The Online Grocery Surge: Recipes for Success

Before we explore a few recipes for success, it’s important to understand the significance of what is happening in the online grocery space.

For example, in March alone Walmart grocery app download was up 160%, while food delivery app downloads cooled, “as consumers realized the expense of ordering food compared with home cooking, & because some consumers view restaurant delivery as not being as safe as cooking at home.”

How big is this shift in spending?  Winsight Grocery Business predicted in March that up to $118 billion in restaurant sales will shift to food sales in 2nd Qtr. alone.

What about cart size? Even before COVID, the average OG shopping cart was $123, compared to the average brick and mortar cart of $49.3   Since March, online carts are now 5X LARGER than typical in-store carts.

As we shelter in place, we’re cooking at home more often

It makes sense that as we ride out this quarantine, more of us are eating at home.  In fact, almost 1/3 of Americans are spending more time cooking at home.5  The demand for groceries, especially pantry items, has increased significantly: 37% for dry beans, 31% for canned meat and 25% for rice, for example.

RECIPE FOR SUCCESS: SHOW UP AT THE RIGHT PLACE. Recipe apps & sites are seeing a huge boost in site traffic as more people are cooking at home. Consider delivering your ads across a whitelist of premium recipe apps and sites. And don’t forget, capture this audience and re-engage frequently through retargeting across ALL the devices in the home. Shoppers are spending 50% more time in the kitchen and on recipe apps – so join them!

Online grocery, which had been growing at a rapid pace, has spiked dramatically since CO1VID 19

Online grocery adoption was growing quickly before the COVID crisis, and the growth curve has steepened.  In March, Walmart, Instacart and Shipt saw dramatic increases in downloads for their grocery and delivery apps.  All this while retailers are scrambling to keep up with pick up and delivery orders.  WM, Amazon, Kroger, Albertson’s and others are in the midst of a hiring spree, adding as many as 500,000 new employees to meet growing demand.

RECIPE FOR SUCCESS: SHOW UP AT THE RIGHT TIME. This is the perfect time to be present. Newcomers to online grocery shopping are ‘re-learning’ their entire shopping experience. They are in fact, more than ever, open to new ideas and products. Simply put, this is not the time cut advertising dollars. Rather4, it’s a rare opportunity to win big market share!

The surge in online grocery is driven in part by new OG shoppers

It’s important to note that the surge is largely driven by shoppers who are new to OG. We also need to understand the context in which these shoppers are adopting.  They’re coming on board when the OG experience is not optimal, with 20-30% out of stock items and delayed pick up and delivery dates.  It’s important how your brand introduces these shoppers to OG.  As you roll out OG shopper campaigns, make sure to have an Out of Stock alternative, for example.  Understand that many shoppers have a stock up mentality, so offer choices like value size, twin packs, BOGO, etc.

RECIPE FOR SUCCESS: SHOW UP TO THE RIGHT AUDIENCE. Today’s OG shopper has moved well beyond ‘MOMS with kids at home’ and It’s time to expand your target demo. In fact, you can argue that that with 75% of the country talking shelter, everyone who regularly visits a grocery store is a high-potential OG customer today. Consider A/B testing your campaigns with segmented shopper profiles – then SAVING their mobile ID’s in separate audience containers for re-messaging. Mediavision2020 can help you build your own custom OG shopper mobile ID database.

Once these new shoppers adopt OG, there’s no going back to “normal”

The key takeaway is that these new OG shoppers are not likely to revert back to brick & mortar shoppers after the crisis is over. “We expect this unfortunate period to accelerate structural changes in consumer shopping for five or more years, as people are introduced to new shopping methods like online grocery & curb side pick up.”

So, there are three good reasons your brand should lean into OG now –   grocery shopping is forever changed!  How your brand adapts to this new reality now will affect your position as the COVID crisis fades.

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