New Year. New Options.

This week, millions of Americans renewed their gym memberships and promised 2018 will be the year they start eating healthier. Yet a committed subset of this group took their resolutions to the next level by enlisting the scientists at Habit to create personalized wellness and nutrition plans. 

A high-profile disruptor in the food-tech sector with the backing of Campbell’s Soup Co., Habit uses biological samples to identify genetic variants and biomarkers within a customer’s DNA to create a personalized nutrition profile and, in some areas, even deliver personalized meals based on their biological profile.

Example of a Habit personalized nutrition profile

The process isn’t for the faint of heart, as author and contributing writer at the Washington Post, Sophie Egan, found out the hard way. The $299 (plus shipping and handling) investment requires a DNA cheek swab, core measurements and the ingestion of a proprietary Habit Challenge™ Shake. But perhaps Egan’s most astute observation came toward the conclusion of her essay when she wrote:

“On the face of it, personalized nutrition makes sense. Many people feel that the existing national dietary guidance of one-size-fits-all has failed them.”

Unlike other diet/nutrition companies that promote the ability of users to customize their programs, Habit is unique in its promotion of nutrition personalization. And the latter is quickly becoming the new consumer expectation.

WHY IT’S HAPPENING

Personalization is the direct result of the consumer shift from Affluence to Influence. As Generation Z witnesses the true death of a majority at a conceptual level, mass fragmentation will make the idea of ‘majority’ irrelevant for both brands and marketers. As A.T. Kearney explains:

“Affluence Model consumers bought the fiction that ‘one size fits all.’ Alternatively, Influence Model shoppers believe ‘one size fits nobody–except possibly by accident.’ Societal fragmentation will be celebrated as personalization in the Influence Model.”

WHAT WE THINK

The desired result of personalization vs. customization is identical: a better customer experience. But the paths to get there are dramatically different.

  • Customization: Brands provide a single set of choices that consumers can adjust based on their preferences
  • Personalization: Brands curate choices already tailored to a consumer’s preferences based on previous behaviors/interactions

WHAT’S NEXT

To achieve true customer personalization, brands and marketers must leverage the power of customer data. Below are a few ways personalization will likely come to life in food and beverage marketing:

Loyalty Programs Get Personal

In a November 2017 consumer study, Restaurant Hospitality found that 59% of consumers said they would be more likely to participate in a loyalty program if rewards were customized to their prior purchases. For example, instead of offering a generic “Free Drink” reward, Starbucks could utilize consumer transaction data to instead offer this customer her most frequently ordered beverage: a grande salted caramel mocha with extra whip. 

Loyalty Program Email Evolution Sample

Consumer-Designed Food

Back in 2014, Barilla introduced the world to their 3D pasta printer, which could print unique shapes in under two minutes. Contests are held each year to come up with new designs and, as Saveur Magazine explains, the 3D software can sculpt forms that could never be made by hand or machine. As technology becomes more accessible, consumers could theoretically craft and print their designs for a truly personalized pasta experience at home.

Menu Recommendations

UFood Grill recently installed new ordering kiosks with facial recognition software at their Owings Mills, MD, location. Customers who opt-in for having their face scanned sync it with a credit card and the system begins tracking their orders. On the next visit, a quick scan by the kiosk can bring up past orders for quick ordering. Proponents of the technology say facial recognition, paired with data algorithms, will soon be able to serve up personalized food and beverage recommendations.

UFood Facial Recognition Kiosk

 

Is Automation the Answer?

“This has to be a render,” wrote Jesus Diaz, author and contributor at Co.Design, in his November 2017 article on grocery e-commerce. But what looks like a 3D depiction is actually 100% real robots zooming across a highly sophisticated product grid filling online grocery orders for real customers.

The British-based company, Ocado, is the world’s largest automated warehouse for grocery fulfillment. At its Andover warehouse, a swarm of 1,000 robots navigate a grid the size of a football field to fill orders and replace stock. The new system, which went live in mid-2017, can fulfill a 50-item order in under five minutes–well under the two hours it takes at a human-only operating facility.

Those of us in the industry know that grocery e-commerce will be an integral part of the food future, but is robot automation the answer?

WHY IT’S HAPPENING

Unemployment rates and minimum wage growth suggest automated fulfillment will become a necessity in the near future. As Chris Rupkey, chief economist at MUFG in New York, lamented to Reuters in August 2017, “Companies are running out of workers to hire to do the job or even train to do the work” that needs to be done1. The ratio of job openings to unemployment also hit a 16-year high in August, signaling the widening gap between job openings and available candidate skills mismatch.

Retailers are also increasingly paying more for even low-skilled positions, like those filling and delivering online grocery orders. In 2017, only 20 states match the federal minimum wage of $7.25 and nine of those introduced legislation in the last twelve months to increase their state wage2.

If both trends continue, retailers will soon be out of staff and out of dollars to continue their current service model.

WHAT WE THINK

Even the likely adoption of automated grocery ordering will still not replace the necessity of in-person shopping trips.

In their 2017 “Groceries 2.0” report, Field Agent found that 62% of U.S. consumers said they wanted alternatives to traditional, in-store grocery shopping. While consumers like the idea of forgoing the frequent trips to a grocery store, over 60% said they don’t shop online because they’d lose the ability to personally inspect sensitive items like produce.

Technology is incredibly efficient, but we’re a long way from algorithms successfully replicating the human nuances of grocery selection.

WHAT’S NEXT

Knowing that both online and in-person grocery will be part of our customer’s future, we as food marketers should adjust our e-commerce strategies based on where our brands/products reside in brick-and-mortar stores. As The Nielsen Company found in its 2017 research, traditional center-store items are migrating online, while perimeter and fresh goods remain in-store purchases3.

Graph showing which center store shopping categories are moving online

Center-Store Brands/Products

  • The Challenge:  Online shoppers are less brand-focused compared to when they shop in-store, meaning they’re more likely to switch to another national brand or store brand during e-commerce shopping trips.
  • The Opportunity: Consumers who frequently shop online are more willing to try new products in many shelf-stable categories than in-store shopping consumers. Online shoppers are also more likely to make online impulse purchases in center-store categories than their in-store counterparts. These insights should be leveraged, particularly with new-product launches.

Fresh Perimeter

  • The Challenge: With online shopping available, basket size at in-person visits continues to decline.
  • The Opportunity: Shoppers are craving more surprise and innovation at in-person retailer visits. Brands and retailers must work together to build basket rings by providing more excitement, and more day-to-day enjoyment of food than what’s being offered today. Case in point: Sainsbury’s “Try Something New Today” campaign transformed their business by persuading customers to add just one more item to their basket.

Just some Thought for Food

1 “U.S. Job Openings at Record High; Labor Market Tightening.” Reuters. 8 August 2017.
2 “2017 Minimum Wage By State.” Bankrate. 2017.
3 “What’s Next in E-Commerce?” The Nielsen Company. 2017.

Questions, comments or want to learn more? Let's connect! weshouldtalk@jtmega.com

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