Published on the 18/06/2025 | Written by Heather Wright

Grocery retailers can drive profits and increase engagement with AI tools…

The Australian and New Zealand grocery market has faced its fair share of ups and downs, challenges and opportunities over the last few years.

In this region we’ve seen supply chain interruptions, stock shortages, cost pressures, consumer price sensitivities and regulatory scrutiny. At the same time, there’s been rapid advancements in technology, particularly concerning AI and automation.

Globally, the loyalty programs of some grocery chains have provided increased resilience in uncertain times.

AI-fuelled personalisation

Personalisation has been an enduring goal for grocers, and for good reason. It’s a path to delight customers, encourage engagement, and drive financial performance.

Personalisation also allows grocers to allocate their marketing and promotional spending more efficiently by presenting discounts to those customers most likely to be motivated by them.

Grocery retailers have a unique advantage here, given the amount of data generated across the high number of SKUs in their inventory and the frequency of customer visits. With a modern loyalty program, they have all the data they need to tailor offers to individual customers.

Boston Consulting Group (BCG) estimates that personalisation leaders will experience US$570 billion in global growth by 2030. On the ground, several well-recognised grocers are seeing significant financial returns from advanced personalisation strategies.

UK supermarket chain Tesco delivers personalised customer experiences through its popular Clubcard program. Tesco’s latest trading statement reports that there are more than 23 million Clubcard households in the UK and that Clubcard sales penetration was 82% in the UK and 87% in Central Europe. There are also 16.3 million Tesco app users, with visits to the app increasing year-over-year.

This number of digitally connected customers allowed Tesco to launch a personalisation initiative driven by gamification: Clubcard Challenges. This program offers customer personalised, goal-oriented challenges over six-week campaigns, with points rewards offered for completing challenges like spending £20 on certain line or range of products over the period.

Clubcard Challenges uses AI to tailor thresholds for each participant, based on past purchase history and preferences, which are then analysed and processed by predictive AI algorithms.

During the Christmas-themed Challenges campaign of 2024, 10 million customers received their own personalised set of Clubcard Challenges. Of all customers who visited the Clubcard Challenges site or pages, 76% converted into players. Sixty-two percent of all players reached the first reward threshold, becoming winners. Those winners collected over half a billion extra Clubcard points over the campaign period.

The scheme helped Tesco’s H1 24/25 overall adjusted operating profit to increase 15.6% over 2023 to £1.65 billion.

ANZ behind

While modern, AI-driven personalisation, gamification and omnichannel engagement are transforming grocery loyalty globally, these approaches represent somewhat untapped opportunities in the Australian and New Zealand markets. While the true-personalisation sector is still young, ANZ retailers that implement such strategies have an opportunity to create a compelling advantage.

In addition to building resilience to market challenges, the key message grocery retailers need to pay attention to is the profitability of personalisation when backed with robust data and smart execution.

The best grocery loyalty programs are designed around personalisation driving bottom-line results. Gamification as an end to itself has diminishing returns, but when designed with purpose, it can be an incredibly valuable and ROI-delivering tool.

The success of any omnichannel loyalty initiative is directly proportionate to the volume of customers that participate in its digital channels. More eyeballs equals more engagement, bigger baskets and bigger media opportunity.

Australian and New Zealand grocery brands that apply these lessons across 2025-26 can make a real difference. Success, as ever, will rest on focusing on programs that customers find valuable, practical, engaging and effective.

Read more insights in Eagle Eye’s latest grocers’ ebook, Loyalty Lessons That Will Shape 2025.

About The Author

Jonathan Reeve is VP for Eagle Eye APAC, responsible for helping retailers in the region develop and implement digital marketing programs to drive customer acquisition, interaction and retention. He’s also the author of Retail’s Last Mile: Why Online Shopping Will Exceed Our Wildest Predictions.