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If we think about businesses that experienced a tremendous increase in demand during the Covid-19 crisis, the first thing which comes to our mind is the online grocery business. Even the stores which were not selling groceries online started using this channel.
Online grocery sales will see more than 300% growth by the year 2023 according to a study by Acosta. This study was done before the lockdown so this figure is only likely to increase more than the study suggests.
According to a study by RedSeer, currently, India’s grocery market size is over USD 500 billion out of which only 0.2% is online. This is the reason why many big players are trying to get into this market like Jio coming up with JioMart or Amazon with Amazon Pantry along with other specialized online players like BigBasket and Grofers.
Many businesses these days are using digital marketing campaigns to reach out to their customers basically for 3 reasons: audience outreach, cost-efficiency, and campaign flexibility provided by digital marketing. Most of the customers are available on the internet these days which makes it a better platform for businesses to target them. Digital marketing campaigns are cost-effective in comparison to traditional marketing techniques and give better results too. It gives you the power to target a specific group of people or a segment according to their demographics and psychographic characteristics. This makes campaigns more relevant and increases the chances of conversion and hence helps you generate more business. The third and most important reason is flexibility. When it comes to traditional marketing techniques, once you come up with a campaign, you cannot go back or change the contents of your graphics or content. But when it comes to digital marketing, there is always a scope of modifying or changing the content. Digital marketing analytics tools show the real-time performance of the metrics defined by us and hence we can see what is working and what is not and accordingly the campaigns can be improvised real-time. This makes digital marketing campaigns agile.
Let us now discuss how digital marketing can help you in growing your online grocery business.
Promotional Campaigns via Digital Marketing
Most of the players in the online grocery business are trying to create a pull by developing promotional campaigns such as promo code discounts, loyalty points, purchase-based discounts, free delivery, etc. Such campaigns promoted via digital marketing help in increasing the traffic to your website and possibly generate more footfall and sales.
Moreover, with the cost-effectiveness of digital marketing over the conventional marketing methods, the benefits can be passed on to customers in the form of discounts and offers, providing a competitive edge over competitors who have not yet shifted to digital marketing. By digitizing the promotional offers/discounts, a personalized experience can be delivered to customers.
Social media marketing can be a great tool for promoting attractive festive and seasonal offers when grocery purchases experience a spike.
We have already witnessed how companies like Amazon, Wal-Mart Flipkart, Grofers, etc. leverage digital marketing to promote their yearly sale events.
Promoting Cross-Selling, Up-Selling and Bundling via Digital Marketing
Bundling is when similar or complementary goods are packaged and sold together at a discounted price. This way you can sell more products at promotional prices making a huge difference in sales and an increase in the perceived value of the items for the customers.
Combining bundling with up-selling or a cross-selling, you can add more value to your offerings. For example, if a customer is searching for a healthy breakfast option on your website and opts for oats, you can cross-sell him a bundle with better options like oats plus protein bars and use promotional pricing. Customers need not visit the store to get to know about such bundled offers. With digital marketing, such offers can be easily communicated to the target audience with a graphic post on social media handles or even a text message.
Digital Marketing to Promote own/private Label Brands with Higher Margins
Selling own/private label brands at pricing lesser than that of other FMCG brands is one of the successful strategies used by many online grocery businesses.
Selling through a private label can give you better margins as it eliminates a huge chunk of marketing, distribution, and other costs associated with merchandising products of big FMCG brands. Also, the demand for decent private label items has increased as they give customers more or less the same value and importantly, at a lesser cost.
According to a study, about 84% of customers shopping at Wal-Mart purchase private label products. With wider margins, such products can also be used under the EDLP model (Everyday Low Prices). According to Nielsen, private label store brands were growing three times faster than the big national brands by Q4 2017.
While developing digital marketing campaigns, promoting private label and high-margin products (under the brand name of your online grocery business) will help in increasing the brand awareness of your online grocery store.
Promoting Delivery Services via Digital Marketing
While most of the players in the eCommerce business promise a two-day delivery, for online grocery stores, this might not be the case. Customers might expect same-day delivery, ideally within hours of ordering. This makes the delivery services a key differentiator for online grocery businesses.
Due to the on-going Covid-19 lockdown, the demand for home delivery of groceries has drastically increased. With an increased number of players in the market, competition has also increased. It is a good time for online grocery businesses to leverage digital marketing to expand their customer base. Digital marketing campaigns highlighting home delivery service feature will attract new customers who are not shopping from outside because of distancing and other safety precautions.
Leverage Social Media Marketing
Having social media handles for an online grocery store will enable its customers to interact with the business, to share their reviews and feedback, and to communicate with other customers. This communication helps in building a base for customer relationship and can be a window to valuable insights and recommendations. Delighted and loyal customers also help in word of mouth promotion. In the long-run, social media marketing can help online grocery stores in customer retention.
We can see a lot of social media marketing campaigns running on Facebook or Instagram as they attract an audience with broad interests and can be very beneficial for online grocery businesses to get leads or generate more sales. There are a lot of platforms that can be used for developing social media campaigns. Some of them are Facebook, Instagram, LinkedIn, Snapchat, Pinterest, TikTok, etc.
Mobile Applications (apps) as a tool for Digital Marketing
Ecommerce mobile applications have become a one-place control centre for customers from where they can search for products, place/cancel orders, make payments, track delivery, etc. At the same time, these mobile apps can also be used for digital marketing.
Mobile apps ensure visibility of a brand to its customers (installed on their phones); a critical objective of digital marketing. These apps also help businesses remain connected with their customers all the time which means that customers can be informed about offers, promotions, new products/services, reminders, CTAs etc.
For an online grocery store, using its mobile app as a tool for digital marketing could mean a lot in generating more business. For instance, an online grocery store that wants to promote its improvised home delivery service could easily communicate the same to its customers (who have the app installed) within a matter of minutes. On the other side, interested customers can place their orders within minutes over the app.
Push Subscription-based Offers via Digital Marketing
Subscription-based models have worked wonders for many e-grocers. The benefit it provides is that it makes routine-shopping easier for customers. With bundling, attractive pricing, and home delivery, a lot of customers’ needs get fulfilled at one go. Marketing subscription offers digitally gives customers the advantage of doing the pre-purchase assessment sitting at home. During physically visiting a store customers are less likely to go beyond their shopping list.
Moving into the future, digital marketing will be an inseparable component of the online grocery store business plan. Whether in-house or with the help of retail grocery consultants or with digital marketing outsourcing online grocery businesses will have to leverage digital marketing for improved sustainability and growth.