How brands attract online grocery buyers

Cure Hydration’s lucky break came at a strange time.

Walmart, CVS and Amazon-owned Whole Foods began transporting the fruit-flavored hydration powder from the start-up during the pandemic. However, electrolytic drink boxes and packages often lingered in the back of stores while busy employees tried to replenish shelves with high-demand items such as hand sanitizers and paper towels. Its main sales driver, which offered free samples at sporting events such as triathlons or after class in gyms, stopped. Customers didn’t discover the brand while shopping online or didn’t see it when they walked down the aisles during trips to the store.

Instead, Cure Hydration founder and CEO Lauren Picasso decided to try another strategy to incorporate her products into shoppers ’baskets: free samples included in collection orders on Walmart’s sidewalk.

“As an emerging brand, we wanted to find a way to deal with customers knowing they don’t browse stores as much as before,” he said.

He said samples increased sales, costing less and climbing more easily in about 1,000 stores.

Add a sample to the list of pandemic-related changes that may remain. As more grocery shoppers use collection and delivery to the sidewalk, consumer-packaged product companies have had to experiment with new ways to get their products in front of people. Leading retailers are trying to capitalize on increased demand by charging brands for access to their buyers and the data they have collected about their preferences, while delighting customers with gifts.

For years, consumer package product companies have paid retailers for premium real estate that helps them capture buyers ’attention, such as end caps, a sample of products at the end of a aisle. This equation has changed as more shoppers pick up their purchases in the parking lot of stores after ordering them online.

Online grocery sales in the United States grew 54 percent in 2020 and are expected to exceed $ 100 billion for the first time this year, according to eMarketer. The market research firm said these habits will perpetuate the pandemic because buyers see it as a more comfortable way to buy even after the vaccine. Next year, eMarketer expects more than half of the U.S. population to shop for groceries online. In 2023, online grocery sales are estimated to account for 11.2% of total grocery sales in the United States.

Walmart’s e-commerce sales in the U.S. grew 79 percent in the previous fiscal year compared to the previous one, driven by grocery orders, but have yet to make a profit.

Sampling is an opportunity to make money for Walmart. The retailer started a collection and delivery sampling program in 2014, but is getting more and more attention as more customer traffic moves to the parking lot. The retailer charges companies when their product is added to a transit or delivery order.

Walmart is looking for new revenue streams as it juggles the additional costs of ordering online, such as picking up grocery orders from the shelves and sending purchases to customers. At a recent meeting with investors, 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 about buyers.

Even the big brands take note. General Mills has increased the number of samples it has paid to place beach pickup orders at retailers, including Walmart, Kroger and Target.

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

For example, some Walmart shoppers may have received a sample of Old El Paso taco seasoning with recipe cards around the Cinco de Mayo. Walmart delivered its Annie and Bunny Grahams Fruit Snacks at a Wal-Drive movie event.

“So, we’ve found, hey, 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 where we want to keep playing.”

Alvis Washington, vice president of marketing, store design, innovation and Walmart experience, said his 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. He turned some of the parking lots of his shops into movie theaters and attractions. At a store near Arkansas headquarters, she had a special Mother’s Day event. It lit up the sky over several tents for a holiday drone show.

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

He said Walmart could start charging an insertion fee for swag bags, as is the case with its business model for sidewalk collection samples, along with companies covering the cost of the products.

Walmart has also tested a welcome box for customers who join Walmart +, the subscription service it launched in the fall. Each includes a Walmart + handbag and product samples. He said the retailer is expanding the program and plans to tailor the box to customer preferences in the future.

Picasso said new approaches to discovering products are easier and more cost-effective. On a good day, he said a demonstration in the store handed out about 300 samples, which cost about 50 cents per sample, including the fee to reserve space in a store and staff it. She said the cost of including a sample in a pick-up order on the sidewalk or in a shopping bag varies by retailer, but typically ranges from 10 cents to 30 cents each.

“It ends up being a lot cheaper to put yourself in the hands of other people,” he said.

Picasso said the company is re-testing demonstration stations at some Whole Foods stores, with a pandemic touch. Each packet of powder is individually packaged and people can grab some branded energy and bottled water, so they can test the product safely at home.

For other food and beverage products, however, he said the “ick” factor could last the pandemic, as shoppers remain aware of the germ and don’t want to eat a bar of chopped granola.

In addition, he said, retailers are becoming more sophisticated and allow companies to add samples to some pick-up orders on the edge and not to others based on customers ’purchase history, a more specific approach than relying on the right strangers. to go through it and pick one up. .

General Mills will continue to pay for store displays, Picconatto said. But, he said the pandemic has changed “how we think about the balance of in-store levers and online levers,” mostly because e-commerce generates a higher percentage of its global sales.

“What we really care about is getting on that shopping list,” he said.