Grocery stores are a unique type of retailer, both in what they sell and that it’s a need, not a luxury, for every consumer. The grocery industry has undergone many changes in the past few years, including a rise in demand for pickup and delivery. These retailers are also diversifying their ad buys, with the vertical projected to spend more on local OTT/CTV in 2023, per the BIA U.S. Local Advertising Forecast 2023. To align yourself with their needs, we’ve put together some grocery store OTT ad ideas.
First, we’ll look at the state of grocery and why they are spending more on OTT. Then, we’ll give you some creative ad ideas to pitch.
The State of Grocery
As noted, the grocery store sector has rapidly evolved since 2020. During the pandemic, consumers flocked to BOPIS (buy online, pick up in store) and delivery. These were a small percentage of grocery sales before 2020. In 2019, e-commerce accounted for only 3% of sales. By 2024, experts project that 163 million consumers will use online options to shop.
Consumers enjoy the convenience of this option and are continuing to use it post-pandemic. As a result, grocery stores have repositioned messaging to focus on this. In doing so, they’ve had to reconsider consumer needs and preferences.
The other big story for grocery stores is inflation, which has increased food prices. However, there’s been some relief here. The CPI (Consumer Price Index) sat at 6% at the end of February, the eighth straight month it’s fallen. Food costs did decrease as a result.
However, the grocery industry is feeling the pinch from those most impacted by inflation. It’s also created a new competitor — dollar stores. They are now the fastest-growing food retailers. To combat their gaining of market share, traditional grocery stores must express to customers their advantages over dollar stores, such as selection, loyalty programs, the store experience and amenities.
Thus, there are both challenges and opportunities for the grocery store industry.
Grocery Store OTT Spending
Grocery retailers realize the value of OTT advertising. It’s a way to target ads to specific demographics and geographies and reach those who don’t tune in to broadcast TV. The spending on OTT is still much smaller than on TV spots, but it’s growing, especially for delivery. According to a report, grocery delivery ad budgets for OTT increased by 14% from 2021 to 2022. The connection? Grocers believe those watching streaming are the same customers as frequent online shoppers.
OTT ads also deliver a captive audience since, in most cases, they aren’t skippable. Their visual and audio components offer an opportunity to connect to viewers and personalize content. So, what kind of grocery store OTT ads should you recommend?
Grocery Store OTT Ad Ideas
Before you pitch, you want to know the advertiser’s objectives and where they want to grow. You can define this by performing a CNA (customer needs analysis). Here are some inspiring OTT content concepts to share with your local advertisers.
- Emphasize the community aspect of the grocery store: Local grocers must compete with dollar stores and retail titans (e.g., Walmart and Target). They may not have the lowest prices, but what they do have is a place in the community. More people want to shop locally, so this kind of messaging supports this. Tying in how the company helps the community through donations or events are all great things to put in ads.
- Discuss the experience: Grocery stores pride themselves on delivering outstanding service. Larger retailers often fall short here, so ads that demonstrate interactions and even include customer testimonials are a win. Highlighting clean, easy-to-navigate store layouts is another option.
- Showcase the selection: Does the retailer have a special inventory or wider ranges than most? Many people have strict diets they follow. Others want to find ingredients that are specific to cultural cooking. Making this part of ads can attract new shoppers to the store.
- Discuss deals and loyalty programs: Most grocers have loyalty programs and always have weekly sales. Price-sensitive shoppers will want to know about this and how much they can save. If there are other perks to being a loyalty member, those should be part of the ad spot.
- Remind shoppers of more ways to order: Finally, for grocery stores that have a high demand for pickup and delivery, ensure they keep it as a messaging pillar. If there are ways to differentiate the offering from their competitors, that’s the hook. Overall, it’s the convenience factor that consumers love.
Grocery Store Advertising OTT + More Tactics
In presenting OTT ad ideas to grocery stores, you’ll want to create a cross-channel proposal. It can include linear spots (TV and/or radio) and other digital tactics. With an omnichannel campaign, your advertisers will see better results, and you’ll capture more revenue. For example, geofencing competitor stores to serve digital ads to consumers could get them to switch.
Get more ideas for local ads using our Create the Ideal Digital Ad Mix tool. You can create custom recommendations based on eight advertiser goals.