Blog Behind the rise of grocery delivery apps

Behind the rise of grocery delivery apps

Necessity is the mother of invention, right? Well, the COVID-19 pandemic didn’t exactly give birth to grocery shopping apps, but it sure did spur a dramatic rise in their popularity. According to 2018 research, 6% of all consumers placed online grocery orders more than once a month. In 2020, 74% of people said they would shop for groceries online — spending an estimated $89.2 billion — and now, it’s estimated that 70% of consumers will be buying groceries online in 2022. There is no denying it; supermarket apps are hot and if you want to compete, not only do you need an app, but you also need a marketing strategy for your online grocery store.

Many brick and mortar grocery stores were ahead of the curve, and well-equipped to deal with the demand for online shopping as well as grocery delivery and/or pick-up, but others were caught off guard. Meanwhile, there were plenty of disruptive online grocery store models, including ‘10 minute’ delivery services like Getir, Gorillas and DoorDash, ready to step in and fill the gap. Staying competitive in this growing market means keeping up with grocery delivery app development and effectively marketing your app.

What is a grocery delivery app?

One of the factors that makes competing in the online grocery store space so challenging is that you aren’t just up against other stores. Not only do individual stores have their own apps — such as Walmart — you also have to compete with on-demand grocery delivery startups, which are becoming ubiquitous in major cities across the globe.

A look at the top grocery e-commerce platforms in the U.S. shows the variety of options available. Instacart tops the list followed by giants like Amazon Fresh and Walmart, with a mix of regional chains and online-only challengers like Shipt and Fresh Direct rounding out the list.

Digital-native grocery stores have found important niches to fill. For instance, Misfits Market has had success by delivering produce that doesn’t quite make the grocery store cut due to cosmetic imperfections to customers looking for a discount on organic and non-GMO fruits and vegetables. The company was valued at about $1 billion in 2021, just three years after launching in 2018.

Meal delivery kits have also become popular in recent years, where companies like HelloFresh and GreenChef deliver the exact ingredients needed for specific meals — along with cooking instructions — directly to consumers. While these apps don’t typically completely replace the need for grocery shopping, they can significantly change shoppers’ habits. The meal kit delivery market was estimated at $10.26 billion in 2020 and expected to reach $12.73 billion in 2021.

While the pandemic may have spurred growth in the grocery delivery app space, it’s clear that the convenience has hooked users long-term. Traditional brick and mortar stores have taken note. According to Business of Apps, “Kroger launched a new app version that saw a 92% increase in digital sales, and Walmart combined its main app with its Walmart Grocery app for users to shop across departments.” Meanwhile, other players have joined forces with food delivery apps: “For example, Walgreens has partnered with DoorDash, and Target is working together with Shipt, it’s mobile-first delivery service.” Competition follows customers, and that means it is critical to have a great marketing plan in place to make sure drive downloads and high LTV customers to your app.

Online grocery marketing strategies that work

Competition is fierce in the grocery delivery app market. Your existing and potential customers have plenty of choice, and increasingly use more than one app. So let’s talk about how to put together a marketing strategy for an online grocery store.

In November of 2021, Instacart kicked off a fully integrated branding campaign, showing just what’s possible in the grocery delivery marketing space. Supermarket News reports, “Titled ‘How Homemade Is Made,’ the multimedia campaign will run through the holiday season and includes TV commercials, online video (YouTube), paid social media, influencer marketing (#HowHomemadeIsMade), programmatic advertising, and digital out-of-home (OOH) activations, which will run through the holiday season, Instacart said Monday. Sixty- and 30-second TV spots are scheduled to air Nov. 14 to Jan. 2 on ABC, CBS and NBC networks.”

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Instacart, like many advertisers of the 2021 holiday season, is opting to tug on the heartstrings of users, emphasizing the importance of family. It’s a wise strategy two years into a pandemic that has kept many people apart from their family, but it’s just one option to promote your supermarket app. There’s a lot to take into account when planning your strategy.

Get to know your customers

According to eMarketer, 43% of millennials shop for most of their groceries online. But they aren’t the only game in town. One-third of Gen Z respondents said the same, followed by Gen X at 24%, and Baby Boomers at 18%. Age isn’t the only factor in a person’s likelihood to grocery shop online. Urban dwellers (36%) are more likely to shop for groceries online — with suburban and rural dwellers coming in at 25% and 22% respectively.

While young urban dwellers may be your most likely customer, they may also be the hardest to reach due to competition in those markets. Rural markets are often neglected by delivery services, especially apps like Instacart or DoorDash where a density of customers, participating retailers, and drivers is required to make the business model work. However, targeting this untapped market could work for stores based in those communities — either with delivery or curbside pick-up.

Whichever market you’re targeting it’s important to know where to find them and what messaging they respond to (more on that later). Using social media, programmatic ads, in-app video, or whatever mix of ads that works for your customers, it’s essential to target your users with messaging that will make you stand out from competitors and/or address the reservations of people who have yet to fully embrace grocery delivery services.

Perfect your messaging for online grocery marketing

Online grocery retailers have many of the same challenges as brick-and-mortar retailers. Customers are often driven by price, sales, and product availability. But this means you have an incredible opportunity to target users with digital ads that speak specifically to their preferences.

Many of the tried and true methods of advertising supermarkets can be easily translated to the digital realm. Coupons for favorite products or discounts for first-time buyers can help compel first-time users to try a new service — or win over frequent online shoppers who are price conscious. Stressing convenience can also be a good way to sway potential customers who haven’t taken the dive into grocery delivery yet.

Influencer marketing for grocery delivery apps

When it comes to grocery delivery apps, influencer marketing is a perfect fit. Food blogging is a well-established niche and connecting with popular accounts to develop content around products they are able to buy through your services is a great way to reach untapped sources of new users.

You can also look beyond food bloggers to do everything from grocery haul videos to brand ambassadors to create great content and reach new audiences.

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Focus on retention

In a competitive market, it’s especially important to stay focused on retaining your users and creating a sticky app that keeps them coming back to shop. App users will generate lots of data to tell you what’s important to them. Some shoppers may be price sensitive while others may be more concerned with getting the exact products they want. Using tried and true retention techniques — like push notifications with special offers and easy onboarding that promotes a better user experience — can help ensure you don’t lose your hard won customers.

Fuel your marketing with the right data

Whether you’re pursuing user acquisition or improving retention rates, you need the right data to plan and execute your strategies. In the world of apps that means you need a reliable mobile measurement partner (MMP) to help you track the metrics that matter.

A good MMP can help you understand which marketing channels are bringing you the most — and highest value — users. They will also be able to tell you if and when your users are struggling on their journey, why they may be churning, and help you target your messaging to bring those users back into the app.

With the right MMP partner at your side, you can perfect your messaging and channel selection to win the race for online grocery shoppers.

Want to learn more about MMPs, what they do, and how they can help you achieve your growth goals? Check out this article on what makes a good MMP in the privacy era or request a demo.

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