The growth of the online grocery sector was clearly accelerated by the pandemic, with many households trialing and continuing to use online food shops formed by habit during the months of lockdown.
While there was already significant investment and innovation prior to the emergence of Covid, there have been many exciting startups that are either working behind the scenes with the grocers or delivering further consumer services, such as ultrafast delivery solutions for impulse or top-up food shopping needs.
What is less obvious is the emergence of the online grocery sites as media platforms in their own right. There are increasingly a number of opportunities for brands to buy media solutions and target consumers right at the point of purchase as they fill their virtual baskets.
Just being listed across the big supermarkets does not guarantee success, especially online. When it comes to online shopping, people are generally less in a browsing frame of mind compared to when they physically visit a store. Driving new product consideration therefore needs to be more strategically approached.
There are two distinct opportunities for brands to drive incremental sales via online grocers. Firstly, to have an ‘organic’ strategy, which ensures that products are fully optimized for consumer search. This requires brands to have an understanding of how the search algorithms for each of the supermarkets work and which ‘levers’ need to be ‘pulled’.
Having the correct approach to brand imagery content, product reviews and product description can make a huge difference to the visibility of a brand. Ensuring that shoppers can find brands for wider search terms is crucial to driving sales incrementality. So often we find this strategy is overlooked because it’s not understood.
Working with one of the UK’s leading bread manufacturers to drive higher sales on Tesco, Morrisons and Sainsbury’s, we were able to grab the number one search result for one of their biggest competitor’s keywords. This made a significant impact on sales and stole revenue away from the other brand. In the same way that brands create SEO strategies for Google, the same opportunity exists across the online grocery search engines.
In addition, the retailers are increasingly offering brands more creative paid opportunities to drive product awareness across their sites. This can be highly valuable as it is right at the point of purchase. Unlike the more traditional opportunity of sponsoring gondola ends in supermarkets, these solutions offer great measurability and more refined targeting.
Supermarkets know the value of what they are offering from a targeting perspective, especially in the wider context of Google making it more challenging for brands to track and target individuals. So while these paid opportunities can come at a premium, they do offer brands a fast way of building audiences and purchasers for their products.
Just as having a SEO mentality is helpful when it comes to organically optimizing products for the specific retailer algorithm, having a paid search (PPC) and display advertising perspective is crucial to setting up and managing performance with these paid media solutions. For the same bread manufacturer, we were able to deliver a return on advertising spend (ROAS) of £6.84 for every £1 we spent over the campaign period.
This more strategic approach to selling products across the online grocers is still in its infancy for many brands. Our auditing tools allow us to quickly analyze how a brand is performing against its competitors for keyword searches, and it is very common for the largest, better known brands to be performing more poorly than startup brands, which tend to be a bit more digitally aware and less reliant on brand equity.
Online grocery retail will continue to grow at the expense of offline sales, and there will be greater pressure from the supermarkets on the brands to invest more heavily and at a premium across their sites. Having a more strategic approach will in turn become necessary so that the value of this spend is better managed. Brands have an opportunity to get a jump on this and start testing to see what works so that they can plan out more coherent strategies over the next couple of years.
Tony Thomas, head of Digital Shelf, Threepipe