Today, eGrocery accounts for 2% to 4.3% of overall grocery sales, but is expected to hit 20% by 2025. That will account for $100 billion in consumer sales. Expect the growth to feel similar to the e-commerce explosion that transformed the beauty and retail industries in recent years. With eGrocery, however, there is a distinct shopper journey from discovery to purchase.
Over the past year, MikMak has helped a number of popular food-and-beverage brands transition their marketing strategies to optimize for the coming e-commerce revolution. During that process, we’ve learned valuable lessons about how consumers discover grocery items online, and developed best practices for dealing with the unique challenges in the industry, like razor thin margins, fast-moving inventories, and the lack of customer data when selling at third-party retailers.
We’ve found that there are two ways consumers are finding your grocery brand. One is discovery—they’ll find your content on social, or perhaps see a recipe online, then make a purchase decision. The other is through online search. That’s where consumers are browsing for products, so think of search as the modern-day store shelf. Consumer behaviors are so strong that more than half of all grocery sales today are influenced by digital—and the majority use digital for browsing and researching products. Those informed customers drive a 27% lift on transactions and a 36% lift on basket size.
Online grocery is far different from other industries. Inventory sells out quick. Margins are thin. Consumers want to purchase products at their main eGrocery, not a direct to consumer website, which makes first-party-data hard to come by for brands. New technology like MikMak provides brands with software that solves these problems. Here are four common challenges in the eGrocery industry and easy ways MikMak solves them for brands:
Challenge 1: Inventory
Grocery products sell out, making inventory management difficult. Brands launch media campaigns and the products featured are out of stock, it’s wasted media impressions. With MikMak, you can only allow add-to-cart functionality for products that are actually in stock. That means customers never get out-of-stock messages for the products they desire.
Challenge 2: Margins
Your margins are getting slashed. Margins are really tight in eGrocery, so selling just one or a few items online won’t be beneficial. Since consumers purchase multiple grocery products at the same time, they need the ability to build baskets. With MikMak Attach, consumers can add multiple items in one click and build their shopping lists. Perhaps they see a recipe containing 17 items. They can easily add all the ingredients to their basket which instantly increases the overall average order value.
Challenge 3: Data
For far too long, grocery brands couldn’t cash in on the data revolution because their products were sold by third-party retailers. When brands drove traffic to those environments, they only knew three things: impressions, clickthrough rates and overall sales. They didn’t know anything that happened after that click or swipe up, putting them at a serious data disadvantage.
Have your pixel sit in a MikMak experience so you can build a qualified shopper audience to use in your future prospecting or retargeting media. By understanding the behaviors consumers are exhibiting around your product, you can plan far more targeted marketing efforts and make better informed choices on what content is actually converting.
Challenge 4: Loyalty
Online grocery customers want to shop at their favorite stores. If your customers shop at Whole Foods, let them shop at Whole Foods. If they shop at Target, let them shop at Target. Having multiple shopping cart integrations will entice consumers to actually complete their purchase journeys. In fact, MikMak brands have seen a 4x lift in add to carts when giving shoppers the power to choose their preferred retailers compared to just offering one cart option.
Pepperidge Farm partnered with MikMak to get more eyes on its popular Goldfish snacks. To enable frictionless shopping amongst influencers supporting their back-to-school and holiday campaigns, Pepperidge Farm used MikMak Attach to identify which influencers drove the strongest conversions to retailers like Amazon, Target and Walmart. The brand learned there was an 11x conversion difference among influencers, allowing them to reallocate spend towards the top-performing influencers in future campaigns. It also allowed the brand to control the data at the product page level even though they didn’t own the e-commerce cart.
Consumers have exhibited a dramatic behavioral change from buying groceries in-store to buying online—and they're fueling exponential growth in eGrocery. In this wide-open playing field, brands with progressive marketing strategies will have the best chance at success. Early adopters will turn compelling social posts into tangible sales. Grocery brands will finally gain valuable consumer data despite being sold in third-party retailers. They’ll fight thin margins and delight customers with online basket-building technology.
But don’t wait. As more and more people buy groceries online, cost-per-acquisition will rise and the industry will become more noisy. Now is the time to embrace social commerce and take your grocery brand to the next level.
Lead image: Lina Kivaka/Pexels