AI algorithms are convincing shoppers to buy more and more, according to the company behind many of the UK’s biggest supermarket loyalty schemes.
Eagle Eye, which works with retailers on customer promotions through loyalty schemes such as Tesco’s Clubcard, has described how the group’s recent adoption of AI created an opportunity to turn small shopping trips into sprees.
Last year, Eagle Eye acquired French AI startup Untie Nots with the goal of bringing the technology to its loyalty offering. The Paris-based group was rebranded as Eagle AI.
Using the shopping data of loyalty programme members, Eagle AI can determine “how much you can stretch [shoppers]”.
By tactically sending offers on products the AI system thinks a shopper is likely to buy, the company hopes to increase the number of purchases made and reward active consumers with greater deals.
“We’re not going to give you much of a reward for buying the three [products] that we predict you will buy next month, but if you buy four, eight, 10, then we will give you a significant reward to encourage you to move along,” Eagle Eye CEO Tim Mason told UKTN.
Eagle AI can also “map products against consumers” to look at what they do buy, and what products are “near on the map to each other that the customer doesn’t buy”.
The system can then tailor offers around those products that “in theory should be attractive”.
For Mason, hyper-personalisation through AI will become “centrally important” to the retail sector within a few years.
“There will become a situation of the haves and the have-nots, and the haves will be seen to be more profitable, and therefore it will put a lot of pressure on the have-nots to join in.”
This focus on personalisation won’t be limited to prices either. Mason said that within the next few years, the entire experience of shopping would be dominated by AI technology that knows consumers’ shopping history, personal preferences and even their personal health.
A consumer’s tastes, cooking ability, personal care, health needs and medicines will “be built into a personal profile that can influence the products offered to consumers”.
“Eventually you end up with an Instagram-like newsfeed from your grocer, which takes into account all of those things that you’re interested in.”
On Wednesday, the London-listed group reported profit for the year ended June 2024 of £5.4m, a six-fold increase on the previous year off the back of an 11% revenue surge to £47.7m.
The group has not proposed a dividend as it looks to focus on growth. Shares in Eagle Eye were valued at 482.00 at the start of trading and have dropped around 6% since then.
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