Shoppers to grocers: Make digital ads relevant

Grocery shoppers are tired of seeing so many digital ads online and are only likely to click on them if they’re relevant to their own needs, according to Grocery Doppio’s January 2024 Digital Grocery Performance Scorecard. 

The report, a project from data analytics firm Incisiv and digital commerce and fulfillment solutions provider Wynshop, indicates that 93% of shoppers said the relevancy of digital offers influences their purchase decision; although, 91% said there are too many ads online. 

Nearly three-quarters of survey respondents (73%) have clicked on an ad because they found it relevant, and 84% clicked on limited-time-only deals. 

Grocers surveyed in the study are optimistic about retail media networks, with 13% predicting a rise in revenue in 2024. They also largely believe AI is a “key enabler of retail media success,” with 82% agreeing that AI can improve shopper targeting. 

Another 87% think AI can improve pricing and inventory management, but fewer than 7% of survey respondents are using artificial intelligence for this purpose, according to the study. 

“AI is the real story here,” said Charlie Kaplan, chief revenue officer at Wynshop, in a statement. “Shoppers respond positively to online grocery ads, but only if they are timely and personally relevant. Grocers’ ability to finely target offers to the preferences of individual shoppers using AI will be the key to success in the retail media game this year.”

Grocery sales were up 4.7% year over year in January at $76.5 billion. About 13.8% of grocery sales were digital in January at about $10.6 billion. That’s down 1% from a year ago. 

Basket sizes and the number of items per basket were both up for digital orders in January. The average digital grocery basket was $176.1, up 11% from January of 2023. 

Third-party sales remained level in January from the previous month, dropping a 10th of a percentage point from December to 14.9%. That’s down substantially from over 30% in January 2022.

Delivery maintained its dominance in fulfillment methods in January, capturing 51% of the market, compared to pickup’s 49%.