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Digitalisation and technical solutions create new opportunities for the grocery industry

Anni Ronkainen, Chief Digital Officer at Kesko, explains how the retail group leverages digital opportunities to provide a more personalised customer experience.

Anni Ronkainen / March 30, 2020

Kesko is one of the largest retail groups in Finland and its various branches operate on a local basis: each store is designed around its location and customer base. This means that while it's responsible for the basic business framework of its stores, the individual store owners operating under the group are provided with considerable leeway in how they wish to steer and develop their businesses.

Online grocery orders complement traditional grocery sales 

Kesko has also invested heavily in the development of its online grocery ordering service, and last yearsales in Kesko’s online service grew by over 70%. 

However, we do not differentiate between our online and brick-and-mortar stores. We want to provide our customers with the complete package so that they can choose the options that suit them best, emphasises Ronkainen. 

According to Ronkainen, the main obstacles to the development of Kesko’s online service have been practical in nature. 

One key issue was our long delivery windows since nobody wants to be stuck at home for hours waiting for their food to be deliveredHowever, once we were able to introduce more specific delivery timesthe feedback from our customers has been very positive. 

Customers also behave differently in different countries. According to Ronkainen, Finnish consumers are particularly adamant about home deliveries. 

Finnish customers are not all that keen on any order collection points, for example. 

In the United Kingdom, online grocery orders account for around 7% of the grocery industry’s trade, and this figure is estimated to rise to 10% by 2023. While Ronkainen feels that it is unlikely that Finnish consumers will ever transition to purchasing all of their groceries onlineit does provide them with a valuable service. 

It is important that we understand our customers’ needs and how our online service can help make their lives easierThis type of service is an especially important timesaver to those living in more densely populated cities and regions. 

Using data for the benefit of customers 

At Kesko, data is used in various ways to provide added value to the group’s customers. 

“We want to be there for our customers every step of the wayfrom their first flash of inspiration to the final purchase,” emphasises Ronkainen. 

One example of this is Kesko’s recipe service, where customers can discover new ideas and options. 

Our data shows that our customers like to browse through our recipes and add the ingredients they like directly to their online shopping cart. We also provide recipe recommendations for various special diets and cooking habits, which is a feature that our customers have been very vocal about.” 

Could data-driven personalisation go too far? 

According to a recent study, more than 80% of consumers are willing to provide their data for more personalised service experience. 

This means that a message that has been personalised with a customer’s data is not considered a commercial message, but a service,” Ronkainen notes. 

According to Ronkainenthe best personalisation solutions are the ones that the consumer may never even notice. 

A good example is our online store’s personalised search function, which is based on the customer’s previous behaviour and habits. Our customers consider this feature of convenience, and I believe that the same applies to our other services as well. 

Ronkainen is also quick to emphasise the responsibilities associated with data collection. 

“Part of our responsibility is data ethics, i.e. how data is used in an ethically correct manner. The trust that our customers place in us is important, and we definitely want to keep their trust.” 

Kesko understands the value of digital solutions 

At Kesko, digitalisation forms an integral part of the group’s entire business model. 

We could never separate our basic functions from our digital business. Our digital development projects are not implemented separately, but as part of our overall business development,” explains Ronkainen. 

According to Ronkainen, Kesko has linked its data-driven efforts closely with its service development process. 

Any new plans for our services are based on our customers’ activities and feedback. 

The digital world also plays a major role in how Kesko interacts with its customer base. 

Few people want to read paper advertisements these days, so the best way to reach them is through digital channels. Our data also shows that the people we reach online are much more valuable to us than those who do not use any digital channels, Ronkainen notes. 

The future of Kesko and the grocery industry 

According to Ronkainen, Kesko is set to adopt even more advanced digital solutions and technologies in the coming years. 

“In addition to the potential benefits of artificial intelligence and machine learning, our future efforts will focus heavily on the use of predictive analytics. 

However, the biggest change to Kesko will be the ways in which the group will need to conduct its business in the future. 

We can no longer count on being just the fastest – we also need to change how we work. We need to become even more agile and eliminate all traditional boundaries within our organisation so that we can provide our customers with even more added value and at a more rapid pace than ever before,” Ronkainen concludes. 

This article is based on our data related podcast Tietoa tulevasta. Listen to the related episode in Finnish now!

Anni Ronkainen
Chief Digital Officer, Kesko

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