Kimberley Cornwell’s husband is on a high-protein diet, and he usually eats eggs for breakfast. So when a Safeway (SWY) shopping app offered a deal a few months ago on 18 eggs for $1.89, she took it. Cornwell had never given the store any information about her family’s health or fitness needs. The Chicago recruiter is a member of Safeway’s Just for U program, which uses complex algorithms to sift through shopping data to guess her needs and produce special personalized offers. “Sometimes I’d see something, and it’s a good deal or something I’d like to try,” Cornwell says. “I can usually save $10 to $20.”
Such individualized pricing could become the norm in a few years, as grocers—from Safeway to Kroger (KR) and Canada’s Metro (MRU:CN)—try to customize offers that will increase sales and keep shoppers from switching to competitors’ stores. “Maybe over time, shelf prices become less relevant to a subset of shoppers,” says Mike Minasi, Safeway’s president of marketing.
The idea is to ape the targeted shopping experience of online retailers such as Amazon.com (AMZN), which suggest items to buy based on past purchases. For years a few big retailers have mailed packets of personalized paper coupons to members of their loyalty programs, typically between once a month and once a quarter. Now they’re offering similar discounts online or through mobile apps—this time, weekly. Users of Kroger’s mobile app this summer began receiving 150 coupons a week, sorted by relevance to each shopper. In September, Metro launched its digital metro&moi portal and a mobile app providing personalized coupons weekly. “The more frequency you have in communication with customers, the more lift in sales you get,” says Marc Giroux, Metro’s chief marketing officer.