Challenger brands have traditionally been outmuscled in the tough world of bricks and mortar retail. But online grocery presents a level playing field on which these brands can grapple with the market leaders.
The effort required to move the needle can be off-putting for leading grocery brands in an online sector that accounts for just 5% of sales. The gains will look more attractive to challengers starting from a lower base. Already valued at £8.9bn, online is a juicy enough carrot, with the sector set to double in value by 2019.
The strategic opportunity is to try new things, gain learning and become better positioned for a near-term future in which digital natives will expect brands and technology to make shopping easier.
Other factors are encouraging too. Online grocery attracts more profitable customers. Earning more and spending more, they prioritise convenience over price. Also, according to a report presented at last year’s IGD Online & Digital Summit, online shoppers have far greater preference for branded goods.
So why does this low-hanging fruit remain unpicked? Paid-for positions and higher profile slots in the online space tend to be offered to bigger brands enjoying stronger retail relationships.
This works against challenger brands, which have always competed with smarter thinking rather than bigger budgets. The hope for challengers lies in innovation disrupting the status quo, especially when based upon sound research and insight. Here are four strategies for starters:
1. Disruption, disruption, disruption
According to Evolution Insights, 55% of online shops begin with favourites and almost 25% with a list, while IGD findings reveal that impulse purchasing is significantly lower online than in-store. It’s important to disrupt these process-driven behaviours.
Be smarter with search
Search terms are cheaper and provide greater longevity than banner ads. The average grocery shopper uses search 15 times during a shopping mission. Encouragingly for challenger brands, 62% of basket additions are driven by search. So how about your brand appearing when shoppers are looking for the category leader?
Understanding how shoppers search your category and what terms they’re using is essential. Commission your own research or ask mySupermarket. Start engaging those digital natives; they’re on smartphones more than tablets.
Also think about search beyond grocery.com: 74% of shoppers research groceries online pre-purchase, according to Nielsen. You should also marry the right content with search to complement consumer behaviours. 46% of people look online for meal inspiration. If you’re a food brand, are you whetting their appetites?
Leverage special offers
Nearly half of shoppers visit the special offers feature at the end of their shop to check for swap-and-save opportunities. If you’ve an offer that’s demonstrably better than those of the competition, make sure you’re there.
Set reminders at checkout
The majority of shoppers spend a considerable amount of time reviewing their basket, removing or adding items before checking out, according to Evolution Insights. Checkout feature offers cost significantly less than home page offers – good value and great positioning at the moment of purchasing truth.
2. Curate customer reviews
Don’t wait in hope of favourable reviews. Make it happen.
Reach out to your database or Facebook advocates. Encourage them to talk about your product, incentivising comments posted in the online shop. IGD found that rewards can entice 46% of shoppers to make recommendations.
3. Improve product imagery and information
A 2014 study by GS1 showed that 42% of UK consumers abandon a purchase for lack of product information. Other research suggests that shoppers think products are out of stock if information is missing. So include your product’s features, sizing, ingredients and so on.
The same applies to images. IGD’s ShopperVista research revealed that 66% of shoppers want an improvement to images and 30% want pictures of the product as well as the packaging. Simply including a picture of a beer bottle next to the case can boost sales.
While Brandbank has central control of images, most things are possible. You will need retailer buy-in though, and a knowledge of policy. Sainsbury’s, for example, welcomes inspirational lifestyle images. Would your product look better on the plate than the pack?
4. Test digital content initiatives
While only 6% of shoppers add items onto shopping lists using scannable codes or ads, 22% claim they’d like to. Expectations for seamless, tech-driven grocery shopping are rising.
Much of the technology is new, with providers jostling to be the next big thing, which means opportunities for low-cost collaboration. Where brand leaders are wary, the challengers should step in.
Finally, hire or find yourself an online shopper champion. There are no silver bullet solutions, but your champion can maintain the focus and continuity you will surely need.
Sal Thomas is creative planner at Blue Chip
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