Online grocery sales have skyrocketed in the wake of the pandemic. Kroger’s e-commerce sales increased by 92% in Q1 and a COVID-19 Panel Survey by Bizrate Insights found that 30% of shoppers who already buy groceries online will increase their e-commerce purchasing over the next 12 months. The rapid surge in online sales has provided grocers with new revenue streams, but at the same time, presented the challenge of how to retain customer loyalty in a purchase environment with little relationship-building or differentiation opportunity. Fortunately, a solution is fast-emerging: In-Pack Engagement.
Traditionally, grocery retailers were able to distinguish using in-store factors like store layout, customer service, assortment, merchandising, trade promotions and in-store marketing. Loyalty was also captured by promoting connection to customers’ neighborhood community. In contrast, the e-commerce experience removes the connection to local and is highly transactional in nature. Faced with this new reality, many retail marketers are experimenting with the concept of in-pack engagement in order to sustain a personal and direct connection with customers.
In-Pack Engagement Defined
In-pack engagement is when the re-targeting capabilities of digital are brought into the physical world at the most direct and decisive touch point of the e-commerce customer journey: Delivery. Customer targeting at the point of delivery is made possible through delivery bags inserts that feature content, offers, recommendations and rewards fully personalized to the customer. Unlike generic confirmation emails that wind up in spam or in-app messages that go unread, delivery bag inserts are guaranteed to be seen because they are placed among the purchased goods that customers are eager to interact with. Capitalizing on a rare moment of customer receptivity, inserts are a powerful loyalty marketing tool because they occur in the physical world—away from the distractions and noise of digital. Of even greater value is the positive emotion that delivery inserts channel. Unlike digital ads that are often viewed with annoyance, the moment of delivery is highly anticipated, thus any personalized communication layered on top of the purchase is likely to be viewed in a favorable light.
A Post-Purchase Retention Strategy
The value of in-pack engagement extends far beyond the ability to reach customers in a more direct and personal medium. In-pack engagement is an effective customer retention strategy because it occurs in the post-sale, where brand loyalty is determined. Historically, retailers have devoted the majority of their e-commerce marketing budgets to acquisition, but with 52% of consumers reporting that they base brand loyalty on the post-purchase experience (CMO Council Report, “Elevate What Consumer Appreciate”), retailers are placing new emphasis on retention. In fact, the CMO Council found that over 70% of retail executives see the post-purchase as an opportunity to improve customer lifetime value and revenue potential, and 56% of have made it an area of strategic focus.
The Most Underutilized Customer Touch Point
As more consumers shift to online grocery, retailers will need to develop new, innovative programs to maintain customer loyalty. While the delivery phase of the online shopper journey has long been overlooked, retail leaders are increasingly recognizing the in-pack engagement opportunity. By thinking of the delivery bag less as packaging and more as a vehicle of 1:1 marketing, retailers can transform the e-commerce narrative from product to unforgettable brand experience.
Interested in learning how you can bring in-pack engagement to your home delivery service? Call 203-731-3555 or submit an inquiry at http://beshopt.com/contact-us/ to learn more about our managed retail insert marketing program – ActionPack™.