Generation Z spends 20% of their grocery shopping dollars online, eclipsing other generations, and data shows they prefer shopping at big box stores for groceries, according to Swiftly.
Swiftly, a provider of technology and retail media and technology solutions, says this presents a massive hurdle for independent and regional grocers who need to gain loyalty among this consumer set to survive and thrive. A retailer app powered by Swiftly includes video ads to provide these grocers with the tools they need to level the playing field versus the Big Box stores, the company says.
From YouTube to TikTok, video is Gen Z’s native format. According to eMarketer, more than 96% of Gen Z watches digital video every day. This offering has the potential to transform the way regional and independent grocers communicate with this emerging shopper set, Swiftly says.
The Packer spoke with Swiftly co-founder and Chief Technology Officer Sean Turner to learn more about the app’s potential in reaching the Gen Z demographic as well as how it helps with marketing in the fresh produce industry.
The Packer: What are some of the specific challenges that regional and independent grocers face when competing with big box stores, and how does Swiftly’s in-app video ad solution help them?
Turner: Let’s take a step back and get some fun facts. When you think about your local and independent grocers, a lot of them have been giving up shares to big box stores. They’ve been giving up shares even to club stores and to digital giants like Amazon, and that puts some of them in a pretty tough position, especially with respect to younger shoppers.
So when you look at Gen Z, Gen Alpha, even millennials, part of the challenge is that a lot of the marketing tactics that those independent groceries grew up on — things like the paper circular — are really going by the wayside, and so their soapbox or their megaphones are going away.
We were just talking to a grocer in the Washington area. Apparently, the Washington Post is ending paper distribution. So, how are the retailers going to reach their shoppers? If you can no longer be part of that distribution route, how are shoppers going to find out about your best deals and remember your brand? And what that does is it really gives advantages to the Amazons of the world and the Walmarts of the world that have these very sophisticated marketing teams able to reach out to shoppers digitally.
We looked at that and realized there’s got to be some way that independent grocers can better compete. And we’ve seen that there is a really big opportunity to reach millennial, Gen Z, Gen Alpha shoppers digitally, especially for small groceries. Because, when you think about it, they’re actually some of the least brand-loyal shoppers — especially Gen Z and Gen Alpha — out there. And that seems to be true across multiple verticals. Whether it’s your car brand or your fashion brand, they’re just less brand loyal, even to their grocery store.
Still, that’s an opportunity for your independent grocers. In a lot of cases, [they] actually do prefer to shop local. They prefer to shop independent. But you have to be part of that mind show, and that’s where we’ve seen this is critical to reach those shoppers and what is kind of their version of the newspaper.
So whereas, in older generations, people would get their news by looking at the paper, for a lot of Gen Z, Gen Alpha, it’s Instagram, it’s Tiktok, it’s digital ads you might see browsing the internet, and those are great opportunities to reach that shopper. One of the areas that we’ve seen be very successful is leveraging video content, because for all demographics of shoppers, video tends to be just a whole lot more engaging than static content, and you can really bring things to life and set a context that is much more difficult to do with a with a static ad.
How about fresh produce in retail? Do you have any data related to produce?
Actually, we see that advertising produce, and especially advertising local produce, performs very, very well for grocers. We ran a campaign with Dierbergs where they advertised a lot of locally grown produce that was fresh and available in their stores in the season, and they were able to market to their coffers. And they grow really significant incremental trips from shoppers, especially because it’s fresh, it just hit the door and it’s local; that was really effective at driving shoppers to make maybe a trip that they weren’t planning or to shift spend from another retailer to come in and buy local.
So, it’s that vibrancy that we think is really special about the independent grocery community. And that’s something that the big box chains with their national supply chains are going to have a harder time doing right, and that is the core advantage, especially of the tens of thousands of independent grocery stores that we have across the country. We think this is a big opportunity for grocers to recapture some of that share and kind of exploit the things that the big guys can do.
