Online groceries and the voucher game

In the bricks and mortar supermarket market, convenience and location play a big part in customer acquisition and retention.  The prospect of £2 off my weekly shop is unlikely to make me go out of my way to a different chain.

However for online shopping with home delivery, the cost to consumers of switching low.  So how best to entice new shoppers to try you out?

online-grocery-supermarket_3

Increasingly the answer appears to be vouchers, coupons and offers.  For example, Ocado, long time holder of the Best Online Supermarket award, has been aggressively pushing first time customer offers and vouchers for quite some time.  They have a regular offer which accumulates to a £100 discount over 5 consecutive orders.  Tescos, Sainbursy, Morrisons and Asda, longtime producers of “traditional” coupons (you know, the ones you actually had to cut out) have all increased the availability and ingenuity of their digital voucher offerings.

Close to 50% of UK consumers now use online grocery services on a regular basis, with around 10% relying on delivery for their entire shop.  Busy lives means that convenience is the main driver behind this trend.  Many don’t have time to make the trip during the week, and really don’t want to vaporise 2 hours of every weekend making the supermarket pilgrimage.  So in this environment, incentivising customers to try your service and build share is a far more realistic proposition than poaching large numbers of bricks and mortar “physical customers”.

In a coming series of articles, we’ll look at the digital marketing strategy different players are using, and how vouchers and incentives are being deployed to acquire new customers.