Top 10 marketing strategies for your online grocery marketplace
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Much has changed since the pandemic, including how people buy their groceries. However, the shift in consumer behavior towards online grocery shopping has not been gradual. Many grocery stores opted for quick solutions, including partnering with grocery delivery apps such as Instacart or Peapod to address the uptick in demand for online grocery shopping. Such partnerships have proved a practical and convenient marketing strategy for grocery stores only for the short term.
This blog is a walkthrough of the latest trends in online grocery eCommerce and astounding online grocery marketplace trends. You will also learn to promote online grocery stores with strategies for a successful online grocery marketplace. Furthermore, you will also learn about revenue channels in online grocery marketplaces and buying behaviors in the USA, Europe, and Southeast Asia. Lastly, you will also discover the future of online grocery shopping.
Table of contents
- Online grocery marketplace: A significant shift from traditional grocery shopping
- Trends in online grocery eCommerce
- Online grocery marketplace trends: Buying behaviors in the USA, Europe, and Southeast Asia
- Top 10 marketing strategies for a successful online grocery marketplace
- Revenue channels for your online grocery marketplace
- Conclusion: Is online grocery shopping the future?
Online grocery marketplace: A significant shift from traditional grocery shopping
The online grocery marketplace witnessed a breakthrough during the pandemic. The pandemic has increased the demand for placing orders online by 76% on online grocery marketplaces. Online grocery marketplaces allow customers to save time and money without worrying about social distancing. Grocery stores realized the power and potential of the internet and online businesses during the pandemic, breaking the barriers of conventional selling methods. With an effective marketing strategy for grocery stores, grocery retailers have doubled their sales.
The US is witnessing an all-time high in pickups and delivery orders compared to pre-pandemic levels. Food retail businesses and online grocery marketplaces compete to retain and gain their share of the market, even offering lower commission rates to grocers for exclusively partnering with them.
Online grocery stores can capitalize on how to improve online grocery shopping solutions by positioning their eCommerce store at the center of the multichannel marketing strategy for grocery stores. Having a presence on online marketplaces can help you expand and cross geographical boundaries. Once on the marketplace, your grocery business reaches a wider audience base.
Find out how we can help you set up your online grocery business.
An online grocery marketplace is an entrance to the unconventional grocery shopping experience in this ever-changing eCommerce environment, with the pandemic as the catalyst. Furthermore, grocery businesses gain the advantage of operational efficiency, scalability, and profitability with a presence in an online grocery marketplace.
Trends in online grocery eCommerce
The pandemic has caused a significant shift in customer preferences, from what they buy to how they buy their groceries. According to a report from McKinsey & Company, here are the top consumer trends in online grocery shopping trends that will shape the future of grocery shopping.
1) The rise in online grocery shopping is here to stay
Despite consumers and eCommerce businesses reverting to the pre-pandemic shopping norms, shoppers continued shopping groceries online. According to a survey conducted by McKinsey and Company, almost 50% of consumers surveyed indicated that they purchase groceries online at least once a week. The survey represents a ‘new normal’ for online grocery shopping. Furthermore, more consumers are using eCommerce to stock up on their weekly and monthly grocery needs and shop groceries from a physical store. More than half of these consumers surveyed spend more than $100 per online-grocery transaction.
2) Most of the online demand is coming from fresh and frozen food categories
In the last year, shelf-stable categories such as household care, snacks, personal care, and packaged foods led the most share of a significant increase in all online grocery eCommerce sales of all categories. Furthermore, categories such as dairy produce, fresh meat, and frozen food that didn’t receive much traction earlier saw a significant increase in consumers’ willingness to purchase online. The convenience of buying groceries has made customers stick with the trend long after the pandemic is over. According to the same McKinsey report, 55 percent of consumers in China said they would prefer to buy more groceries online after the pandemic.
3) Customers have numerous options, while online grocers don’t
With more grocery businesses adapting to the online shift, consumers have more options than before. Despite the available options, the user experience offered by an online grocery marketplace has become a driving factor in deciding where to shop. Furthermore, it’s a crucial consideration point for traditional grocery stores planning on moving online. Consumers’ online grocery shopping journeys have two primary driving factors: ease of use and access to information when required. Moreover, an online grocery marketplace allows consumers to make quick selections and checkouts and even reorder their past purchases.
Online grocery marketplace trends: Buying behaviors in the USA, Europe, and Southeast Asia
Let’s look at online grocery shopping trends since the pandemic and how buying behaviors have changed in the USA, Europe, and the rest of the world.
Online grocery shopping trends and statistics
- A report on online grocery shopping suggests that online grocery sales shall reach $129.72 billion by 2023.
- Furthermore, the same report suggests that the speed of online purchase and delivery of groceries and the fact that it saves time is the primary reason for 53% of consumers purchasing groceries online. About 50% claimed that online grocery shopping is more convenient. Meanwhile, 31% of consumers said that online grocery shopping gives them access to more products.
- Other reasons for switching to online grocery shopping include saving money (20%), availability of a wide range of products (19%), and storing shopping lists (17%).
