“Less is more.” “Work smarter, not harder.” How many times have we each encountered one or both of these phrases in our professional or personal lives? While it feels safe to say that they’ve worked their way to “cliché status”, as with many cliches, they are grounded in ideas that have merit.
When we consider the predictable nature of how we spend our time, it’s no surprise that many of us are looking to create efficiency. According to the Bureau of Labor Statistics, we spend all but 15 minutes per day engaged in the same 11 categories of activity, including 30-45 minutes dedicated to purchasing goods and services.1
One of the most widely embraced rituals throughout history has been the acquisition of consumable goods for use in and outside of the home. Our ancestors accomplished this through hunting and gathering, then through trade and barter—today, you can go to a store, order on your phone for curbside pickup in the retailer’s parking lot, or have a third-party's drone deliver your goods.
The methods have evolved, but the routine remains fundamental. According to the Food Marketing Association (FMI), the average household spends $148 each week on groceries2, a number we can only expect will climb with inflation. Though the average supermarket offers thousands of products, it is estimated that the average US household buys fewer than 400 annually—many of which are purchased on a regular frequency.3
With so many options for acquiring regular purchases in today’s market, each customer interaction is a race for retailers to acquire or retain spend and potentially fleeting opportunity to build a meaningful and differentiated relationship with her.
Many brands, such as Amazon, Chewy and Albertsons Companies, are now using technology to streamline repeat purchasing for their customers, insulating themselves from leakage to competition, and it’s been a massive success. Amazon’s Subscribe & Save program moves approximately 40% of its CPG volume annually and Chewy’s Autoship program contributes to more than 75% of the company’s net sales, enabling record Q1 results. Industry expert Kevin Coupe recently sat down with Albertsons Companies CEO, Vivek Sankaran, who articulated the efforts the company is making to "drive friction out of mindless shopping". Full-basket auto-replenishment represents one of the most direct ways to bring this concept to life for customers.
When purchase routines are put on auto-pilot, it frees up time to explore and engage mindfully in categories of interest. Kantar reports that well-executed subscription programs lead to nearly one-third of shoppers buying a wider variety of that product type and close to half reducing or eliminating category shopping elsewhere.4 Market leader Replenium uses a proprietary neural network with fully anonymized purchasing data to help aid in mindful recommendations, such as when it might be time to change from a size 1 diaper subscription to size 2 or new snacks to try, based on dietary preferences in other categories.
The beauty of a program that transcends household purchasing categories is the extent to which the full range of customers’ needs can be met and a substantive relationship can form. While Chewy has demonstrated that customers will seek a relationship with a business that seamlessly delivers their recurring pet care needs, consider the potency of a retailer that can deliver on their pet needs, plus their morning personal care regimen, go-to dairy, meat and produce, as well as their kiddos’ favorite lunchtime snack.
At a time when there is great speculation around how artificial intelligence will impact industry operations near and longer term, auto-replenishment serves as a way for retailers to gain comfort and experience with this category of technology, while delivering a non-invasive yet personalized and convenient experience that customers are demanding.
Curious to learn more? Contact Replenium today for more information on bringing automated repeat shopping to your customers.
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Suggested Reading:
2- US Grocery Shopper Trends, October 2022; FMI | Supermarket Facts
3- 2021 Dialogic Group Consumer Purchasing Assessment
4- Kantar ShopperScape Evolving Online Landscape Deep Dive, April 2021; Kantar Online Choices Survey, January 2020