Grocers See Connected Recipes as Tool to Drive Q4 Spending – PYMNTS.com
As consumers settle in for a chilly winter at home, supermarkets are ramping up their stable of connected recipes to not only capture an uptick in cooking but to drive spending, increase basket size, boost loyalty and swipe share from restaurants.
Take, for instance, Walmart, the world’s largest grocer. The mega-retailer’s “Cookshop” interactive content portal currently presents consumers with shoppable recipes and activities, with featured posts including a roundup of winter beverages, a featurette of similarly eCommerce-integrated “holiday hosting hacks” and others.
These online tutorials, many of which are made in partnership with major brands such as Kraft or Starbucks, embed “shop your ingredients” buttons and other shopping list features into the experience, leverage consumers’ demand for entertaining and/or informative content to create sales opportunities.
While these digital experiences go well beyond what most competitors are doing, it has become the norm for supermarkets to offer static shoppable recipes on their sites. Kroger, the United States’ leading pure-play grocer, has its collection of suggested winter dishes, and Amazon’s Whole Foods Market has its seasonal recipes too, in addition to roundups for several winter holidays.
Additionally, video commerce solution Firework announced earlier this month the launch of an in-video checkout solution. The company has worked with grocers such as Albertsons and The Fresh Market, in addition to Walmart, suggesting that more shoppable livestreams and non-live video content could be coming in the near future.
Plus, startups are emerging to seize on this connected commerce opportunity. Former Google employees Alejandro Oropeza and François Chu are looking to make shoppable content a larger part of how groceries are purchased with their recently-launched app Flavrs, a platform specifically for these kinds of food-centric, eCommerce-enabled videos. The beta went live backed by a $7 million seed funding round led by Andreessen Horowitz.
At the best of times, the holiday season presents grocers with the chance to drive sales of premium products and to see larger baskets, with consumers buying in bulk for their celebratory gatherings. This winter poses an additional opportunity for these retailers on top of that, offering them the valuable chance for to capture spending that would otherwise go to restaurants, with rampant inflation prompting many consumers to reevaluate their food spending and make the shift toward more affordable at-home food options.
In fact, PYMNTS’ recent study “New Reality Check: The Paycheck-To-Paycheck Report — The Holiday Shopping Edition,” created in collaboration with LendingClub, draws from a survey of more than 3,400 U.S. consumers about their holiday season spending. The study finds that 38% of consumers expect to spend more on groceries during the season this year than they did in 2021. In contrast, only 22% said the same about restaurant purchases.
Meanwhile, only 26% reported that they expect to spend less on groceries, while a slightly higher 29% said they would spend less on restaurant dining this season.
Get the study: New Reality Check: The Paycheck-To-Paycheck Report — The Holiday Shopping Edition
Furthermore, restaurants’ seasonality highlights the opportunity that late fall and early winter offer for grocers to gain share. For instance, in November last year, total restaurant spending amounted to about $75 billion, well below the roughly $91 billion spent at restaurants six months later, in May 2022. With that downturn in dining out, grocers can drive sales, offering an at-home option for consumers to enjoy in the comfort of their own central heating.
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