Online grocery shopping and other fairy tales

Posted by Graham Halling

Jan 30, 2021 11:13:00 AM

The marketing community has been re-inventing and re-packaging the tired display advertising proposition for 20 years, through digital’s continual evolutions. Can mobile as a medium resist the latest incarnations and concentrate instead on its unique ability to bridge the digital and physical Worlds?

One of the things that most attracted me (and many others) to 'new media' so many years ago, was the incredible speed at which new technologies, consumer adoption and bright young companies could come-together to drive new service and business models. I'm pleased to say that nearly 20 years later, those same elements still enthuse and drive me.

What sadly hasn't changed in those 18 years however, is the digital industry's capacity to allow traditional models of advertising and the beneficiaries of those models, to set the agenda on how new media channels are utilised for marketing and advertising. From display-based website advertising to expensive vanity mobile apps right-through to today's unnecessarily complicated RTB platforms, established service provider-led models have been hastily re-imagined and migrated to the latest platform or channel accompanied by wildly optimistic ad revenue forecasts, weighty and academic-looking reports and papers and a new bunch of fees for advertising brands to evaluate and try to plot a route to ROI from.

Ecommerce isn’t Everything Commerce

ECommerce has been no different in this regard.Make no mistake, the internet as a sales channel has pretty much done for book and music sales in the physical World, is rapidly doing the same for financial services and consumer electronics and has revolutionised the travel industry. Unless you are a bookshop or high street travel agency (or rock band!) these developments have largely been positive in terms of choice, price and convenience.

It’s a compelling story of evolving consumer behaviour but…… I now spend every day talking to brands and agencies whose principal concern (one would hope) is to sell more FMCG products to shoppers every day. Bread, biscuits, frozen pizzas, washing powder and so on. Inevitably, within 10 minutes of exploring how they are or intend to be using digital or mobile as a channel to engage with and influence shoppers, the conversation has traversed .com supermarkets, price comparison engines, SEO, microsites and social networks amongst other things. It's at this stage that I usually return to my initial question, "how important is driving sales and understanding how to do that most effectively?"

Because groceries are simply not sold online. After years of evolution and technology development, just 5% of grocery shopping is done online in the UK. Look a little deeper and it's even more startling; for baskets under £60, which is most grocery shopping, online accounts for just 1% of the market and yet FMCG last year overtook Finance as the largest spender of online display £s. Why?

Online display - huge store, lots of tiny windows, one door and no tills

Because somewhere along the line, the service providers managed to convince brands that everyone was shopping online and that it was audience or ‘opportunities to see’ that was key - "1 million people will see your new biscuit ad and we'll get more than 100k Likes on Facebook!" The brands themselves though and the individuals tasked with guiding them into and through the new digital routes-to-market can’t however abdicate responsibility entirely. Sure they’ve been sold some snake-oil here but ‘looking before you leap’ is pretty easy in such a data-rich environment:

  • Typical click-through rates from a range of online display advertising range from 0.3 - 1.5% (the average overall for banners alone remains 0.1%!)
  • Only 8% of internet users account for 85% of clicks on display ads (and many of these aren’t ‘human’)

My favourite display ad stat is that you are statistically more likely to successfully climb Mount Everest than to click on a banner ad. But let’s play this hand out. Your advertising agency and their space-age RTB platform do a ‘great’ job and gain a whopping 7.5m impressions for your advertisement or new product promotion. Presuming that you’re pushing those potential buyers to a commerce-enabled destination such as a .com supermarket, that will equate to typically around 30k visitors (0.4% CTR) which seems just about acceptable but here’s where it starts to unravel. Of those 30k (many of whom won’t be humans remember), just 9.5% will spend more than 10 seconds on the destination page. Of these, a miniscule 62 shoppers will typically add your product to their basket.

7.5m impressions = 62 purchases

Mobile shopper marketing isn’t mobile eCommerce

“Ah yes, that wasn’t working on desktops but mobile is changing everything” you’ll be told. “Mobile/Smartphone Shoppers” is the buzz and mobile SEO, geo-location and targeting on-the-go is where this rather ineffective spend is now being migrated. But again, what is the truth here?

  • Over two-thirds (68%) of mobile usage is in-the-home
  • About 50% of clicks on mobile ads are accidental.
  • 74% of consumers will wait 5 seconds for a web page to load on their device before abandoning the site.
  • A recent AOL/BBDO analysis identified seven distinct “mobile motivations”: "Me Time" (which claims 45% of total phone time); “Socialize” (19% of phone time); “Shop” (12%); “Accomplish” (11%); “Prepare” (7%); “Discover” (4%); and “Express Myself” (2%).

“Me Time”, often at home, is clearly not an optimum time for invasive or mobile display advertising to be delivered , let-alone geo-locational motivations to do something “NOW”! Ally this actual mobile usage behaviour to what we’ve already established about digital display advertising and it’s clear that mobile isn’t going to re-write the rather sad story told above.

Mobile marketing activity should still largely obey a version of the trinity “Timely, Convenient and Relevant”. Behind each of these lies the requirement to plan and execute and beyond that, to properly and sympathetically understand consumers and their behaviour both in mobile terms and in their lives generally.

Mobile marketing solutions and platforms that concentrate on delivering this level of planning and understanding and which are entirely results-focused (including a commitment to ROI) will I hope beat-back the traditional volume-based advertising models. Shopitize and others like us are already demonstrating the true power of mobile to activate shoppers in the Real World and to harness data and insights that can genuinely make a difference to brands where it counts; at the till. I’m certainly much happier delivering add-to-basket rates of 10-50% in the Real World than I would be in trying to justify rates that begin with 0.000……..

By Graham Halling

Commercial Director, Shopitize

Topics: graham halling, fmcg, eCommerce, Mobile Shopping, Mobile marketing, media, Path to Purchase, advertising media, Fast-moving consumer goods, shopitize, shopper marketing, Retail