Have you ever wondered how your favorite grocery store always seems to know when you are running low on coffee? Or how you always seem to get a discount on the brand of detergent that you just happened to be thinking of purchasing?
It’s not magic—it’s data. And it turns out that the grocery store is more than just a place to pick up eggs; it’s a high-tech laboratory studying our every move. Let’s take a look at how these grocery stores are using the concept of “loyalty” to learn more about us than we might think.
The Big Global Shift
Gone are the days when a loyalty program was just a piece of cardboard with ten stamps. Today, giants like Tesco and Kroger are building what they call “relationship ecosystems”.
Consider Kroger’s initiative, for instance. It gathers a lot of consumer data using loyalty cards for targeted promotions and even sells anonymous insights to brands. Tesco’s Clubcard tracks the purchases of 19 million customers for targeted promotions and store designs, while Sainsbury’s Nectar360 scheme extends to other non-food categories such as automobiles. [Reference]
Amazon uses similar tactics with credits for eco-friendly choices, gamifying habits. Globally, supermarkets enrich loyalty data with third-party demographics for detailed profiles, driving 81% higher purchase likelihood via personalization. [reference]
A Closer Look: What’s Happening in Sri Lanka?
Right here at home, the “data war” is just as intense. Our big three Keells, Cargills, and Arpico have very different ways of getting to know us. [reference 1, reference 2, reference 3]
Marketing Applications
Data enables personalized ads, with 81% of customers more likely to buy via loyalty influence. Supermarkets optimize supply chains, predict demand, and sell aggregated insights to partners.
| Region | Key Chains | Primary Data Use |
|---|---|---|
| UK/Europe | Tesco, Sainsbury’s | Personalized offers, third-party ads |
| US | Kroger, Walmart | Sell insights to brands, enriched profiles |
| Sri Lanka | Cargills, Keells | Retention, POS analysis |
| South Africa | Various grocers | Credit scoring |
How They Use Your Story to Sell You More
Once they have your data, they don’t just let it sit there. They use it to “nudge” you.
This is the science of what goes with what. Retailers found that people who buy diapers often buy beer – not because babies drink beer, but because tired parents do!. They use this to decide which items to put next to each other in the aisle.
Ever stopped going to a store and then received a “we miss you” text message with a 20% discount offer? That’s Churn Prediction. They notice you haven’t been there in three weeks and send you a “reactivation” message to lure you back.
When you notice a bank such as Commercial Bank or HSBC promoting 25% off fresh veggies on Saturday, it’s a win-win situation. You get a good deal, the bank becomes your preferred card for “daily essentials,” and the supermarket gets a valuable bill.
The Elephant in the Room: Privacy
We’ve all been guilty of the “Privacy Paradox” – we claim to care about our privacy, but we’ll gladly give away our phone number for a 10% discount on chicken.
But the game is changing. Sri Lanka just passed the Personal Data Protection Act (PDPA), which is essentially our version of the tough laws they have in Europe (GDPR). This means that retailers have to be more upfront about why they want your data and give you the right to tell them no or to delete your data.
[reference]The Bottom Line
The next time you swipe your loyalty card or provide your mobile number at the checkout, remember this: you’re not just accumulating points. You’re telling a story about your life, your health, and your finances. Grocery stores are increasingly becoming more like “wellness partners” or “personal assistants” rather than just a store.
