Supermarkets Report

Supermarkets Report

Tactics to Target Audiences and Product Categories

Key Findings

The top 3 supermarkets, Tesco, Sainsbury’s, and ASDA, have the highest online population share in the UK, but zooming in to city-level, other supermarkets also compete.

Online searches for “gin” have grown rapidly over the year, and were 93% higher at the start of November, compared to the previous year.

Visitors to Amazon Fresh’s site have grown by 16% since the acquisition of Whole Foods.

1. Audience Targeting

How can Iceland attract the Organic Fruit & Veg shopper?
Tactics to increase market share by location and customer segment

Share by Supermarket – UK Online Population

The three largest supermarkets in the UK *, Tesco, Sainsbury’s and Asda, have over double the online population share compared to other supermarkets.

Supermarkets Report: Share by Supermarket
Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. The above chart shows results for only groceries, for Tesco, Asda, Morrisons and Iceland. * According to Kantar Worldpanel – total sales.
Share by Supermarket – Selected Cities

But when we zoom into specific cities and locations, a different set of supermarkets arise. In Manchester, people are most likely to visit Asda, Morrisons and Iceland online. In contrast, Londoners are more likely to visit Ocado and Waitrose.

Supermarkets Report: Share by Supermarket in Selected Cities
Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. The above chart shows results for only groceries, for Tesco, Asda, Morrisons and Iceland. Index to standard online population in the UK.
Audience Zoom – In Manchester

Zooming deeper into different types of consumers by location, we can see which supermarkets are attracting which segment.

In Manchester, Asda & Morrisons are comparatively more likely to attract the Premium & Budget Range shopper. Iceland largely under-indexes for the  Organic Fruit & Veg shopper.

Supermarkets Report: Audience Zoom Manchester
Source: Hitwise Intelligence & Kantar TGI. Period: 4 weeks ending 28-10-2017. The above chart shows results for only groceries, for Tesco, Asda, Morrisons and Iceland. Index to standard online population in the UK.
Audience Targeting – What can Iceland do in Manchester?

If Iceland wanted to conquest the Organic Fruit & Veg shopper and saw Manchester as a strategic location, what could they do? The supermarket could firstly understand the unique interests and needs of this target segment. One such way is through search term analysis.

Supermarkets Report: Manchester Audience - Search Term Analysis
Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. Selected search terms are over-indexed, compared to the online population.

Iceland may also want to develop regional promotions or ad campaigns for quick online response. Below is a list of websites that the Manchester, Organic Range audience is most likely to visit. Using this insight, Iceland could then strategically select the best affiliates to partner with.

Supermarkets Report: Manchester Audience Online Behavior
Source: Hitwise Intelligence. Period: 4 weeks ending 28-10-2017. Selected webites are over-indexed, compared to the online population.
How to get these insights?

Define your target audience
Combine location, consumer type and competitive share to locate your gaps & opportunities

Understand their unique interests
Delve into the target’s online behavior, such as search terms and websites to build a wider profile

Reach your target audience
Link insights to action – feed analysis into PPC, content, display and partnership opportunities

2. Category Targeting

Who is winning the Gin Category and why?
Tactics to convert high-growth product categories

The Seasonality of Alcohol

Online searches for wine & spirits peaked over the festive season, and remained mostly flat for the rest of the year.

But, compared to other alcohols, searches for “gin” largely differed.

Supermarkets Report: Searches for Alcohol Types
Source: Hitwise Intelligence. 12 rolling weeks to 5-Nov-2017, over 52 weeks. The above chart includes search variations of each alcohol type.

“Gin” searches and variations of the term have rapidly increased since March, and at the start of November, were 93% higher compared to the previous year.

Why have “gin” searches increased?

By comparing keywords around “gin” searches, we can see why gin has grown rapidly over the year.

Supermarkets Report: Top Keywords around Gin
Source: Hitwise Intelligence. 12 weeks ending 4-Nov-2017, YoY

The top rising keywords showed that new products (e.g. advent calendars and baubles), flavours (e.g. pink) and supermarkets (Aldi and Lidl) were trending, in time for this year’s festive season.

The Gin Audience: Share by Region

Growth in gin searches can be seen overall in the online population, but more so in some regions.

The chart below shows the proportion of people within each region searching for “gin”, and how this has changed since last year.

Supermarkets Report: Gin Audience by Region
Source: Hitwise Intelligence. Audience: Top 1000 searches around Gin, over the periods: 4 weeks ending 4-Nov-2017 and 5-Nov-2016. * Relative difference between two time periods.

In particular, Scotland saw a 70% rise in October YoY.

The “Halo” Effect of Gin

Lidl released their award-winning Christmas gins on 31-Oct. Aldi also launched the first Scottish Gin Festival on 2-Nov.

Supermarkets Report: Gin Searches by Week
Source: Hitwise Intelligence. 12 weeks ending 4-Nov-2017, YoY

As a result, searches for “Lidl gin” and “Aldi gin” grew by 732% and 133%, respectively, in the week of 04-Nov.

