The 4 distinct marketing challenges of being an online food and drink retailer

Food and drink are two commodities that consumers will always need. In this respect you might imagine it to be one of the safest industries to cement your brand, because you should always have shoppers coming back to you time and time again, right? But, as any food or drink retailer will tell you, it’s not that simple. 

In this blogpost we’ll be taking a look at four challenges that food and drink brands have to tackle and how this shapes the way in which they need to highlight value and engage consumers. 

Challenge #1: Competition and future-proofing 

With online increasingly becoming the method of choice for food shopping, especially via mobile, the customer journey has completely changed. Local supermarkets have had to adapt to this change and  join the online landscape and ecommerce giant Amazon now has staff-free brick-and-mortar stores as well as next and same day delivery. It’s predicted that by 2021 more than half of all consumers will be food shopping solely online. 

This has made way for one-product food brands to make a name for themselves, offering specialist alternatives to standard food items or showcasing their USPs, whether that be health-led, organically sourced or tailored to the shoppers’ palete. The growing number of options has empowered customers to choose which food brands they go to for specific products or all of their dietary needs. 

Subscription food services like Deliveroo are on the rise, and It’s apparent that while consumers will always shop for food, their options for where and how they shop will need to adapt to suit the convenience-first model that has become the standard. Amazon has already shaped customer expectations regarding next-day and even same-day delivery. So, as a brand you’re either playing catch-up or having to drive USPs to make up for where you can’t match the ecommerce giant. This means that as a brand you also need to continuously highlight the value that your product provides over a competitor that is just as easily  accessible and may also have physical stores. 

Challenge #2: Getting customers to buy into what you’re selling 

Whether you sell a single product or offer multiple items, it’s essential that you know whether your product is something that consumers will use all the time. This may be products that are based around lifestyle needs – such as a meal replacement or dinner delivery service; or more niche and aimed at specific occasions to be used as gifts, such as confectionary.

Without a clear idea of where your brand fits, you may find yourself stuck in a Dante’s Inferno of discounting in a bid to capture shopper’s attention. This can lead to you missing out on ways to innovate how to position yourself and personalise engagement. It can equally be just as easy to fall into a gifting category as a niche product, if you don’t work to showcase how your product  is an essential part of consumers’ regular food and drink hauls. 

With so many options, the need for an amazing customer experience is paramount. One way of highlighting both value and originality is through brand storytelling. Taking your customers on a journey of how the brand is crafting tailored experiences and why it matter to you, is another way or showcasing why you differ from competitors. 

Price-point may also influence how you are categorised, although this isn’t necessarily something you can control as a marketer. It is helpful to note however, that if your product is more costly than competitors or an alternative to a popular item, it may be necessary to drive home your USPs in your marketing messages. These are things such as being ‘organically sourced’ or using ‘custom ingredients’, to truly highlight why you are a better long-term investment. 

Challenge #3: Replenishment 

In a competitive market, driving brand awareness and acquisition is really expensive. There are sponsored social posts, online ads and the like. With all of the effort being put behind winning over new customers, it can get costly. With such a short sales cycle and replenishable items, food and drink is the perfect vertical for replenishment campaigns. The perfectly timed nudge will encourage your customers to repurchase when their item is running low.  

Repurchasing cycles may vary across verticals and within food and drink differ greatly, and as a result, calculating the right time to send a replenishment reminder has sometimes been a struggle for marketers who lack accurate data. 

One more manual means of achieving this is through order gap analysis. (You can read more about how to calculate it here). This equation calculates the average repurchase rate of an item or category of items, and can be used as the basis of replenishment campaigns.   

Of course, AI and its ability to surface customer insights that would previously require a data scientist working in realtime, stands to contribute a great deal replenishment campaigns, with the ability to identify the perfect moment to trigger a replenishment reminder, and on an individual level.

As automation moves from being triggered by customer action, like the initial purchases, to more predictive and based from insights on their habits, it will be possible to have replenishment campaigns that nudge shoppers to refill on their favourite products from you based on their specific shopping habits. 

Challenge #4: Cross-sell/upsell 

As you’re well aware, cross and upselling  encourages more spending from customers. Doesn’t seem like much of a challenge? Well, things get tougher when you consider the 3 other noted challenges. 

Food and drink is an incredibly competitive vertical, and convincing customers to spend that little bit more than they planned – especially when a competitor may offer a discount or the same item at a cheaper price point – can be tough. If you’re upselling, what value does the increased price add to the order and the customer’s experience of the items? Additional incentives, like free delivery or gift wrapping, can accompany this marketing tactic to encourage spending. But you don’t want to impact the brand bottom line by continuously slashing prices. This may end up diminishing the value of all the items that have been purchased. 

As you tackle Challenge #2 of getting consumers to buy into your brand, showing an understanding of why they shop with you, reflected in the cross-sell options – which can be displayed via dynamic content – will work to make not only the item feel like a steal, but fortify that you see their value as a customer choosing to spend with them. 

Conclusion

When it comes to food and drink,  customer experience is a major deciding factor in remaining future-proof and encouraging the loyalty of consumers. With a large portion of food and drink being perishable items, a focus on retention is key. You can provide both a tailored experience and increase spend with replenishment and up-sell campaigns. And with a vertical that’s changing as much as this one, marketers should be focusing on brand USPs, to hold weight against competitors.