Why Woolworths Went Big on AI Personalisation

AI is reimagining the entire retail journey, giving brands more capabilities and their customers have more experiences. According to Fortune Business Insights, the global AI retail market is expected to reach $55.53 billion by 2030.

Retailers have strived for more advanced personalisation for years but have been limited by their existing technological capabilities, leaving them with a substantial glass ceiling.

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Despite this, customer demand for personalisation has surged, with McKinsey finding that retailers using personalisation generate 40% more revenue than those that don’t.

One organisation benefiting from greater personalisation is Australian retail giant Woolworths, which was one of the first adopters of AI for personalisation at scale through its 75% purchase of data analytics company Quantium.

Equipped with their personalisation engine, Woolworths reported that customers were five times more likely to buy than they would have been while using traditional marketing.

The supermarket giant has also significantly boosted its loyalty efforts by introducing its real-time loyalty program. By connecting in-store point-of-sale systems with the loyalty program in real-time, consumers can track, earn, and redeem their points as they shop.

“Our real-time loyalty platform is a re-platforming of our loyalty business that has taken us close to 3.5 years to go from a legacy system that had a number of constraints in what we could do for our members, to a system that is real-time,” former Woolworths CEO Brad Banducci said in a 2023 earnings call.

“It’s Eagle Eye, for those interested in the tech behind it. And it can be instantaneous. It can reconcile full history. And it’s not constrained in terms of the offers we can provide, or how we can repurpose it, so we have an incredibly powerful platform.”

Woolworths has achieved AI innovation success, where many organisations are still contemplating just how it can be done. The organisation recognised the opportunity; AI can help analyse everything from purchases, browsing time, scrolling, likes/dislikes, and used offers, giving retailers more real-time metrics than ever.

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Understanding The Challenges

While Woolworths is a positive example of a retailer making strides to harness its data and deliver strong, AI-powered personalisation, many other retailers find themselves at a crossroads.

AI is the way forward, but deciding how to implement, integrate, and optimise it to achieve critical goals like advanced personalisation and customer engagement still is an open question.  

According to Deloitte’s 2024 US Retail Industry Outlook, half of all retail executives lacked confidence in their company’s ability to use AI effectively. Furthermore, transitioning from the binary to a more nuanced understanding of everything from offers and engagement to communications has enabled brands to treat every customer as an individual, not a segment.

Part of the challenge will lie in change management. Retailers must shift from traditional analytical methods and overcome existing legacy infrastructures, which often leave retailers unable to deal with the millions of customer data points and offer the variations they need to achieve truly advanced personalisation and best data utilisation.

The real challenge isn’t the intention but rather the lack of a retail-specific solution that can be easily integrated into retailers’ tech stacks.

As AI solutions advance, many experts don’t just expect their power and capabilities to increase but also the ease of installation and personalisation.In the meantime, many retailers will be focused on getting over the buzz-driven phase of AI and into the practical solutions that give them the real-world revenue bumps they expect.

This article is an excerpt from the recent whitepaper, Eagle Eye’s AI Anthology, the definitive resource on leveraging AI for personalisation and retail marketing. To check out the full document, which is full of data and insights from our AI experts, follow this link.

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