6 tips for getting your products into the online grocery basket

October 2, 2017; 00:01 am by David Bishop

With the advent of online grocery, brands need to adapt to a more visual, dynamic and digital merchandising environment if they want to get into the online grocery basket. Last month Jeremy Neren, Founder & CEO of GrocerKey and I discussed these issues at an event sponsored by the Wisconsin Milk Marketing Board.

GrocerKey has been providing online solutions to retailers for 5 years, and Jeremy’s perspective illustrates where brands can adjust their retail programs and focus on new areas to test and learn how digital can help them sell more. Here is an abridged version of our discussion.

Tip #1: Placement Becomes Dynamic

BISHOP: If you want to get your brands into the online grocery basket, it’s crucial to understand how the digital experience differs from the in-store experience, and to move from thinking about shelf merchandising to focus on visual merchandising.

To start with, the product presentation – what the shopper sees -- is entirely different. In the store, larger brands often negotiate for more facings per SKU on the physical shelf, which creates a billboard effect. The digital screen, however, is more egalitarian; online, each SKU each gets a single facing and can have new neighbors – for example brand A of shredded cheese next to brand B of string cheese next to brand C of American cheese slices. How are grocers determining where products are positioned on the screen? What factors influence this process?

NEREN: A number of factors play into how products are displayed, and retailers are taking different approaches as they are refining the process, often in close collaboration with brands.The shopper can dictate what they see by setting preferences like gluten free, kosher, or vegetarian – which will give priority to products with these attributes. Retailers often prioritize what is displayed based on in-store sales movement, which they do by sharing POS information with their online solution provider. Having a high-quality product image can impact positioning as retailers want to provide a high-quality experience. Also, over time it’s possible to learn what the consumer is buying or searching for online, and that can impact how products are displayed.

BISHOP: So to summarize, two of the key differences between online and in-store merchandising is that product placement becomes dynamic – and extremely visual – which makes visual merchandising extremely important. 

Tip #2: The Image Is the New Package

BISHOP: It sounds like the factor that brands need to own is to ensure that the retailer has a high quality product image, because online the image is the new package. How do brands address the issue of either not having a product image, an outdated version, or a low-quality one?

NEREN: This is really important, because missing information or poor quality images can hurt the visibility of your product in terms of when and where it is displayed in search results. At GrocerKey, we generally rank products with poor image or information issues lower in search results. And, we see an appreciable difference in sales velocity with products that are poorly represented online, which should also be of concern to the brand itself.

Brands can address this issue primarily through third-party providers like Gladson, ItemMaster, and Kwikee. These are the image and information providers that most retailers use. In fact, I’d suggest that brands work with all of them since different retailers rely on different providers – or combination of providers. Brands may need to contact retailers directly to learn which providers they use. 

A few retailers take a proactive approach and contract with a company to capture product images in-house, but that’s a relatively small number. I’d also recommend that brands conduct field audits of their retail customers’ sites to ensure all the information and images are current and correct. 

Tip #3: How shoppers fill their carts

BISHOP: You’ve been working with grocers and their customers to provide online services for around 5 years. What have you learned about how online shoppers choose what to put in their online carts? 

NEREN: Online customers are not typically going to do a lot of browsing on the retailer’s eStore site. The online shopper is very convenience oriented. As a result, search features are very important in helping people find what they want.

Most online shoppers are not only craving convenience, they're also creatures of habit, so their second or third orders are taken mainly from past purchases or shopping lists. Let’s look at returning visitors, we’ve found that around 90% of the items they add to their carts come from past purchase history or prior searches or lists. However, on the first visit customers are relying almost entirely on search unless the retailer integrated its loyalty program. Online grocery carts have 50-60 items so building that first cart is a fairly grueling process.

Because of this behavior, it’s important for brands to get their products in front of the customer during that search. This is why brands need to work on getting items to the top of the page or as close to the front as possible using key search terms.

Tip #4: Hey, buy me!

BISHOP: What options do brands have to influence placement after they’ve made sure they have high-quality product images and information?

NEREN: There are different approaches across retailers today, but I think where the industry is headed in most cases, is that selection will be based on paid placements. This isn’t that different that how brands secure shelf space in the store, except that now we’re in the digital store. This is already happening to a degree, depending on where you look. Amazon, for example, already does this in a fairly major way.

At GrocerKey, we provide a digital end cap for instance that’s essentially a banner ad at the top of the display page. Or it’s possible to use a pop-up display alongside your list with complementary items.

Tip #5: More than Just a Deal

BISHOP: Do digital deals influence placement online?

NEREN: When you think of deals, the digital world makes them much more convenient. Having a deal, regardless of the discount, will help improve search results. For instance, a product may be discounted $0.09, which is not a large amount, but it will rise in the search results if a customer is filtering based on sale items. This action may make the difference between your product being purchased or not.

Tip #6: Just Around the Corner

BISHOP: What’s next for digital impacts on grocery retailing – not only online but also in-store – from your perspective?

NEREN: I think we’ll see real-time digital offers based on past purchase history and proximity to the products while in the store. Mobile checkout is another technology that we’re starting to see retailers evaluate. Meal planning [i.e., recipes] is being integrated into shopping with the introduction of click-to-list capabilities.

Connecting to and integrating with in-home assistants like Google Home and Amazon’s Alexa are also underway. And eventually, the connected kitchen based on internet of things concept will allow appliances like the refrigerator to assist with grocery shopping.

Putting Online Grocery into Context

BISHOP: It’s clear that digital is transforming how, when and here consumers buy groceries and that online grocery options have added yet another “lane” to the grocery shopping highway and that it is here to stay.

What’s not so clear given the proliferation of options is who’s winning and why. Brands need to know/understand how the experience – merchandising and promotion – is different, and adjust their retail programs to make sure they get into the online basket, support their traditional retail partners, and test and learn where digital can sell more.