Marketing Strategies for FMCG/ Grocery Business
Grocery as a business in India is unique due to the sheer variety and the number of distribution models that are available. From small Kirana stores to huge supermarkets to online grocery stores. But the important thing to be noted is that the majority of the grocery business still happens in an unorganized manner through small stores.
There are 12 million stores (reference 1) all across India that account for 90% share in the F&G sector. This is estimated to reach $810 billion dollars (reference 2) by the end of 2020. Interestingly, Indian grocery market is the third-largest (reference 3) in the world.
Introduction
Well, the times are changing and so will grocery business. There will be new entrants and a new generation of entrepreneurs who will do business differently from how it was done in the past. There will be eager for new strategies and would not hesitate from breaking traditions to adopt a new approach to conducting grocery business.
Generally in India, the mom-and-pop stores are operated with a healthy sense of camaraderie within the societal surroundings they operated in. Even today we can see that healthy sense of trust among regular customers, who don’t hesitate to go by the trader’s recommendation. This might change into the future with new entrants and a more corporate “no-frills” approach.
This write-up is primarily meant for an audience who is active in the grocery business. Also, it addresses wannabe and reigning entrepreneurs in the online grocery space. We want to spell out validated marketing strategies for an offline setup and emerging strategies that seem to work for Indian online grocery start-ups.
Marketing Strategies for General Grocery Stores
There might be readers who would wonder why anybody would talk about an offline setup when every other brand seems to think about going online. The fact of the matter is that offline channel still remains relevant, potentially the best strategies come about for a physical store. Let’s look at each one of them one by one:
Product Visibility: In-store product visibility has to do with what is on the shelf as much as what is on the walls. Getting products into the store is the first step, but ensuring that it gets displayed is what generates interest and sales. The same principle applies to in-store signage when promoting newly launched products. To put it all together, there is science behind the process and care should be taken while designing the floor layout and basic philosophy calls for a systematic arrangement of products & signages ensuring better user experience. There is an entire theory associated with the process called “Retail Shelf Space Management” and it does provide results on an immediate basis.
Competitive Pricing: In India, the majority of grocery shoppers happen to be women. And they come with the mindset of saving on costs as much as possible. The owner does not have much of a choice but to adhere to the promise of providing the best possible deal. In line with this thought, owners have to ensure competitive pricing is the norm and is not something that is only offered occasionally or during festive seasons. This is one of the most prudent ways to remain relevant in the competitive grocery business.
Home Delivery Facility: In the grocery business, you are dealing with products of everyday usage and there is every possibility that people run out basic essentials at any time. In order to grab all the available opportunities of making a sale, you have to align your business to become more customer-friendly. Make home delivery one of the highlights of your store and it would bring in more customers wanting to avail the facility.
Implement Automation: Every business today is incorporating available technology to streamline their operations. Don’t be the one getting left behind, implement digitization and automation for better monitoring of your sales and inventory. This will bring in better inventory management and record-keeping would become smoother. An added advantage of digitization is access to accurate statistics that enables better planning that prevents excess stock from getting stored and would eventually save on costs.
Distribute Free Samples: Humans get easily attracted to things that are offered free of cost. This strategy is a psychological hack where you entice the customer to buy by providing a free sample along with a regular purchase. This tactic here is to mouth-off the goodness of the product being offered free and hope that the customer likes it and buys it during his next visit. There is no guarantee of it working but certainly helps deepen your rapport with the customer turning him into a regular.
Marketing Strategies for an Online Grocery Store
There is certainly a range of choices available to the customer (large cities) when it comes to online grocery. A few clicks or couple of taps on the Smartphone and the items gets delivered to your doorstep. This convenience is common to online grocery stores, but the crux here is to emerge as the name that stands out to become a reliable service provider. Here are a few strategies that can help spread the word about your brand:
Search Engine Optimization (SEO): This essentially is the usage of keywords in the content to ensure a high ranking on Google search results to drive traffic and sales. An online grocery store must be able to optimize on-site content in such a manner that it get easily indexed by Google and gets ranked high for prominent keywords. There can be numerous keywords to choose from but a brand must do a good job at keyword research and be able to anticipate keywords that are more likely to be used by prospects. Developing a comprehensive SEO strategy must involve writers working in tandem with SEO specialists to get optimum results.
Social Media Marketing: There are multiple social media platforms and active presence on each one of them is not really necessary. Pick one online channel and execute a strategy for your brand. Facebook is a platform that seems to work for online grocery Apps. Hence it must be integral to your social strategy. The onus here is about generating engagement from the audience through tactics that would induce content from the users and ensure the brand name sticks with them. Repeated exposure to a brand name in the long term will translate into a purchase. By following through with reliable service will bring loyalty and even advocacy.
Paid Social Advertising & Search: This is one of those strategies that allow your brand to get preferential treatment and wider outreach on the platform. It is no longer viable to hope for organic growth on social platforms. All social platforms today have become pay-to-play models and prefer that brands pay for their business outreach. This is true for both search and social advertising, the more you spend, the better are your chances to reach a wider audience. But on all platforms, you can be certain of immediate results and you are only required to pay if there is engagement (CPC & CPV etc). Besides, there are effective tracking and monitoring to ensure your ad money is well spent.
Blog Marketing: One of the effective ways to increase the time spent by your audience on the online grocery website is through a regularly updated and informative blog. The blog has to be a prominent feature on the website and should provide valuable, meaningful and relevant information to the audience. It should be written to address relevant concerns and issues faced by the customers. It can even be a medium to inform about latest offers, product updates and latest product launches on the website. However, to promote a blog and build a following you would have to invest in paid advertising in the initial phases get the audience on board.
Email Marketing: This strategy when executed properly can make you less dependent on social platforms and search results. It has to begin by building an email list of customers who would consent to receive emails from you on behalf of the grocery store. Once you have a critical number of subscribers in your email list, you can send different types of emails directly to your customer’s inbox. This can include welcome, promotional, discount and upsell emails. Ironically, you would have to invest in paid advertising to bring in the audience to sign-up for emails in the first place. Sign-ups can be accomplished by directing traffic to the blog or a special landing page with opt-in forms.
Online Reputation Management (ORM): There are some who view ORM to be having only vanity value. But, this can be crucial in controlling the narrative associated with a brand or business. Brands tend to generate conversations around them both positive and negative. The positive tend to enhance the brand image, but it is the negative that tends to spread like wildfire if not handled properly. By investing resources in ORM and remaining active on platforms and forums like Quora and Yahoo Answers, one is able to channelize the narrative in one’s favour. This is especially true in a crisis situation.
Conclusion
The grocery business is still a growing business in India. The rise of the middle-class in cities with disposal income and increase in rural demand are all contributing factors. The future of grocery business is bright and ideally physical stores must look at an omnichannel approach where they are present both online and offline. Online grocery is still in the initial phases and one is likely to see more consolidation with mergers and acquisitions. Brands must primarily look at satisfying the customer through reliable and timely availability of products. Finally, there are a whole lot of strategies available for implementation but the final deciding authority is the customer.
We at YRC are the leading retail consulting agency in India and across the world. Our expertise has helped shape many grocery businesses across geographies. We provide our consulting and advisory services to business owners who are keen on incorporating the latest best practices prevailing in the industry giving them an edge in the competitive market.