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Exclusive: Canadian liquor retailer LCBO upgrades e-commerce with AI

Vanda Provato
Vanda Provato, chief marketing & digital officer, LCBO

LCBO is improving the omnichannel customer experience and preparing for growth with AI-based personalization.

Chain Store Age recently spoke with Vanda Provato, chief marketing & digital officer at LCBO, a crown agency of the Ontario provincial government in Canada. The retailer generates more than $7 billion in annual sales of beer, wine and spirits and operates a network of over 1,000 retail locations including licensed convenience outlets, as well as a significant digital presence. 

LCBO will soon expand, adding more retail points of distribution in grocery, convenience and big box retail, but found its legacy e-commerce platform had become outdated with customers spending too much time searching for products, leading to decreasing customer satisfaction.

Provato explained how LCBO is utilizing the Coveo AI-based e-commerce and enterprise search platform to provide a modern omnichannel customer experience and adequately support expansion of its business.

What challenges was LCBO facing with e-commerce?

Our customers mainly use our website to check inventory and browse or research selections before heading to their local store to purchase. Our digital reach has grown along with our physical presence – we’re now typically getting 1 million weekly site visits.

Wanting to deliver a compelling and seamless customer-first experience, we realized several challenges were holding us back. First, we were operating with legacy systems, meaning we had limited functionality and integration issues hindering the ability to adapt and meet modern demands effectively.

We also struggled with a lack of personalization, which meant we were unable to tailor user experiences based on context or in-session interactions for anonymous users. The inability to leverage loyalty program data for signed-in customers also put us at a disadvantage.

Finally, manual search rules and the absence of machine learning capabilities led to time-consuming and frustrating searches for our customers, who have to navigate a vast product catalog of over 34,000 products. This frustration manifested in lower net promoter score (NPS) and satisfaction ratings. 

Why did you decide to roll out AI-based personalization 

To overcome these challenges, LCBO embarked on a comprehensive modernization effort with the goal of overhauling processes and technology to align with our vision for a more efficient and customer-centric experience. 

Our comprehensive modernization effort began with the customer-facing elements, including the ‘replatforming’ of our website and deployment of Coveo as an AI experience layer for product search and recommendations, with plans to use it for personalization in the future.

We realize that delivering a truly personalized experience is a journey. AI and ML technology is a critical enabler. LCBO is also mindful of the fact that while people value personalization, they also want to protect their privacy. Most visitors to our site don’t sign-in or will use guest check out, so AI needs to work even without personal customer information just based on what the shopperis doing in the session.

[Read more: Insight: The AI Age is here]

 How did you select and implement Coveo?

Having the right search partner is an important part of our digital transformation and vision of simplifying online product discovery and providing our customers with an effortless experience, while enhancing the customer journey both in-store and online.

With two-thirds of our customers engaging both online and in-store, the omnichannel experience is very important to us. This customer segment contributes nearly double the annual spending of single-channel shoppers.

To meet our goals, LCBO needed a partner with deep experience in both business-to-consumer and business-to-business commerce, as well as AI-powered search and personalization technologies that would deliver relevance and make an impact on the bottom line. 

Specifically, we chose Coveo for its ability to unify our data to offer relevant search results, enable predictive search using AI models, enhance our product recommendations, and create a unified search experience across our digital channels.

What have the results been?

After implementing Coveo for business-to-consumer commerce, we’ve seen a significant increase in relevancy and conversion rates, with a 58% increase in click through rate and a 2X increase in search conversion rates. This means customers are finding what they are looking for quickly and effectively. 

As we roll out our new online business-to-business experience this spring, we expect to see a similar performance. And as a result of Coveo’s ML capabilities, we have seen substantial improvement in the search ranking position of desired products, with an improvement in product placement of 16 positions on our product and search listing pages.

Most importantly, the improvements in the search and product discovery have resulted in us being able to better connect customers with the most relevant products from our catalog, leading to a 3% increase in customer experience scores.

Finally, the Coveo platform enables us to glean better insights into consumer behaviors which informs future product merchandising and buying decisions.

[Read more: Direct-to-consumer retailer Blindster boosts search returns with AI]

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