Shoprite Holdings, parent of Shoprite and Checkers, which both make use of the Xtra Savings rewards programme, leans on the data collected via the scheme to gain insights into customer behaviour and inform the group’s strategy for increasing sales.
“With roughly 2 500 swipes per minute, we have the largest consumption data set on the continent, providing invaluable insights on the products consumers prefer, when and where they shop in-store and online,” Shoprite Holdings said in its integrated report for the year ended 30 June 2024, which was published on Monday.
“It also helps measure the efficiency of our direct communications, creating a more personalised shopping experience and delivering valuable operational and environmental efficiencies.”
According to the group, the Xtra Savings rewards programme, which was launched in 2019, is the largest loyalty programme in Africa, boasting 31 million customers: 19 million from Shoprite and 12 million from Checkers. The group said 85% of total sales at Shoprite and Checkers stores in the 2024 financial year came from loyalty programme customers, who saved a combined R16.9-billion through discounts.
The data gleaned through Xtra Savings card swipes is ingested by data analytics and AI tools created at Shoprite X, the group’s technology and innovation hub, and used to optimise stock levels and pricing to allow it to be “agile in its response to changing patterns in demand”, it said.
Business units within Shoprite and external suppliers are given an “insights-as-a-service” view of the 31 million Xtra Savings customers via a custom-built platform called Rex. By personalising offers, it said, the group is able to meet consumers’ needs and make groceries more affordable.
AI in-store
Big data and AI tools are not only being used to personalise the shopping experience on the customer side; they are being used to drive operational efficiencies, too. Shoprite and Checkers stores now use demand forecasting to optimise stock, tailor marketing messages for promotions and reduce operational costs.
“AI is also being used in-store to optimise shelf stocking, layout planning and promotions, with algorithms analysing shopping patterns and store traffic to recommend the best strategies for product placement and promotion,” the group said.
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Acknowledging the growing impact of digital technologies on the success of retailers, the group said it wants to attract, develop and retain globally competitive IT talent. Training its workforce to be equipped to work alongside more sophisticated tools and technologies is a key imperative in the short and medium term, it said.
However, the group also noted concerns about how digital technologies may negatively impact job security but said given the comparative costs of digital technologies and labour in South Africa it is unlikely that digital tools will threaten jobs, at least not for now. With around 160 000 employees, Shoprite is the largest private sector employer in South Africa.
Expanding the Checkers Sixty60 platform is core to the group’s digital strategy. To improve delivery times, the group deployed a machine learning algorithm to dynamically define optimal delivery regions. The solution overlays a map with the spatial-temporal view of orders in real time, determining which store should fulfil which orders by taking packing times and driver location into account.
Users of the Sixty60 app have the option to gain even more rewards and savings through their Xtra Savings cards. “This year saw the launch of Xtra Savings Plus, South Africa’s first grocery subscription, offering unlimited free Sixty60 deliveries, as well as additional in-store discounts and double personalised offers. It quickly reached three times our original subscriber target,” said Shoprite. – © 2024 NewsCentral Media