Digital Marketing in Food and Grocery: The Shopper Perspective

Most of us are familiar with digital marketing in some form or another. Put simply digital marketing is the marketing of brands and retailers to consumers using digital media.

Digital media itself encompasses all forms of communication that are delivered using a binary electronic format, utilising technology such as computers, mobile devices and screens. It lies in contrast to traditional forms of mass media such as analogue radio and television, print (newspapers and magazines), signs and banners.

So what is digital shopper marketing and why is it different? Well, we know that ‘traditional’ shopper marketing focuses on marketing actually in the retail environment. Initiatives seek to target the consumer in shopper mode while they are in the store, and are designed to influence their decision making process up to the point of purchase. So in one sense, digital shopper marketing is just the use of digital media – rather than traditional media - for in-store marketing.

But opportunities for shopper marketing are not necessarily constrained to the store environment – consumers often enter into the shopper mind-set before they enter the store, and increasingly decide what to buy when at home or on-the-go. This is where digital media really comes into its own. While traditional marketing outside the store more often than not targets consumers with brand marketing designed to build awareness, digital marketing allows marketers to deliver personalised content to shoppers at home and on-the-go - designed to directly influence their decision making process or deliver a call to action.

 

 So it’s all about facilitating a greater number of touch points with the consumer in shopper mode. This is why the advent of the internet, smartphones and mobile commerce are particularly important. Yes, digital shopper marketing also relates to static digital media in-store such as signage, screens and kiosks. But it is the arrival of mobile internet connected devices that introduces the real opportunity for FMCGs and retailers - the opportunity to more readily communicate with consumers as shoppers before, during and after their visit to the supermarket.

 The Future is Mobile

In our latest survey of 1,546 UK grocery shoppers (August 2010), we found that an overwhelming 96% now own a mobile phone, with over half saying they are using it for ‘an increasing number of tasks’. Moreover, more than 1 in 3 own a smartphone! This brings mobile applications and internet connectivity well and truly into the mainstream.

And as smartphone penetration has increased so internet connections via mobile phones have become increasingly common. As of 2008 there were more 3G mobile connections per 100 population than home internet connections. 42% of UK grocery shoppers now say it is important for them to be able to access the internet using their mobile phone.

Granted, current ownership of smartphones is heavily skewed towards younger shoppers. But we expect significant growth in penetration among a broader demographic over the next two years as the technology becomes even more mainstream and prices fall. With the typical mobile phone contract lasting just 24 months, we forecast that well over 50% of UK grocery shoppers will own a smartphone by the end of 2011.

Importantly, as smartphone penetration rises, so does consumer interest in their use for shopping. Our research also finds that ownership of smartphones is actually a key barrier to appeal of digital shopper marketing initiatives in grocery among many shoppers. Shoppers are often unable to comprehend the benefits of initiatives without prior exposure. Appeal among older generations is for example significantly greater among those who do own smartphones. And when initiatives are presented to shoppers in terms of the benefit they provide - rather than the technology they use - only 36% of 45-55 year olds say they would not consider their use. The stage is well and truly set for an explosion into the mainstream over the next two years.

The Shopper Perspective on Digital Shopper Marketing

So which digital shopper marketing initiatives appeal to grocery shoppers? Which are they aware of and currently using? Where are the opportunities looking forward?

Well, it is perhaps no surprise that web based initiatives, in particular web coupons, come top of the pile when it comes to current awareness and usage. Nearly 40% of UK grocery shoppers say they use web coupons for grocery shopping. Shoppers find these types of initiatives easy to use and will typically acquire coupons directly from manufacturers or by searching particular websites such as myvouchercodes.co.uk.

Nearly 1 in 4 also visit price comparison websites. Companies like comparethemarket.com and moneysupermarket.co.uk have helped open shoppers’ eyes to the potential to compare prices. Websites like mysupermarket.co.uk actually allow shoppers to compare their grocery prices.

Importantly, despite the significant rise in smartphone penetration and mobile internet in recent times, mobile grocery shopper marketing initiatives remain in their infancy in terms of current awareness and usage. It is not until initiatives are presented to shoppers in terms of the benefit they provide that we are able to measure the appeal of these initiatives - and identify the strongest opportunities for growth.

 Indeed shopper appeal tells quite a different story to current awareness and usage. Not only is there evidence of notably higher appeal than current usage, highlighting short term potential in line with smartphone take-up - there is also a notable shift in favour of mobile initiatives.

Initiatives that range from barcode scanning and mobile shopping lists apps to mobile coupons and price comparison all score over 30% - representing a strong level of appeal among more than 1 in 3 of all grocery shoppers.

It is particularly interesting how initiatives that offer shoppers convenience score highly. Shoppers want solutions that make their life easier. Initiatives such as smartphone apps that enable shoppers to add items to their list or online basket therefore demonstrate great potential for marketing, for example through exclusive money off coupons, suggested alternatives and complements.

The conclusion is clear. While web coupons and price comparison are here to stay and command the highest usage and appeal, the opportunity for growth in mobile shopper marketing is huge. We expect usage of mobile shopper marketing initiatives across the spectrum to improve significantly over the next 12 months, in particular as retailers and FMCGs launch and support new initiatives and smartphone ownership improves.

 In Summary

Digital media presents the opportunity to unlock the true potential of shopper marketing, enabling marketers to deliver personalised content to consumers in shopper mode - at home, on-the-go and in-store. With smartphone penetration set to snowball, we believe the industry is on the verge of the tipping point. Brand manufacturers and retailers take note, today is the time to invest in your digital shopper marketing strategy, not tomorrow.

Evolution's research into digital shopper marketing investigates the shopper perspective across a range of initiatives in food and grocery, including digital coupons, loyalty schemes, shopping lists and product information. Through quantitative and qualitative research, we explore awareness, usage and appeal among UK grocery shoppers; barriers to adoption; and investigate shopper preferences relating to key topics including personalisation, push versus pull delivery, location based delivery and the role of FMCGs.

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