These promotions were instore, but others have benefited online. Although much lower in volume, “Amazon Gin” saw a 32% WoW rise, the following week.

How can others capitalize?

Only 38% of “lidl gin” searches went to their site directly, and 59% for “aldi gin”. The remaining traffic went predominantly to news and media sites.

Amazon, on the other hand, had 100% of traffic from “amazon gin” searches go to their site.

When we look at searches within Amazon’s site, a number of gin-related products significantly increased. These included: gin glasses, miniatures, calendars and baubles.

Supermarkets Report: Amazon Internal Searches
Source: Hitwise Intelligence. Searches made within Amazon, as a proportion of all searches over the specified week.

So What?
The opportunity to benefit from a halo effect can be direct or indirect. Amazon saw significant rises in searches for gin-related products, and not necessarily for gin brands.

How to get these insights?

Track fast moving search terms
Monitor what is trending week-on-week by product categories

Monitor the impact of competitor campaigns
Assess the uplift from competitor events or campaigns, such as searches or onsite conversions

Connect with your product and promotions
Combat or benefit from a competitor’s campaign -Look at the demand for direct or related products to determine your response

Competitive Benchmarking

Who is Amazon Fresh competing against and for which consumer types?
Assessing competitor audience overlap and product opportunities

Amazon Fresh & Whole Foods: Online Impact

Amazon fully acquired Whole Foods on 28-Aug, and soon after, Whole Foods announced price cuts of up to 40%.

Amazon Fresh and Whole Foods currently service only a handful of locations in the UK (mainly London), so what is their impact online? Visits to Amazon Fresh have steadily grown, with the number of visitors to their site rising by 16% since the acquisition *.

Supermarkets Report: Amazon Weekly Online Visits
Source: Hitwise Intelligence. * Comparing Pre-Acquisition: 9w to Aug-26, and Post-Acquisition: 9w to Oct-28
Amazon Fresh: Overlap with Supermakets

Who is Amazon Fresh sharing their online audience with?

Supermarkets Report: Amazon Fresh Audience Overlap
Source: Hitwise Intelligence. Pre-Acquisition: 9w to Aug-26, Post-Acquisition: 9w to Oct-28. * % Difference: Relative difference in audience overlap, over these two periods.

Since the acquisition, Asda, Waitrose and Ocado have seen a larger proportion of their audience shared with Amazon Fresh.

In particular, Ocado has seen a significant shift of 17% overlap.

Amazon Fresh vs. Ocado: Audience Food Habits

To see why there is a shift, we can compare the types of audiences that Amazon Fresh and Ocado draws.

Supermarkets Report: Amazon vs. Ocado - Audience Food Habits
Source: Hitwise Intelligence and Kantar TGI. 4 weeks ending 28-Oct-2017. The above chart only shows the most regular consumers of wine, spirits, chocolate etc. Index to standard online population in the UK.

Regular buyers of wine and food delivery services are similarly-indexed for both online supermarkets.

Ocado is more likely to draw the regular shopper of fresh coffee and spirits, whereas Amazon Fresh is more likely to attract the chocolate lover.

Amazon Fresh vs. Ocado: Top Product Pages

In the week ending 28-Oct, 4 out of the top 10 products viewed on Amazon Fresh were coffee-related.

Supermarkets Report: Amazon vs. Ocado - Top Product Pages
Source: Hitwise Intelligence. Product pages viewed on Amazon Fresh and Ocado’s website.

But, Ocado attracted a higher proportion of “fresh coffee” drinkers
(potentially not converting as much as Amazon Fresh).

To respond, Ocado could then push promotions on coffee capsules the following week, to secure and convert this audience.

So What?
Amazon Fresh is a growing online threat, and Ocado has seen a larger audience overlap with them. To respond, Ocado could identify product gaps by linking audience data with product insights.

How can I get these insights?

Assess the impact of online disruptors
Amazon Fresh is one online disruptor, but others like My Supermarket have grown over the year. Assess their online impact to your business

Compare your audience overlap
Track the audiences shared with other supermarkets and understand why

Identify product opportunities
Link audience insight to online product performance. Identify gaps in consumer segments, such as where you don’t convert

Key Takeaways

In this report, we covered three actionable tactics for supermarkets that combines online and offline data resources. These were:

How to grow a consumer segment
The Manchester Organic Range Shopper was identified as an opportunity for Iceland. Iceland could then understand this segment’s unique interests to grow engagement, online and offline.

How to convert in a product category
Gin has seen enormous growth this year. Other supermarkets can hop onto the halo effect from Aldi & Lidl’s instore campaigns, such as Amazon, which has seen growing demand for gin-related products.

How to monitor online threats
Amazon Fresh is taking over online audiences. To differentiate, Ocado could then analyse audience breakdown and product performance, to pinpoint gaps and product opportunities.

In summary, these tactics support supermarkets targeting customers and increasing value from each segment.

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