What We Can Learn From Online Grocers

Online retail shopping has been growing at a rapid rate over the last several years, but it seems we’re hearing more and more about how online shopping is permeating the grocery industry. While the logistics of home delivery of fresh salad greens is a bit more complicated than that of, say, a pair of shoes, online grocery shopping looks like it’s gaining real ground in the competitive landscape.

A few statistics to consider (from IBISWorld):
• 6 billion dollars in current online grocery sales in the U.S.
• 9.4 billion dollars in projected sales for 2017
• 9.5 percent projected annual growth rate from 2012 to 2017

This past spring, Direct Marketing News published a case study on one online grocer’s success in expanding its market share. For a decade, FreshDirect marketed exclusively to the New York City area, but an opportunity to move their headquarters from Queens to the South Bronx meant that FreshDirect could double capacity and, therefore, seek out new markets. Following are some of the highlights of that case study.

The first step was to examine consumer buying habits in major northeastern cities in order to find potential customers who resemble current NYC customers. After breaking down their current customer list in terms of demographical, attitudinal, and behavioral attributes, FreshDirect acquired third-party data on potential markets and began the process aligning the two. They discovered that the Philadelphia market was a perfect fit.

The next step was to run a radio campaign consisting of 30- and 60-second spots directly addressing the pain point of online grocery shoppers: “how do I know that the food I order online will meet my expectations?” There, FreshDirect promised a money-back guarantee and promoted local sourcing. They also conducted a direct mail campaign offering money-saving trial coupons.

The final piece of the puzzle: their content-driven web site. Convenience of to-your-door-delivery aside, most people still want to inspect the produce and talk to the butcher. FreshDirect makes up for that with detailed content — from product information to seasonal or personalized deals — on almost every one of the thousands of products they carry.

You can read the full article here, but what’s the big takeaway we can all learn from? Target the right audience. Address their pain points.  And give your customers much-sought-after, value-added information.