The Grocery Evolution and Direct Mail

Long ago, people set aside a time out of their day to carefully list every provision they needed to buy for the week. They would drive to a supermarket, pick up the items, come home and unload them, and do the same thing the following week. If they were thrifty, they would clip coupons to save extra money.

Ok…so maybe all of this isn’t exactly “long ago” but something has certainly shifted. Boxes filled with organic ingredients packed in ice are showing up on doorsteps more often. Personal shoppers in bright-colored t-shirts are wandering grocery stores, personally shopping for some customers while other customers are picking up online orders. What’s happening here?  Has the ritual of grocery shopping fundamentally changed?

Let’s explore some of these eye-catching stats about grocery stores and consumers:

  • 72% of rural consumers say they do not purchase their groceries online
  • The top 3 reasons a rural consumer shops at a grocery store: price, location & selection
  • 71% of frequent grocery shoppers saw an ad or coupon in their mailbox that led them to some action in the last 12 months
  • 64.1% of e-commerce shoppers said that ads/coupons in their mailbox led them to take an action in the last 12 months

New Grocery Shopping Options for City Dwellers

Let’s preface this section with one important fact – most people are still going to the physical store to get their groceries. Online grocery sales only account for 4.3 percent of total spending for food and beverages. But this percentage is expected to grow to 20 percent by 2025. To put this into perspective, online sales last year were the equivalent of 764 stores. But online sales in 2025 will be the equivalent of nearly 3,900 stores.

If you looked at a cross-section of online grocery shoppers, you’d find that most of them are living in densely populated areas that offer meal delivery and grocery delivery services. Millennials seem to be more welcoming of these services than older generations. What it means for grocery retailers is that there will need to be a convergence of their brick and mortar assets as well as their digital assets to remain competitive in the new grocery retail environment. As Amazon zeroes in on the grocery retail industry, stores will be kicking their new digital strategies into high gear to offer the kind of convenience customers will come to expect.

The Grocery Industry Changes Impact on Rural Consumers

For consumers living outside of densely populated areas, there is no doubt their grocery shopping habits will be altered as well. Rural consumers crave quality and convenience just as much as anyone else. The top 3 reasons a rural consumer shops at a grocery store are price, location and selection. Location is important to them because getting all they need in one stop is a key factor in their shopping experience. Because they often must drive long distances to reach a supermarket, their trips are planned. In fact, they are 11% more likely than their urban counterparts to make a list before shopping.

It may be no surprise these rural shoppers are 6% more likely to shop in a physical store for their groceries than their urban counterparts, who may be more inclined to shop online. In fact, 72% of rural consumers say they do not purchase their groceries online. This is about 4% higher than their urban counterparts. But while this gap has remained consistent between rural and urban consumers, the two groups are following the same trendline – which is showing a decrease in the number of consumers who say they do not purchase groceries online.

With more stores like Walmart offering grocery pickup, it will be interesting to see if more rural consumers take advantage of this service and begin opting for online ordering. Time will tell how this all plays out.

What Does the Future of Grocery Shopping Look Like?

We think, regardless of witnessing a move to online shopping across the board, direct mail and coupons will still be very much a part of the grocery shopping experience for both urban and rural consumers. This isn’t a wild assumption…let’s walk through the logic.

Currently, 62% of adult consumers in the U.S. indicate coupons influence their purchases. What about direct mail? According to Inno Media, 42% of millennials and 34% of generation x have an “extremely strong” attachment to the mail. This means that the clear majority of them are taking the time to sort through their mail each day. They are enjoying the privacy, reliability and security of mail. They enjoy receiving mail, and look forward to checking the mail each day. Fully 52% of millennials and 57% of generation x have a “strong” attachment to the mail, meaning most them are taking the time to read their mail. They prefer scanning mail to receiving emails, and they look forward to receiving the mail each day. For frequent grocery shoppers, 71% saw an ad or coupon in their mailbox that led them to some action in the last 12 months (2017).

We can logically conclude that, at least currently, ads and coupons in the mailbox are effective in terms of influencing purchases. But what about online shopping? Do direct mail/coupons have any influence in digital retail? Yes! For 64.1% of e-commerce shoppers, ads/coupons in their mailbox led them to take an action in the last 12 months – this is an 8% higher difference, compared to all adults 18+. This supports a reasonable assumption that mailed ads and coupons are going to remain effective even as more groceries are purchased online. Perhaps the only difference will be that consumers will redeem their coupons from their sofas versus checkout lanes.

The Bottom Line – Direct Mail Delivers Sales to Both Online and Offline Stores

So back to our original question – has the ritual of grocery shopping fundamentally changed? We believe it’s certainly changing in some ways, but the things that are influencing purchases will likely remain a part of the ritual. Everyone appreciates a good deal on the products they enjoy – whether they are standing in a checkout lane or clicking the checkout button on their laptop at home. Direct mail continues to be a highly effective medium for grocery stores looking to grow their business and attract the rural customer. Want proof? Download the grocery store success stories below for detailed direct mail campaign results.

Interested in learning more about how Mspark can help you grow your grocery store business and increase return on your advertising spend? Fill out the form to get started today!

GROW YOUR GROCERY STORE BUSINESS

Sources:
CNBC, 2017
Prosper Insights and Analytics, 2017
USPS Mail Moments 2016 Review
AdMall, 2017