- Furthermore, the same report suggests that millennials lead the way in online grocery shopping at 47 percent. While 31% of GenX shoppers, 19% of Baby Boomers, and only 4% of consumers from other generations do the same.
Online grocery marketplace and shopping trends in the US
Americans spend over $750 billion on groceries a year. The figure suggests an excellent opportunity for grocery retailers planning to enter the online domain. Furthermore, the internet shall become the primary source of buying groceries for 147.4 million Americans by 2023. Grocery market share in the United States shall experience an increase of $35.6 billion by 2023.
Online grocery sales will increase by 149% by 2023. As the coronavirus outbreak drove consumers to purchase online, Walmart Inc, America’s largest grocery retailer, witnessed a 74 percent increase in eCommerce sales in the first quarter. However, Amazon leads the way in online grocery shopping, with 62% of all consumers purchasing food and drinks through the platform.
Furthermore, 58% of male and 68% of female online shoppers use AmazonFresh, Amazon Pantry, and Amazon Prime Now as primary channels. Amazon is also popular across all age groups. Almost 68%, 64%, and 51% of consumers aged between 18-34, 35-54, and over 55 use the platform to buy food and beverages.
*If not mentioned otherwise, all data has been taken from the same source.
Furthermore, online grocery shoppers in the US went up from 43 million to 45.6 million, according to survey data from online grocery consultant Brick Meets Click (BMC) and grocery ecommerce platform Mercatus USA Inc.
Online grocery marketplace and shopping trends around the world
Once the pandemic set in 2020 worldwide, the online grocery marketplace saw a substantial increase in people buying food and other essentials online. According to Kantar Group, the ecommerce share of the grocery market was cumulatively 12.4% across China, France, Spain, and the United Kingdom, by the end of 2020. Moreover, China also has the largest sales value for online groceries anywhere globally at $178 billion.
During the lockdown, 28 percent of Europeans living in urban areas used online shopping as the main channel for buying groceries. It’s an increase of 10 percent compared to before the pandemic. Furthermore, 80% of Europeans who purchased groceries online will continue purchasing groceries online during the pandemic.
“COVID-19 has not only accelerated the conversion of new online shoppers, but it has convinced a large majority to continue to purchase online,” says Stéphane Roger, global shopper and retail director at Kantar Group.
Let’s deep dive into the top 10 marketing strategies for a successful online grocery marketplace in the section below.
Top 10 marketing strategies for a successful online grocery marketplace
The online grocery marketplace has become a popular option for grocery retailers to expand their business online, gain new customers, and quickly adapt to changing trends. We have compiled a list of the most effective strategies for a successful online grocery marketplace and store.
1) Identify your target audience
Identifying and analyzing your target market makes the first step for all marketing strategies. Your marketing campaigns won’t get the desired results unless you understand your target audience. Gather information about your target audiences’ lifestyle, demographics, age, gender, location, interests, etc. It can help you understand which segment needs the most attention and which segment can be shifted back on the shelves for a while. Identifying your target audience will help you create a strong brand message with effective communication channels.
2) Devise an effective SEO marketing strategy
Some of the most popular and effective SEO marketing strategies include industry-specific keyword research, interactive user interface, faster-loading web pages, well-optimized content, and site optimization via on-page SEO. Moreover, other SEO strategies you should invest in include regular site audits, building quality backlinks via off-page SEO activities, and more. You can also set up a blog for promoting your online grocery store with keyword-specific content implementation. A content marketing strategy for grocery stores focusing on developing a competitive marketing plan should help. Furthermore, make your online grocery marketplace site responsive and optimized for mobile users.
3) Give your customers the information they need
The more information you share, the more you empower your customers to make better, informed decisions. The pandemic has left consumers toggling between different brands to get what they need during a crisis. Sharing substantial and credible information with your customers to ease their purchase process can go a long way when they have to make brand swaps. As the owner of an online grocery marketplace, you can share the following information with your customers:
- Dietary considerations on product pages for food
- Ingredients for non-food items
- Tagging items as ‘gluten-free’ or ‘sugar-free’ for online shoppers to easily search and find products they are looking for.
- Other information that might make the purchase decision easier and quicker
4) Offer ease of shopping to your online grocery shoppers
Similar to other marketplaces, it’s equally important for an online grocery marketplace to create an online shopping experience and presence that speaks of simplicity, flexibility, and convenience. The user experience provided by an eCommerce business is equally important as its products and services, believes 79% of consumers. For instance, allow your customers to collectively select and purchase all ingredients for the recipe you shared on your blog. Furthermore, you can also allow your customers to save their purchases as a grocery list. It will also enable them to use it again next time instead of selecting all items from scratch.
5) Simple and flexible online experience
An easy-to-use interface and flexible online grocery shopping experience can help your grocery business stay ahead of the competition and meet customers’ demands. With the unknown looming since the pandemic, an online grocery marketplace must plan to scale quickly and strategically. Providing an omnichannel experience for online grocery shoppers has become imperative more than ever before.
