Online sales of grocery items are growing rapidly, with IRI predicting they’ll make up at least a third of total grocery industry sales by the end of next year. This is a huge opportunity for bakers and snack makers, who must capitalize across both the pure-play channel, which includes online-only sellers like Amazon, as well as the omnichannel, which represents in-store retailers like Walmart and Target.
But with so many sellers to choose from across both channels, some companies may be unsure where to start putting their products online. Sam Gagliardi, senior vice president of e-commerce, IRI, said it’s critical brands first get their distribution set up properly on whatever channel they choose.
“If it’s a pure-play like Amazon, you have to make sure you get listed. If it’s with these omnichannel retailers, you have to make sure that they’re bringing their in-store assortment to online,” Mr. Gagliardi explained.
“Once you gain your distribution, that’s when you need to go back and cultivate your product detail page.”
This detail page includes a product’s description, title, packaging, ingredients, benefits, company story and more, and if done right, will help a brand stand out from its online competitors.
“Brands need to own that process,” Mr. Gagliardi emphasized. “Once you own that presence and own what your packaging is now in the online space, then what you finally need to do is drive awareness and drive consumers to that product page so they can actually buy you.”
Consumers’ online loyalty makes driving this brand awareness especially important. When it comes to groceries, shoppers aren’t re-shopping, they’re rebuying off their previous grocery list, Mr. Gagliardi said. Once customers start buying a certain product, they’re going to keep buying it unless they have a bad experience or the product is out of stock.
“That online presence is really the tip of your marketing spear, and if it’s not done right, or if it’s done by someone else, then you’re really losing a significant part of marketing to specific consumers,” he said. “If you’re not utilizing e-commerce as not just another sales channel but also a media channel, then you really are opening yourself up to a lot of competitors winning that purchase. And once they win that purchase, they’re more likely to win the next purchase.”
B.T.R. Bar, San Francisco, for example, prioritizes building a personal relationship with customers so that they keep coming back.
“As soon as we get reviews through our Shopify stores, I reach out to each of our customers. I’m able to set up calls with them and crowdsource more data about what they’re looking for within the snacking industry,” said B.T.R. founder Ashley Nickelsen. “We get this one-on-one time, and we know who they are.”
Having an online rating and review system is great for gathering valuable consumer feedback, but it’s also a necessary tool for driving customer conversion to a brand’s product.
“The number of reviews shoppers want to see in order to feel comfortable making a purchase is important and becoming larger,” said Stephen Chriss, vice president of digital commerce and omni shopper marketing, Campbell Snacks, Camden, NJ. “One to 10 ratings/reviews has a 40-plus % conversion rate, whereas 100-plus ratings/reviews has over a 200% conversion rate.”
Regardless of a brand’s online strategy, it’s important they start small and realistically assess what the size of the prize is. With so many additional touchpoints and labor behind the scenes, profitability is one of the biggest challenges for online food sellers, so companies have to make sure they don’t stretch themselves too thin.
“I’ve seen a lot of small brands get really enthusiastic about getting out and getting everywhere, but there’s just not enough time in the day to do that, so let’s prioritize and start with one or two,” said Erin Heikkinen, vice president of e-commerce strategy and consulting, Advantage Digital Commerce. “Then when we get that right and start to grow, then let’s focus on three, four and five.”
Social media matters
While brands should establish themselves on both channels to drive online sales growth, winning on social media may be just as important. The overwhelming majority of Americans use some form of social media, especially younger generations who will soon make up the bulk of shoppers. Simply putting a company’s product online isn’t enough, and food brands are taking to Facebook, Instagram, Twitter and TikTok to jockey for the attention of consumers.
“A lot of folks are treating the online as a shelf, and they just throw their items up there and expect to reap the benefit of sales,” Mr. Gagliardi said. “If you really want to cultivate growth, what you really need to do is operate what we call an ‘Always On’ type strategy, where you’re actively out working to get your product in front of the right people. And once it is, you’re incentivizing them to purchase you.”
B.T.R. Bar uses Instagram and TikTok to stand out in an increasingly saturated direct-to-consumer market, which makes up about 65% of its sales.
“You have to be very scrappy in figuring out how to put yourself out there,” Ms. Nickelsen said. “By using social media we’re able to really grab our audience and educate them about what makes us different as opposed to just putting up a shop on Shopify. You really have to put yourself out there and figure out what type of content you can be producing, pretty much consistently that’s going to keep your audience engaged and bring new customers in.”
The best social media advertising combines authenticity with the ability to be agile and risky, capitalizing on internet memes and trends that will get people talking, Ms. Heikkinen added.
“We’re seeing greater success by those that just move and shake and do, but do it authentically,” she said. “I’ve seen a million TikTok ads that are so forced, but it’s the authentic ones that draw you in and home in on the right messaging, targeting the right audience with the right meme at the right time.”
B.T.R. Bar has tried its hand at all kinds of TikToks, including recipe ideas, educational videos and funnier, trend-based ones. Ms. Nickelsen has found that their trendy TikToks don’t perform as well, while more personal ones do. In the bar maker’s most popular video on the platform, which has garnered more than 85,000 views and 10,000 likes, she shares her personal inspiration for founding the company.
“TikTok isn’t about commercialization,” Ms. Nickelsen noted. “Gen Z and millennials see through those things, so they really want to make sure they’re buying from companies they like — they know the founders, they feel like they really connect with them.”
Bakeries and snack makers no longer have a choice in engaging with e-commerce. The pandemic dramatically shifted consumer shopping habits, and soon more than a third of all groceries will be purchased online. This growth means brands can no longer think of e-commerce as its own separate category — it needs to play a part in every decision they make.
“We need to drop the letter ‘E’ from e-commerce,” Mr. Chriss said. “E-commerce and commerce are becoming synonymous. Thinking of them as the same thing and part of one strategy is a start in the right direction.”
This article is an excerpt from the May 2022 issue of Baking & Snack. To read the entire feature on E-Commerce, click here.