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How mobile is transforming the grocery/CPG business

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April 23, 2015

Adam Meshekow is executive vice president for product strategy and national sales at SITO Mobile

Adam Meshekow is executive vice president for product strategy and national sales at SITO Mobile

By Adam Meshekow

A 2014 study reported that 90 percent of U.S. adults now have a mobile phone, with 58 percent of those devices being smartphones. Even more, 67 percent of mobile phone owners admit to checking their phone for messages and alerts even without it having rung or vibrated and 29 percent described their phones as something they could not live without.

The point? Mobile devices have become an extension of our every day lives – we listen to music, socialize with friends, make travel plans, date and shop – making mobile the idea avenue for businesses to target and reach consumers. So why are marketers not making more of an effort to do so?

Mobile and Internet make up roughly 45 percent of an average person’s media consumption, yet advertisers are only spending about 26 percent of their budget on those two mediums, including a mere 4 percent on mobile. This represents a $30 billion opportunity yet to be capitalized on, including within one of the biggest retail sectors ripe for mobile innovation: the grocery and consumer packaged goods (CPG) business.

Traditional grocery habits versus the new mobile grocery shopper
Let us think about how these retailers used to reach consumers: radio and television ads, coupons, freestanding inserts (FSIs) and weekly circulars.

Ten years ago, these methods were effective, but the way we are consuming content has changed.

Grocers can no longer afford to spend 75 percent of their ad budget on print, radio and TV when those three mediums barely make up half of a consumer’s media consumption.

Along with consuming more on mobile, we are shopping at more grocery stores than before.

The days of family loyalty to a store are a thing of the past: 45 percent of grocery shoppers go to two or more stores to check off their lists, while 30 percent shop at four or more stores.

This leaves the grocery/CPG vertical as a competitive market to attract consumer attention. But the solution, quite literally, could lie in the palm of their hands.

Omnichannel mobile experience
An omnichannel mobile approach gives the consumer the complete shopping experience – product browsing, checkout, deals and specials, and delivery – from the palm of her hand.

Whether she is in-store or near a location, there are several mobile tactics that allow grocery/CPG businesses to target consumers like never before.

Anywhere, anytime shopping. This is an obvious one, but having a mobile site, application and delivery service will make your store more attractive to consumers.

We already have store-to-door options such as FreshDirect and Amazon Fresh. But grocery chains such as ShopRite and Whole Foods Market have entered the fray with mobile shopping and home delivery options.

Geo-fencing. In-store, geo-fencing can use location data to target shoppers at and around a store location to promote its products. This allows retailers to communicate messages to exact audiences across all mobile devices in key locations, an important tool considering 60 percent of consumers use mobile devices to find information on local products and services and 40 percent of those are on the go when searching.

Mobile CRM. Customer mobile data is the future of retail. Grocery/CPG businesses using a mobile CRM program will see higher redemption rates, particularly when leaning on FSIs.

A mobile FSI is cheaper than direct mail, since it delivers weekly deals to consumer mobile phones via SMS text. In exchange for the deals, you are receiving valuable customer data to use within other campaigns.

Rich media. Rich media is an engaging way to capture your audience’s attention with an interactive ad experience.

Take the Super Bowl, for example. You can deliver recipes to relevant consumers within your geo-fenced radius of the store that promote certain products that you want to push.

The functionality of the rich media enables consumers to get directions to the nearest store directly through the ad unit, boosting your store visits and verified walk-in stats.

Verified walk-in. Bricks-and-mortar retailers receive a confirmation when a consumer is served their ad and then enters the store. This type of verifiable customer data allows retailers to measure their in-store sales lifts.

USING MOBILE marketing for both CPGs and grocers is no longer about just checking the box.

It is imperative to have a mobile strategy in place to continue to reach your consumer and stay competitive.

Adam Meshekow is executive vice president for product strategy and national sales at SITO Mobile, Jersey City, NJ. Reach him at adam.meshekow@sitomobile.com.

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