligent way, is the reason this machine-led approach has delivered FIVE TIMES the usage of the top three offers in the 7-Eleven programme compared to the control group.
What’s Next for Reitan Group and Machine Learning for Loyalty
Having successfully optimised our machine learning algorithm to match the needs of R-Kiosk customers in Estonia with more relevant offers, Johanna explained why this project has been so effective and relevant:
“We are excited to see the power of machine learning in retail. It’s helping us test and learn what offers create the best customer experience in store. The more relevant we can be, the more loyal and delighted our customers will be – giving them yet another reason to keep coming to us in R-Kiosk for everything they need every day.
We will share our success story with our colleagues across the group, so they can also eliminate the need for manual coupon positioning using the power of machine learning.”
Liquid Barcodes is a leading global loyalty and digital marketing technology company specialising in the convenience store and foodservice industries. Our proprietary cloud-based technology platform allows retailers to create and manage their machine learning campaigns with a proprietary process we call the “customer connection cycle’ to engage, promote and reward customers’ activities in real-time across digital and media channels.
How we do it:
We have developed the most advanced loyalty and digital marketing technology platform specifically for convenience store and foodservice retailers globally.
Retailers use our self-service dashboard to create and manage loyalty-driven marketing campaigns that increase purchases with their existing customers, as well as effectively target and acquire new customers through partners or paid media channels.
One core component of live loyalty is gamification. We have gamified branding, loyalty and promotions. We believe this approach is essential in order to get customers’ attention and ultimately truly engage them with repeatable actions thereby winning their loyalty.
Check out some of our exciting/proven results here:
Chief Content Officer, Liquid Barcodes and Loyalty Podcaster
With over twenty-five years of marketing experience, I specialise in loyalty marketing articles and podcasts. In addition to working with Liquid Barcodes, my clients have included Telefonica O2 Priority, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer Group (UAE), as well as Avios – the global points currency for some of the world’s top airlines. I am also a former judge for the Loyalty Magazine Awards and proud host of the “Let’s Talk Loyalty” podcast – the industry’s first podcast for loyalty marketing professionals.