In no area of marketing does innovation have greater potential to positively and significantly impact the daily lives of more people than in the weekly task of GROCERY SHOPPING. And yet for all the money, technology, data and brainpower invested, we have very little to show for it as an industry (no offense to those who have been trying, I’ve been right there with you for more than a decade).
- The best opt-in rates for digital consumer engagements in grocery are less than 10% (lower than that on average). Maintaining that engagement is a whole other challenge.
- Most grocery consumer engagement is funded through and by digital couponing, a tactic that appeals to less than 15% of U.S. Households on an ongoing basis and is currently “out of vogue” with brands desperate for new ways to build brand value (and profit margin).
- Less than 1% of Grocery sales occur online (although this is changing, more on that in another post later).
As a result, there are literally billions of brand and retail marketing dollars stuck in increasingly inefficient marketing channels – not because they don’t want to go online (many famous pronouncements have been made to move budget dollars online over the last 15 years) – but no existing solution has the scale to spend that kind of money (not even the biggest dogs in the digital CPG fight). Never, never, never has there been a spending population more patient and willing to test nearly anything and everything – and the fact that there has been no true game changer – well, I’ve literally seen it break hearts. The heart breakers – “great ideas” that turned out to be not-so-great; super cool companies with value propositions that left consumers cold; hot and hungry teams that turned out not so “hot” at follow-through; “game changers” and “killer apps” with funky or ambitious names that … in the end …have struggled to deliver the only things that really matter:
- meaningful, scalable, repeatable impact on volume of units moved
- “brand value” creation
- store preference and retailer share of their customer’s spending.
Many of the pioneers, thinkers, doers, and innovators that I’ve run across along my journey have given up – clients and colleagues – they call it “coupon fatigue” (because a lot of these efforts centered around varying consumer currencies like coupons). They jump out and start businesses in other industries, where the ground is more fertile for innovation…and the consumer value proposition is, quite frankly, easier to deliver. But it’s not the time to give up! It’s time to admit that (I hate to say it), is going to take a village. We need to pool together the collective insight from our successes and failures and FIGURE. IT. OUT. And if that doesn’t excite you – how about this? For all the activity and noise, it’s STILL A GREEN FIELD people! So come on marketing industry, what have you learned that might help us collectively solve this puzzle? What do you find to be interesting, inspiring or hopeless in the realm of digital grocery/consumer engagement? Vent! Let it all out! Now! The industry is ready to listen, or if not – I am! I am listening with both ears and all of my brain – not to judge, blame, criticize – but to LEARN. At the very least, consider it therapeutic. After your rant (or rave), you can go back to your regularly scheduled existence. (I feel like Will Smith talking Tommy Lee Jones in MIB II into coming back into the alien security business… yes there are a lot of weird, frustrating characters…but you know you love it…just for now, tell us what you think…and yes, I am begging. Probably time to end this blog.)
Susan O’Neal Gear has over 20 years of experience at the intersection of consumers, marketing and technology. Passionate about all aspects of a consumer’s relationship with brands and retailers, we’re spending the next year looking for new, groundbreaking thought leadership – if not disruptive solutions – with the potential to redefine the parameters of consumer loyalty. If you also want to see some game changing happen -then follow Upstream Insight, contribute your voice, share this post…do something!