Whether you’re planning your holiday meals—and wondering just how many sweet potatoes a person can eat—or prepping your eCommerce advertising campaigns for the peak holiday periods, one channel is likely top of mind: Instacart. As another wave of stay-at-home requirements sweeps throughout the US, online grocery is poised to continue the rapid growth it experienced in2020, and increased order volume around the holidays presents a unique opportunity for brands.
On Thursday, November 19, the Instacart advertising team hosted a webinar to help marketers understand consumer behavior around online grocery shopping during the holiday season, and they shared some actionable tips that advertisers should consider to maximize brand awareness and sales inQ4. Here are some of our favorite takeaways.
A Big Year for Online Grocery
This has been a year of accelerated growth for online grocery, and Instacart has emerged as the clear leader in the space. During the COVID-19,Instacart experienced a 500% increase in order volume and a 35% increase in average basket size. Instacart also added over 100 new retailers to its platform. Now boasting over 500 total retailers, Instacart has grown beyond the typical grocery store chains to include Bed Bath & Beyond, Best Buy, Staples, and more.
Consumers are taking notice and doing a wider range of their household shopping via Instacart. Food is still, by far, the most shopped category, but other household goods, including cleaning supplies, grew 19% year over year.
This growth trend shows no signs of slowing down. By 2025,in-store grocery shopping is expected to grow by 1.2%, but online grocery is expected to grow by 18%.
Ashley Becker, Director of eCommerce Sales at The Kraft Heinz Company, was one of the panelists on the webinar, and she mentioned why food brands, which had historically been wary of eCommerce, are leaning in now: “It’s about being available and accessible [to consumers] in the places that they choose to shop.”
Increasingly, consumers are choosing to shop on Instacart. 89% of Instacart users say that they see it as an essential service.
Holiday Groceries Create a Q4 Surge
Holiday grocery shopping always creates a Q4 surge on Instacart. In 2019, average monthly orders in Q4 rose by 39% over the August average. This year is sure to bring an unprecedented peak. In fact, just Q3 of this year experience 33% growth over last year’s Q4, so Instacart is entering the holiday period with an already significantly elevated baseline.
Consumer shopping behavior tends to shift slightly during the holidays. Throughout the year, about half of shoppers used Search to find and order products on the platform. That was true for Q4 2019 as a whole, but Search peaked to greater than half on the week leading up to key holiday events: Thanksgiving, Christmas, and New Years Eve. For Thanksgiving, the peak in Search behavior occurred about four days before Thanksgiving, while Christmas and New Years Eve peaked two days and one day before, respectively.
After Search, the next biggest share in terms of where shoppers find and order their products is the Buy It Again feature. That’s why it’s so important for brands to be a first mover on the platform and start getting into consumers’ shopping baskets as early as possible. Once you’re in the Buy It Again mix, your Featured Products campaigns will also push you into the top of these placements.
Another interesting consumer trend is that orders tend to happen earlier in the day around the holidays, rather than the peak evening periods throughout the majority of the year. That said, 45% of orders still happen after noon Pacific Time, so it’s important to keep your advertising visible throughout the day.
Not surprisingly, certain items experience spikes for the holidays. In 2019, cranberry sauce had the highest spike of orders compared to the preceding quarter. However, the highest search spike goes to “powdered cocoa,” searches for which increased 266% in Q4 2019, compared to Q3.
Popular year-round terms still maintained high volumes in Q4,and as more consumers use Instacart for their go-to household shopping due to stay-at-home this year, that will likely remain true.
How Advertisers Can Take Advantage
To take advantage of these holiday trends on Instacart, there are four primary areas advertisers can control: items, keywords, bids, and budget. Here’s how adjust each for the holidays:
o Pick a broad assortment of items to sponsor in your Featured Products campaigns for Q4. With Search as the dominant placement, make sure you’re giving the customer multiple options in their search results, as if they were looking at different flavors or pack sizes in the store.
o Promoting a broad assortment also protects against out-of-stock and thus losing visibility for a given item at a given store.
o Target holiday keywords, and lean in to spikes in traffic. Think about complementary items that you can promote on searches. For example, we’ve seen cheese brands bid on wine and other alcohol-related keywords.
o “Walk the store” to see where you’re winning on Search and Browse and what your competitors are bidding on. Pacvue Share of Voice helps with this and can alert you when an item drops on ranking, or you can uncover gaps in your competitors’ keyword strategy that you can bid on aggressively.
o Maintaining category share is important to Megan Quinn, Director of Sales at Nestlé, who said on the webinar, “We want to make sure that ultimately, when consumers choose to make their purchase, we’re there.”
o The most important place to be in Q4 is Boosted Search, which are the top 3 ad placements at the top of search. These account for the majority of clicks and have a higher ROAS than the Instacart advertising average.
o Make sure your Featured Products are actually showing up and maximizing impressions by using Instacart’s suggested bid, or greater to fend off the competition. When harvesting new keywords for your campaigns, Pacvue can automatically apply the suggested bid.
o In 2019, orders in Q4 were nearly 40% higher than Q3, with spikes around the holiday events, and keep in mind that this year’sQ3 was already at a higher volume than that.
o Many brands run out of daily budget early in the day. You can increase your budget to stay live, or utilize dayparting in Pacvue to keep your ads visible throughout the day and boost bids during high conversion times.
According to Bobsled Project Manager Jordan Ripley in Bobsled’s Guide for the Holidays, “The key when it comes to promotions during Q4 is integration . . . Time promos across sales channels so that they’re in sync and no one retailer is punishing another.”
Other retailers, especially Amazon, will price match or suppress the Buy Box, but beyond these immediate concerns, you want to make sure you are offering a unified shopping experience for the consumer, as we expect high migration between eCommerce sites this season.
Moreover, Instacart is actually in a unique position, given its distributed model and same-day delivery. Many retailers and consumers alike are worried about shipping delays this year. Instacart’s growth in new categories outside of food make it a competitive choice for beauty, pet supplies, and household goods, where it may be the only channel consumers can get the products they’re looking for on-time. In fact, with its new Best Buy partnership, Instacart might soon be the only place where you can get anew TV delivered in time for Christmas morning.
All in all, in order to have a successful Q4, it’s important to show up wherever your customers are ready to purchase. “Once you go into the digital space, categories as you know it, competitors as you know it, are different,” said Diana Haussling, VP of eComm & Omni Shopper Marketing at Campbell Soup Company. Platforms like Instacart enable you to be more creative about reaching consumers, introducing new items, and thinking broader about the consumer shopping experience.