The Vertical Approach to Grocery Marketing

Share this:

This post is the latest in our “Vertical Challenge” series. It’s our editorial focus for the month of October, including topics like vertical-specific strategies and the pros and cons of zeroing in on local business categories. See the rest of the series here

We don’t all exercise in boutique fitness studios or purchase luxury cars, but we all have to eat, and that means grocery—both online and offline—is a massively important industry for local marketers.

More than just a niche market inside the retail vertical, grocery marketing has grown to become an industry unto itself. According to eMarketer, grocery is the “least penetrated but fastest-growing category” in e-commerce. Explosive growth, fueled in part by the rising popularity of online grocers and on-demand delivery services, like Instacart, that deliver goods from brick-and-mortar stores, is behind the prediction that the grocery retail market will reach $12.24 trillion globally by 2020.

CPG brands and supermarket chains have been quick to adopt vertical-specific marketing platforms and tools. Although there are plenty of local retail marketing solutions that could be adaptable to the grocery industry, the supermarket itself is a unique environment and that makes verticalized solutions even more desirable in this arena.

Mobile marketing vendors like inMarket, which creates experiences designed to drive campaign ROI for top brands, are evolving their in-grocer mobile advertising programs to take better advantage of the role that the supermarket plays at the epicenter of consumer decisions.

“The days of the inky circular are gone, and consumer eyes are firmly glued onto our phones—in fact, 80% of consumers use their phones while shopping,” says inMarket CMO Cameron Peebles.

Even though grocery could be considered a part of the retail space, the approach that local marketers and CPG brands use to connect with shoppers is very different. Vertical-specific platforms operating in the grocery space are more likely to connect with individual shoppers via push notifications and text messaging. They’re also more likely to send highly-targeted offers, often based on a shopper’s in-store location.

Consumers are more comfortable receiving these types of real-time offers when they’re inside the supermarket, in part because they’re more accustomed to using coupons in the supermarket than in other retail environments. Newspaper circulars have been priming consumers to use coupons for years. Now, mobile marketing is just taking that same concept and bumping it up a few notches.

Supermarkets are more likely to have standard layouts, with straight aisles that make for more accurate location targeting. That makes it easier for brands to send real-time offers as shoppers near the location of their products. For example, a CPG brand like Kellogg’s can send coupons to shoppers’ phones as they enter the cereal aisle.

Shoppers in supermarkets are also more likely to be looking at their smartphones while they shop than shoppers in other environments. Millions of consumers have downloaded grocery shopping list apps onto their smartphones, and many of these apps even connect to users’ smart watches and voice controlled assistants. These types of apps give marketers additional opportunities to connect with shoppers in-store. Verticalized marketing platforms that work primarily within the grocery industry usually have a better understanding of how these apps work, and how best to take advantage of their location features, than more general purpose marketing solutions.

“Mobile technology has become ubiquitous in our lives, and consumer behavior inside the grocery store has shifted as a result. We use our phones as an assistant or companion when we shop,” says Peebles. “inMarket has been a leader in the location-based mobile ad space for 10 years now, and we’ve always viewed the supermarket as an extremely powerful place for brands to reach consumers.”

Despite the advantages that make grocery an ideal environment for mobile marketing, Peebles cautions that there are some factors that make it more challenging to run mobile campaigns inside large supermarkets, compared to other retail environments. Chief among these are “overstimulation and decision fatigue.”

“There are tens of thousands of products in the typical supermarket. All of those brands are competing for attention—through shelf placement, end caps, deals and of course now through mobile,” Peebles says. “Additionally, engaging users at grocery is extremely time specific. People’s shopping habits form very specific patterns, and reaching shoppers as they enter a parking lot or store is extremely important.”

inMarket offers things like “category exclusives,” so its clients’ offers can cut through the clutter. These types of features are what help verticalized platforms differentiate themselves, and one of the reasons why the mobile marketing space is seeing so much specialization right now. Despite ample growth in the space, Peebles expects to see consolidation from adtech vendors in the coming years, particularly those vendors whose technology is not as accurate as it should be.

“Providers that are able to sense the optimal moments for consumers and respond with two-way open and helpful dialog are going to be the ones who produce the highest campaign ROI …. The ones that can weave real-time, seamless experiences across both physical and digital channels and then measure the effectiveness of those efforts down to a purchase will be the big winners,” he says. “These are the ad platforms that will rise to the top for CPG and grocery brands.”

Stephanie Miles is a senior editor at Street Fight.Rainbow over Montclair

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.