In Online Grocery Shopping, Amazon’s Actually Got Some Competition

Amazon.com's dominance in the evolving e-commerce landscape continues as it pushes further into the grocery category with its acquisition of Whole Foods and the launch of Amazon Pantry. These moves have created numerous opportunities for consumer brands to get their products front and center with targeted audiences and leverage the incredible amount of shopper data now available to aid in media investment decisions.

The timing couldn’t have been planned better, even if it inadvertent. With the advent of the COVID-19 pandemic, individuals around the world and here in the U.S. are adapting many of their previously built-in patterns and routines. The ongoing shift to online shopping has intensified at a blistering pace — and the grocery store has emerged as the next retail segment for disruption.

Some are surprised to see, however, that Amazon isn’t necessarily the dominant player in the grocery category, nor the first platform consumers think about for their weekly online grocery run. And it’s not just trendsetters and early adopters buying their groceries online. According to Brick Meets Click, 40 million U.S. households stocked their pantries and refrigerators via e-commerce purchases last month — a number that will probably grow if current social distancing restrictions remain in place.

Given these trends, consumer brands will need to understand how traditional shopper marketing partners like Target, Walmart, Albertsons, and Kroger are all now rapidly evolving into digital grocers.

Within each of these shopper marketing partners, media investment opportunities abound, with programmatic display, search ads and video ads all available for broadly targeted audiences or specific hand raisers filling their digital grocery carts. One CPG marketer recently saw attributed revenue jump 51 percent in Q1 of 2020 using targeted search ads on Walmart.com, with a total return on ad spend of 373 percent on the client’s top-selling SKU. The results clearly show that even best-sellers can still benefit from highly targeted and relevant media exposure on these emerging platforms.

Walmart Media Group offers up many of the same advertising opportunities you might expect to find from a partner like Amazon. Walmart’s significant advantage derives from the nationwide scale of more than 2,500 grocery pickup locations across the country at well-known physical retail outlets. As the largest grocery retailer in the U.S., this network of physical locations should be of utmost interest to many CPG brands.

Not to be outdone despite a size disadvantage in its retail footprint, Target Media Network — now known as Roundel — offers a full suite of on- and off-site advertising opportunities for CPG brands, including programmatic display ads, biddable search ads on Target.com, and online couponing opportunities and in-app promotions. CPG brands may want to consider investments across both Walmart and Target, as real-world shopper loyalties tend to translate into online shopping behavior.

Other national and regional grocery chains also have joined the battle for this expanding customer base. Albertsons and Kroger, for instance, are quickly building digital infrastructures, while also developing innovative performance marketing opportunities for CPG brands in an effort to leverage proprietary customer data as shopper marketing evolves.

As this expanding group of online platforms rolls out their wares, the top CPG brands need to think about aligning their online and offline shopper marketing efforts. While Amazon remains top of mind for many marketers when it comes to e-commerce, the opportunity to leverage legacy retailers’ in-store grocery pickup and customer data sets shouldn't be ignored.

The online and offline worlds are quickly merging, and, amidst the COVID-19 pandemic, this trend will only intensify. Once stay-at-home orders get lifted, consumer brands need to consider that these new digital shopping habits, and the way you create a meaningful media experience, may be here to stay.

Brad Beiter is managing director of U.S. performance marketing at Havas Media, a global media agency and part of Havas Group.