Unilever uses grocery delivery service to ‘test and learn’
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
Unilever is one of dozens of CPG partners finding Instacart to be more effective in certain ways when promoting their brands than traditional shopper and in-store marketing in the brick & mortar environment.
“The big dilemma for brands is how do they affect the consumer in that ‘last mile,’” Dan Bourgault, head of brand partnerships for Instacart, told CPGmatters. “Well, we’re the last few inches, with people sitting with the phone in their hand selecting where they want to shop and what they want to buy.”
Unilever remains in “test-and-learn phase” with the online grocery delivery service, Ajay Salpekar, director of e-commerce and new business development for Unilever USA, told CPGmatters.
Free-delivery promotions “have worked very well for us,” Mr. Salpekar said, particularly with ice cream since it’s an impulse item. Shoppers have to spend at least $10 on the brand to waive Instacart’s $5.99 delivery fee. Said Mr. Bourgault, “It doesn’t diminish the price for the brand, but it provides a huge incentive to consumers.”
Free-delivery testing in other categories has been more mixed.
“Hero placements” across a category banner page on Instacart so far “doesn’t produce as significant spikes in consumption as the free-delivery promotion,” Mr. Salpekar added.
Unilever has tested sampling, which includes added products dropped off with deliveries, with Degree deodorant and is looking at the technique to support new product innovation.
“You can get a lot of answers at Walmart, but you don’t have a one-to-one relationship, and there’s a disconnect between the brand between manufacturing and the time it takes to get into the brick-and-mortar channel,” said Mr. Salpekar. “Then it sits on the shelf and you don’t have direct feedback. But with Instacart, you get the numbers the next day.”
Finally, Instacart Deals, by which shoppers view and redeem coupons on the spot, promise more efficiencies than the traditional coupon distribution model.
“We’ve flipped it to a redemption-based model,” Mr. Bourgault said. “Brands don’t pay for the coupon program unless we’ve delivered a physical sale of their product. They already know what the ROI is before they place an order for us to run an offer.”
DISCUSSION QUESTIONS: What might brands gain from digital promotions through grocery delivery services that they can’t tap with traditional retail marketing? Which of the promotional vehicles being offered by Instacart seem most beneficial to brands?