How Brands Attract Grocery Buyers Online

Cure Hydration’s stroke of luck came at a strange time.

Walmart, CVS and Amazon-owned Whole Foods began marketing the start-up’s fruity hydration powder during the pandemic. However, boxes and packets of the electrolyte drink often remained in the back of stores as busy employees tried to restock shelves with high-demand items like hand sanitizer and paper towels. Its main sales driver, offering free samples at sporting events like triathlons or after class at fitness studios, stood still. Customers weren’t discovering the brand while shopping online or didn’t see it when they zipped through the aisles on their trips to the store.

So instead, Cure Hydration founder and CEO Lauren Picasso decided to try another strategy for getting her products into shoppers’ baskets: free samples on Walmart orders for curbside pickup.

“As an emerging brand, we wanted to find a way to reach customers knowing that they are not browsing stores as much as they used to,” he said.

He said the samples boosted sales, while costing less and scaling more easily in about 1,000 stores.

Add sampling to the list of pandemic-related changes that can be sustained. As more grocery shoppers use curbside pickup and delivery, consumer packaged goods companies have had to experiment with new ways of getting their products in front of people. Major retailers are trying to capitalize on increased demand by charging brands for access to their shoppers and the data they have collected about their preferences, while also delighting customers with free gifts.

For years, consumer packaged goods companies have paid retailers for premium real estate in stores that helps them grab shoppers’ attention, like end caps, a product display at the end of an aisle. That equation has changed as more shoppers retrieve their bagged purchases in store parking lots after ordering online.

Online grocery sales in the US grew 54% in 2020 and are expected to exceed $ 100 billion for the first time this year, according to eMarketer. The market research firm said those habits will last longer than the pandemic because buyers see it as a more convenient way to shop even after getting vaccinated. By next year, eMarketer expects more than half of the US population to be online grocery shoppers. By 2023, he estimated that online grocery sales will account for 11.2% of total grocery sales in the US.

Walmart’s e-commerce sales in the US were up 79% last fiscal year compared to the previous, driven by grocery orders, but have yet to turn a profit.

Sampling is a money-making opportunity for Walmart. The retailer began a sample pickup and delivery program in 2014, but is receiving more attention as more customer traffic shifts to the parking lot. The retailer charges companies when their product is added to a delivery order or curbside.

Walmart is looking for new revenue streams while juggling the added costs that come with online ordering, like picking up grocery orders from shelves and shipping purchases to customers. At a recent investor meeting, Walmart CEO Doug McMillon said he wants to use his reach as the world’s largest retailer to grow other businesses, including advertising. He said he wants to monetize the data he collects on shoppers.

Even the big brands are taking notice. General Mills has accelerated the number of samples it has paid to place in curbside pickup orders at retailers including Walmart, Kroger and Target.

Jay Picconatto, General Mills director of commercial marketing brand experience, said grocery pickup sampling “is something we wouldn’t even have touched two years ago or 18 months ago.” However, as store traffic plummeted last spring and retailers limited in-store demonstrations, he said the company leaned aggressively.

For example, some Walmart shoppers may have received an Old El Paso taco seasoning sample with recipe cards around Cinco de Mayo. Walmart delivered its Annie’s Fruit Snacks and Bunny Grahams at a Walmart drive-in event.

“So we find out, well, it works and we really like what’s going on,” he said. With more shoppers picking up groceries on the sidewalk, he said, “It’s a place we want to keep playing.”

Alvis Washington, vice president of marketing, store design, innovation and experience at Walmart, said its sampling program can help brands connect with the right customers. Customizing the samples a customer receives is a key goal.

It can also be used to deepen customer loyalty with Walmart, Washington said. It turned some of its store parking lots into drive-ins and trick-or-treating sites. At a store near her Arkansas headquarters, she had a special Mother’s Day event. It lit up the sky over several tents for a Christmas drone show.

At each event, attendees were surprised with a bag of samples. Washington said the company wants to scale that at more of its Walmart and Sam’s Club stores. He described it as a “triple win”: making Walmart a more attractive shopping destination, offering a fun activity for customers, and creating an opportunity for suppliers to “put their new and innovative products in front of customers.”

He said Walmart may start charging an insertion fee for loot bags, as it does with its business model for curbside collection samples, in addition to having companies cover the cost of the products.

Walmart has also tested a welcome box for customers joining Walmart +, its subscription service that it launched in the fall. Each includes a Walmart + branded tote bag and product samples. He said the retailer is expanding the program and plans to tailor the box further to customer preferences in the future.

Picasso said that new approaches to driving product discovery are easier and more profitable. On a good day, he said an in-store demo delivered about 300 samples, which cost about 50 cents per sample, including the fee to reserve space in a store and staff it. He said the cost of including a sample in a curbside pickup order or loot bag varies by retailer, but typically ranges from 10 cents to 30 cents each.

“It ends up being much cheaper to get into people’s hands in other ways,” he said.

Picasso said the company is testing demo stations again at some Whole Foods stores, with a pandemic twist. Each powder packet is individually packaged and people can grab a branded energy bar and bottle of water, so they can safely test the product at home.

However, for other foods and beverages, he said the “ick” factor may outlast the pandemic, as shoppers remain germ conscious and don’t want to eat a chopped granola bar.

Also, he said, retailers are getting more sophisticated and allowing companies to add samples to some curbside pickup orders and not others based on customers’ purchasing history – a more specific approach than relying on the right strangers. for them to come by and collect a sample. .

General Mills will continue to pay for store displays, Picconatto said. But he said the pandemic has changed “the way we think about balancing in-store levers and online levers,” particularly as e-commerce generates a higher percentage of its total sales.

“What ultimately really matters to us is being on that shopping list,” he said.