Have you ever unpacked your grocery order, excited to make a recipe, only to find a weird substitute for a key ingredient? While some might find oatmeal raisin a satisfactory replacement for chocolate chip cookies, others will not.
This disconnect between expectations and what shoppers actually receive is one of the leading reasons customers return products (and lose confidence in a brand). In fact, well-established Fortune 500 grocery chains could be throwing away tens of millions of dollars on bad substitution returns, refunds and customer service calls related to these issues.
Luckily for retailers, customer-controlled substitution tools can put the user in the driver’s seat to ensure they get their first-choice alternative, not just the average fit. Let’s examine how overcoming integration challenges and personalizing the experience can ultimately boost customer satisfaction, improve retailer net promoter score (NPS) scores and shave millions off the budget.
From ‘One-Size-Fits-All’ to ‘Your-Size-Exactly’
From the standardized glass milk bottle of the 1800s to today’s mind-boggling 50+ variations of just milk (whole, soy, organic, dairy-free, coconut, you name it!), online grocery shopping has exploded with choice. But with this abundance comes a challenge: How do stores ensure that they match the perfect alternative for every customer, at scale?
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Algorithms analyze past purchases, such as previous orders of Moo’s Regular Milk, Latte’s Organic Milk and Latte’s Regular Milk. A customer who most recently ordered Moo’s Organic Milk, which is now out of stock, can be suggested options like Latte’s Organic Milk or Moo’s Regular Milk.
Retailers can notify customers via text of the substituted alternatives. The customer can either accept or reject the substitute in one click. Based on the customer response, the tool can process the correct payment while reducing the number of customer care contacts and returns that need processing.
Of course, if the customer is new, retailers can provide default suggestions. The key is finding alternatives that shoppers will be just as happy with. The simpler and more targeted the process, the better.
Challenges in Implementing Interactive Customer-Facing Tools
The biggest difficulty with rebuilding payment and operational processes to ensure that the correct amount is charged and items are packed, all while still meeting multiple delivery schedules on time, is the dependence on customer responses.
There is a chance that the customer ignores these types of messages and does not interact. That’s why it’s better to start with a minimum loveable product (MLP) and test out your audience’s average response rate. For example, one of Nisum’s clients found that approximately 80% of customers interacted with their substitution tool, and most of these exchanges happened within the hour.
Once you’ve uncovered how customers will interact with your tool, look at the implications of their response rate on the rest of the supply chain. You will need to change how payments get processed to wait for customer responses. And operational changes also will be required so that store associates know to remove items that the customer has rejected before handing off the order.
Ideally, that means presenting substitutes to customers in real time and receiving payments instantly so that the order can be processed and packed. However, you should also be mindful of customers who don’t interact by adding a time limit, e.g. two hours, to process the payment instead of waiting.
Customer Satisfaction and Top NPS Scores
When you give customers the power to choose their own substitutes without making them search the entire website, you minimize frustration and boost brand perception. A well-designed substitution tool that commits to fulfilling customer needs positions you as a brand that cares, even when faced with inventory issues. Customers can choose a suitable alternative or opt out completely.
Missing items are a top reason customers associate stores with negative experiences. However, offering the option to approve or reject substitutions before checkout prevents unpleasant surprises upon delivery. Satisfied customers who appreciate the convenience and control offered by the tool are more likely to become promoters, recommending the store to others. The previously mentioned Nisum client saw its NPS score rise from four to seven (a 70% upsurge) after the implementation of an interactive substitution tool.
The secret to brand loyalty is making customers feel valued and meeting their needs. Allowing them to set preferences for substitutions (e.g., same brand, similar product) ensures they receive items they’ll actually use.
Moreover, providing clear information about substitutions, such as pictures, descriptions and price differences, builds trust and empowers customer decision-making. The tool also can learn customer preferences over time, suggesting increasingly relevant substitutions for future orders.
Retailers are moving away from a one-size-fits-all approach toward a hyper-personalized customer experience. By leveraging MLPs and adapting operational processes, grocery stores can offer substitution tools that empower customers with relevant choices, reduce frustration and boost satisfaction. This translates to a more positive customer journey, ultimately reflected in happy customers who become loyal brand advocates.
Sajid Mohamedy is Nisum‘s EVP of Growth and Delivery, with a successful track record in creating and expanding enterprises. He is skilled in entrepreneurship, marketing analytics, mergers and acquisitions, venture capital and international growth. Mohamedy has a background in management consulting and launched a solar industry startup (Kolibri) before joining Nisum. He is a mentor at UCLA Anderson Venture Accelerator and advises and invests in multiple startups. Mohamedy holds an MBA from UCLA Anderson and dual degrees in Economics and Political Science from UCLA.
