Marketing

North American grocers must change their relationships with suppliers

Grocery personalization calls for reimagined partnerships with suppliers, who have traditionally driven customer promotions. If grocers intend to leverage personalization (and reap all the benefits it brings), they’ll need to let consumers dictate the promotions instead.

Photo: Adobe Stock

April 15, 2025 by Anders Mittag — Chief Commercial Officer, Lobyco

For many years, mass coupons have reigned supreme in the North American grocery market. Whether via paper mailers, email blasts, or loyalty apps, grocery stores issue the same coupons to wide swaths of their customer base with the hope that a fraction of the offers will resonate with shoppers. This framework is an inefficient use of resources — and research shows it doesn't do much to inspire customer loyalty.

Embracing personalized promotions, however, can be a considerable undertaking — one that many grocers aren't prepared for. Such engagement requires a data-first approach marked by new tools, processes, and ways of conducting business.

Perhaps most fundamentally, though, grocery personalization calls for reimagined partnerships with suppliers, who have traditionally driven customer promotions. If grocers intend to leverage personalization (and reap all the benefits it brings), they'll need to let consumers dictate the promotions instead.

Why fix what isn't broken?

North American grocers have been issuing coupons since the dawn of the supermarket in the 1940s, and the model has worked well for all parties involved.

Consumers are used to sifting through hundreds of coupons to find the offers that align with their preferences, and don't seem to mind putting in the effort if it means saving money at checkout.

Suppliers enjoy the relative degree of control in their partnerships with retailers, choosing how and when their products will be promoted. They benefit from brand recognition and loyalty and can use promotions as an extension of their marketing efforts.

Grocers, of course, take pride in knowing they're helping shoppers save money. They'll take any chance they can get to hone their competitive edge in a crowded marketplace.

This arrangement seems like a win-win-win. Why bother changing it?

Consumers are ready for a change

Upending the traditional model for grocery promotions may not seem very appealing.

After all, it means deviating from the path of least resistance. But new research indicates that this is exactly what North American consumers want. Lobyco's 2024 consumer survey polled shoppers on their grocery loyalty programs. The findings indicated that consumers want to see more personalization — nearly half (46%) said personalized offers make them feel more valued as customers, and 41% said they'd use their loyalty program more if it featured more personalization.

In the age of smartphones, curbside pickup, and home delivery, it's never been easier for consumers to change their preferred grocery store. If grocers are serious about solidifying their market share and improving brand loyalty, heeding consumer feedback is a great place to start.

Transformation from the inside out

There's no denying it — embracing personalized promotions requires effort. But there's good news: North American grocers aren't starting from square one. They already have
all the data in-house. It's a matter of organizing, leveraging, and acting on it.

Many of today's retailers still rely on manual, inefficient processes to generate promotions. Their teams send spreadsheets back and forth, making tedious updates cell by cell. At the core of this process, though, is a trove of data that, applied in a different way, can be the nexus of transformation.

This same data can be used to drive an end-to-end, cloud-based promotions platform that integrates disparate data sources and acts as a single source of truth.

Getting to this level of data management isn't a task to be checked off a to-do list; it requires continuous change management to ensure teams up and down the org chart are comfortable with (and excited by!) the new technology and its implications.

Achieving a sufficient level of data maturity is a monumental accomplishment, but that's not all that's required to move forward with personalized customer engagement.

It's time to put consumers in the driver's seat. The beauty of personalized promotions is that consumers get exactly what they want — in a much more efficient way.

The traditional couponing model has consumers scanning through hundreds of generic coupons to find the handful that align with their shopping lists. With personalization, consumers might be offered just five promotions per week, but these five are all based on their personal shopping history. For example, shoppers who frequently purchase pasta may be offered a promotion for free or discounted pasta sauce.

Consumers also don't have to hunt to find these offers. With a new, data-first approach, grocers' loyalty programs can live on smartphone apps that deliver promotions straight to shoppers' fingertips.

For this to work, grocers and suppliers need to change the terms of their partnerships. Suppliers won't be dictating the promotions schedule anymore. But the new way forward is much simpler, more efficient, and just as beneficial for suppliers: letting consumer data pave the way.

Thanks to data transformation, grocery tech teams will have all the information they need to determine which products are in highest demand or forecast how preferences may flex during a given season. Armed with this intel, grocers and suppliers can work together to deliver coupons sure to resonate with recipients. This means issuing promotions to customers who are most likely to enjoy the product, rather than taking a spray-and-pray approach.

Personalization is precision

Personalization isn't a moon shot. In fact, it's the current operating model for thousands of grocery retailers around the world. We have the technology today.

Embracing personalization means unlocking a new caliber of customer engagement and, therefore, loyalty. It's about using existing resources in a more actionable way. It also means being transparent about data usage and earning customer trust.

Personalization makes customers feel more valued. It gives suppliers a better chance at reaching the right consumers. And it gives grocers the opportunity to build lasting relationships with their customers. North American consumers have clearly indicated what they hope will change about the grocery industry.

Now, it's up to retailers to heed the call.

About Anders Mittag

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