How Ocado Fosters Loyalty at Every Stage of the Customer Journey with Personalization

See how the world’s largest online grocery store created meaningful impact with testing to drive customer engagement at every stage, resulting in a +13.5% uplift in subscriptions.

The Challenge

Ocado knows better than anyone that grocery shopping is, well, kind of a chore. That means an easy, empathetic, and time-saving shopping experience isn’t just nice to provide — it’s essential for creating repeat business. When evaluating its customer lifecycle, Ocado realized three main groups of shoppers reflect key stages of their customer journey:

• First-time shoppers
• Fifth-time and up shoppers
• Smart Pass subscription shoppers

Through testing and personalization, Ocado’s goal was to identify critical site changes that optimize the experience for each of these groups, creating more effortless and meaningful shopping experiences. The company hypothesized that this would drive loyalty over time and increase Smart Pass subscriptions.

Identifying first-time shoppers and streamlining their product discovery

Ocado knows that a customer’s first shopping experience is likely the longest and most challenging. But rather than try to simplify the experience too early—after all, at this stage, it is impossible to know what types of products a customer truly prefers—Ocado’s goal is to demonstrate the impressive breadth of products they offer. Ocado has a product catalog totaling over 50,000 ever-changing items, and they have realized that this is critical information for first-time shoppers.

Therefore, the total product listing page for shoppers needs to be updated, allowing new customers to freely browse all available products and build a cart before they are asked to create a mandatory account.

A first-time shopper sees the above homepage experience. They are able to browse all products and build a cart before creating a mandatory account. A promotional offer for first orders appears in the top banner, with the personalized amount displayed at the cart.

For first-time visitors, the Ocado product listing page looks like the above, showcasing a wide range of products and promoting an exclusive first-time discount banner at the top of the page. Personalized messaging in the cart shows the visitor the amount of money saved based on the current cart total.

Notice that this experience is mostly unguided, allowing first-time shoppers to fully explore the product catalog. This experience yielded a +5.7% uplift in the add to cart rate.

Personalizing the checkout flow for first-time shoppers versus returning shoppers

Ocado hypothesized that while returning shoppers might be amenable to reminders, flash discounts, and exclusive offers before finalizing their cart, new shoppers might prefer a cleaner and less distracting checkout experience. During the checkout flow, returning users see a “Before you go page” before they proceed to payment. Ocado wanted to test a if a cleaner experience would perform better for first-time shoppers. They removed the “Before you go” page, like so:

Encouraging shoppers to reach the fifth purchase with personalized exclusive offers

By looking at returning shopper data, Ocado realized that a key milestone in the customer journey is the fifth-time purchase. Shoppers who complete five orders with Ocado are much more likely to give long-term repeat business, and they are strong candidates for conversion to Ocado’s subscription service, Smart Pass.

Ocado is using Dynamic Yield to segment customers who have completed more than one order but less than five. This group is shown tailored messaging and exclusive offers based on their history, with the goal to incentivize them to complete their fifth shopping trip.

The experience contains an element of gamification in order to make grocery shopping feel more fun. Ocado displays a marker to indicate the customer’s progress towards the goal, tailored by the individual’s history, as shown here:

Additionally, Ocado further segments this group to display final incentivizing offers to shoppers who have already completed four trips. This sub-group is shown exclusive rewards that can be unlocked with their fifth purchase. The concept was inspired by the coffee shop “loyalty punch card” — only in this case, Ocado offers gifts such as free tote bags or chocolate.

Dynamic Yield’s AI-powered targeting allows experiences like this one to be shown to the right group of people at precisely the right time. Here, customers who have completed less than five shopping trips are educated on the unique rewards that come from completing their fifth purchase.

By displaying the progress marker and educational pop-ups to customers between their first and fifth purchase, Ocado intends to convert more shoppers to this fifth-time milestone.

Educating loyal shoppers to increase Smart Pass subscription rates

Once a customer has completed repeat trips, it makes sense to show them the benefits of Smart Pass, Ocado’s subscription service that offers free delivery and exclusive prices. Smart Pass subscribers are more likely to become true brand advocates and incorporate Ocado into their routines, so Ocado deployed site experiences to educate customers on the benefits and raise awareness of the program.

See above, the difference in the homepage experience for a returning customer who is not subscribed to Smart Pass, versus an existing Smart Pass subscriber.

With a simple overlay message to promote the subscription service to non-Smart Pass customers with five or more completed shopping trips, Ocado achieved a significant +13.5% increase in subscription rate.

With this particular success, the Ocado team is eager to ramp up their tactics and build out additional targeted experiences for more nuanced customer segments, testing personalized messaging relevant to these groups. The Smart Pass experience is a win-win for both customers and the business, as it offers long-term advocacy benefits while genuinely saving customers money.

In the future, a bigger emphasis on the brand and the individual

With the successful optimization of the key customer funnel stages under its belt, Ocado wants to focus next on better understanding individual customer behaviors to create even more seamless experiences centered around brand interaction.

One example, and one of the company’s newest tests, is the rearrangement of the product listing page to target regular shoppers with “multi-buy” product recommendations, displaying products that qualify for particular savings if purchased in bulk. The Ocado team realized that a customer pain point is the visibility of its cost-saving offers, so they ran a placement test to increase that visibility.

In the control, products that qualify for a “multi-buy” promotion if bought in bulk appear in the same line with other products. In the test, these products appear in their own row to create more visibility.

When showing the variation, customers were 55% more likely to add the recommended items to their basket, which in turn yielded a +6.7% uplift in conversion rate.

The team started with a customer insight, came up with a simple solution, validated their hypothesis, and now plans to iterate on the test to further improve the user experience. Working with Conversio, Ocado plans to embrace this data-driven process over the next year to test many more areas and experiences on the site, drilling down in particular on important brand interaction moments such as booking a delivery slot and creating a new account.

The Key Takeaway

In order to improve customer retention and create a better shopping experience, Ocado identified these three insights:

First, it is important to understand customer data beyond the initial purchase. For example, Ocado realized that the fifth-time purchase was more important than the first shopping experience. Once these key insights and areas are identified, the team can feel empowered to test and provide more value that resonates with their audience group.

Second, complexity doesn’t necessarily mean “better.” A simple tweak on the website can be incredibly impactful to the customer experience, and sometimes less is more — such as the case of removing promotional offers for first-time shoppers in the checkout process. Overcomplication can sometimes create more confusion and dissatisfaction, so simplification is key to reach customer needs as quickly as possible.

Finally, creativity is key to maintaining customers’ engagement and attention while keeping their grocery shopping experience as effortless as possible. This involves breaking down shopping experiences into smaller brand interactions, iterating on existing experiences, and changing customer perceptions of the brand.

By focusing on these key takeaways, businesses can create a customer experience that stands out in a crowded market, increase customer loyalty and retention, and ultimately drive growth.

GET YOUR DEMO

You acknowledge and agree that your personal data will be processed by Dynamic Yield as described in the Privacy Notice. By clicking the button, you confirm that you have read and agree to the Terms of Use.