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CPG Media Buyers Ready for Online Grocery Shopping to Boom

  |  April 29, 2010   |  Comments

How are you preparing for the shift to online grocery buying? Here are some ways you can and things you may have already done to optimize for the shift.

Part of being a successful media buyer is remaining ahead of market trends. Typically, a shift in consumer behavior requires a shift in media strategy. Well, here's some good news for buyers and planners with consumer packaged goods (CPG) clients: we're on the cusp of a major behavioral shift, but research suggests you're probably already optimized for it.

There's no question that the online shopping industry has had a few false starts (you may recall that it was the upcoming trend more than 10 years ago), but signs suggest that a tipping point is close at hand. In fact, it's difficult to imagine why more of us haven't already traded in our reusable grocery bags for Peapod.com, Door to Door Organics, or one of dozens of others. In addition to being a "green choice" by reducing one's carbon footprint, grocery shopping online can be convenient, cost-effective, and save time.

Whether they realize it yet or not, this may be just what consumers are looking for. Nielsen says that 38 percent of American grocery shoppers consider it a chore, and about 30 percent of grocery items are purchased on a deal. Market research firm Synovate found a similar mentality in the consumers it surveyed for its global study on grocery shopping; 60 percent of grocery shoppers across 10 markets would "go out of their way to shop green," while 36 percent just want to "get in and get out." And although just 1 percent of global consumers surveyed already buy their groceries online, 42 percent said they would do so if they could be assured of a high level of security and a high quality of food.

Then there are companies like Alice.com, which sells household products ("essentials" like trash bags and toilet paper) directly to consumers from the manufacturer - over 150 of them so far - instead of requiring them to purchase from a retailer. Although this company is only a few months old, its cost-saving formula and automated coupon and smart reminder features will surely resonate with busy, price-conscious consumers.

When this industry really takes off (and it will), CPG companies will have some added pressure on their hands. Not only will they have to ensure that their brands stand out for consumers in-store, but that they're top of mind when potential customers are about to make their weekly virtual grocery run.

Already, CPG products ranging from cookies to canned peas and toothpaste to tissues are being promoted through banner ads, paid search, microsites, and coupons, and CPG advertisers have been increasing their online ad spending in recent years; Nielsen last year reported that CPG companies upped their display spending by 57 percent from 2007 to 2009. The value of that investment is being extended to online grocery shoppers, according to a new study from ad network and technology company Burst Media that has found online ads influence the purchasing decisions of consumers who shop for groceries online.

The report states that online ads "frequently" influenced nearly a third of men and women, and "sometimes" influenced 43 percent of both genders. This is particularly true for household cleansing products and boxed or canned goods; online ads influenced 71 percent and 65 percent of consumers buying these products, respectively.

If buyers do anything to modify their existing creative to specifically target online grocery shoppers in the months and years to come, they could consider incorporating more coupons. As Burst - which works with such CPG brands as Welch's, Chantix, and Orajel - suggests, the Web provides an ideal opportunity to target coupons by geography, demographic, and behavior. Most online grocery services accept manufacturer coupons, and these could go a long way in influencing a sale.

As this trend continues to build, we're also likely to see brands experimenting with retargeting to locate Internet users who spend a lot of time on online grocery sites, or behavioral targeting to serve display ads to primary household shoppers, like moms. Specialized coupons or messaging about the convenience of buying their products online may help to boost online sales.

It may be some time before the majority of consumers make such a dramatic change to what amounts to a life-long habit, but when they do - and as they do, little by little - CPG advertisers will be ready. One thing is for certain: it won't be another 10 years before reaching online grocery shoppers becomes a critical objective of CPG media plans.


Tessa Wegert

Tessa Wegert is a business reporter and former media strategist specializing in digital. In addition to writing for ClickZ since 2002, she has contributed to such publications as USA Today, Marketing Magazine, Mashable, and The Globe and Mail. Tessa manages marketing and communications for Enlighten, one of the first full-service digital marketing strategy agencies servicing such brands as Bioré, Food Network, illy, and Hunter Douglas. She has been working in online media since 1999.

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