6) Brand positioning of your online grocery marketplace
Brand positioning, an aspect of brand building, is essential for all businesses to stand out, gain new customers, retain existing customers, and more. Eventually, brand positioning can help your online grocery marketplace scale up and establish a brand presence and reputation. Furthermore, other aspects of brand building include brand evaluation, brand personalization, and brand promotion. Here are some steps you can take to position your online grocery marketplace in the grocery eCommerce space:
- Analyzing your customers’ behavior and implementing the results
- Building trust online and offline
- Find local brands to collaborate with your eCommerce business
7) Offline marketing for an online grocery marketplace
It’s not just online marketing that has changed. Offline marketing has also taken a turn since the start of the pandemic. Most retail grocery businesses don’t include offline marketing in their marketing strategies for the online grocery marketplace. However, including both channels for marketing or going multichannel can help your grocery business gain customers from places you didn’t think possible. Here are some tips for implementing offline marketing strategies in promoting your online grocery marketplace:
- Promote with home delivery facility
- Build and establish a community presence
- Advertise in a local newspaper
- Distribute free samples
- Sponsor events in your local community
8) Socialize your online grocery marketplace
Most people spend most of their time on the internet, surfing through different social media platforms. You should capitalize on the opportunity by positioning your brand where your customers are. If your grocery business is not social, your online grocery marketplace lag behind the times. Some ways to attract customers to your eCommerce grocery business include the following:
- Creating rich social media content that aligns with your brand
- Perform regular social media audits of your brand
- Run engagement polls and campaigns
- Collaborate with influencers to promote your brand
Furthermore, there are some points you should consider before you execute your social media strategy for grocery stores or marketplaces.
- Choose a relevant social media platform
- Share content that aligns with the social media platform
- Run social media ads and campaigns
- Experiment with a few social media strategies for grocery stores
9) Experiment with your brand new approach
If the pandemic has presented businesses with challenges to sustain and scale, it has also enabled businesses to experiment and adopt new marketing approaches. Grocery retailers are at a stage where they can test unproven concepts and strategies. Furthermore, they can switch between different approaches easily and quickly. Customers and businesses alike are getting the hang of these unprecedented times. If customers have become more demanding, they have also become more accepting of the current situation.
“Consumers right now as a whole recognize that this is unprecedented, and they’re being pretty patient with everything not working perfectly with their e-commerce grocery order,” says Joel Rampoldt. He is the managing director of AlixPartners, which helps grocery store operators navigate change and risks.
Furthermore, the greatest risk for grocery retailers does not lie in experimenting with new approaches. It lies in not adjusting to changing customer demands, behaviors, and trends.
10) Integration of core online grocery experience with online grocery marketplace
An online grocery marketplace is shifting from the traditional grocery retail business model. You will have to adopt an ecosystem approach to meet the requirements of your buyers, sellers, partners, and business. Furthermore, you should treat your online grocery marketplace as an integration of the eCommerce grocery experience instead of taking a stand-alone approach.
Launching your online grocery marketplace as a separate business can introduce friction in the purchase process. Furthermore, you might have to develop an effective and successful marketing strategy for grocery stores and online grocery marketplaces from scratch. Successful online grocery marketplaces incorporate third-party services into the existing first-party eCommerce shopping experience. When you equip your grocery marketplace with third-party extensions, you offer a value proposition to your already-loyal customers.
Lastly, there are other marketing aspects online grocery businesses can hit on, including understanding what drives their grocery shoppers, adding value through the online shopping experience, and more. Furthermore, you should holistically consider channels, measure and adjust with time, and establish credibility with your customers.
Revenue channels for your online grocery marketplace
Here are the most common revenue channels for your online grocery marketplace:
- Commissions: The owner decides the commission slab. The vendor shall pay the commission for each sale on your online grocery marketplace.
- Delivery: You can charge a commission on each sale made and product delivered.
- Vendor subscription fees: In this revenue model, vendors pay a commission monthly, quarterly, or annually.
- Premium memberships: In this revenue model, you allow your consumers to get a membership program by paying a certain amount. As a result, they can benefit from extra discounts for becoming a premium member of your online grocery marketplace. You can also set a subscription for a certain category of customers who regularly purchase with the online grocery store.
- Promotions: You can charge promotion fees from vendors on your marketplace. It shall allow them to promote their products and gain more traffic and customers.
- Third-party investments: You leave aside a place on your online grocery marketplace website for third-party advertisers to display their ads. It maximizes your return on investments whenever a customer clicks on the ad.
Conclusion: Is online grocery shopping the future?
The definitive answer is yes. The above trends and statistics suggest that grocery shopping will significantly turn from traditional grocery shopping. The pandemic proved there’s nothing you can’t buy online. Grocery shopping is no exception. The faster grocery retailers adapt to changing times and trends, the more scalable their businesses get. It’s safe to say that the pandemic has shown a golden opportunity to grocery retailers who quickly transformed the way they carried out their business.
You can also take advantage of changing consumer behavior and the ongoing pandemic. The online grocery marketplace solution from CedCommerce can empower your local grocery business to flourish and scale-up. We can help your grocery business go online in just a couple of days. You can effectively manage your online grocery marketplace with premium and advanced features.
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