Now Available: Cardlytics Grocery State of the Industry Report
The phrase “picking up a few things for dinner” used to mean the same thing to nearly everyone: a quick run to the local grocery store. However, now that delivery, discount, and meal kit brands are disrupting the traditional grocery industry, there are many ways shoppers can put food on the table.
The consumer is in control. And, they are leveraging a variety of channels to put food on the table. Looking at +$1.3 trillion in actual spend across credit, debit, ACH, and bill pay, Cardlytics published a grocery state of the industry. The report, titled How is Grocery Spend Changing Across Meal Kits, Specialty, Delivery, Traditional, & Discount?, highlights how the changes in grocery are shifting food dollars and evolving the marketplace.
A few key findings:
- Convenience continues to be important
- In 2017, we saw 4.6% of customers using convenience channels like meal kits or delivery. And, online grocery spend in 2017 grew nearly 100%.
- Discount grocery means savvy shopping vs. limited resources
- Discount grocery experienced a consistent 8-10% annual growth in 2017, demonstrating that consumers want both convenience and affordability.
- Surprising acquisition periods
- While shopping trials spike during Thanksgiving and Christmas, most customers don’t return the following year. An interesting finding, given that most grocers consider this a key time to acquire new customers.
- Traditional grocery customers acquired during the week of July 4th are more likely to be retained. This means grocers are not relegated to the winter holidays to attract new shoppers. They should keep a steady drumbeat of marketing to attract new customers year-round.
So, how do brands survive in this changing era? Purchase-based targeting and sales-driven measurement. That means targeting based on actual purchase behavior, instead of demographics, and evaluating success based on actual sales, instead of clicks and attributed sales.
While grocers can track what their customers do when they’re in the store; they’re left with a blind spot once the customer leaves. This often leads to misinformed marketing. For example, while a customer may seem brand loyal, they may actually be heavy category shoppers. It’s important to have a “full-wallet” view of how customers are shopping with you and your competitors. Additionally, it’s critical to evaluate success based on metrics beyond clicks and brand awareness. Grocers need to understand how their campaigns drove actual in-store sales.
As grocers face increasing competition, Cardlytics has helped them bring shoppers back in a 16-35% lift in transactions and a $6.51 – $9.23 increase in incremental revenue for every $1 invested.