Online Grocery Shopping: eCommerce Best Practices with Instacart

Presenters:
Vishwa Chandra
Vice President of Retail Accounts
Instacart

Danny Silverman
Senior Vice President of Customer Strategy
Clavis Insight

Description:
Global FMCG eCommerce continues to surge with sales expected to grow to $53 billion in 2016. With this growth, the myths and barriers of online grocery shopping adoption continue to be broken, meaning brands that adapt to the changing marketplace can gain revenue and market share over competitors who might be resistant to eCommerce.

Using clickstream and transactional data from Instacart, and online store analytics from Clavis Insight, this session looked at real examples of online grocery shopper baskets to:

  • Shatter popular misconceptions about what is, and what is not, shopped for online.
  • Identify the key drivers of the online grocery path-to-purchase.
  • Highlight how consumers’ off-line purchases are influenced by what they see in the online store.
  • Provide a scalable framework for brands to optimize their presence in online stores.

About the Presenters:
Image_VishwaVishwa Chandra is a member of the executive team at Instacart where he currently serves at Vice President of Retail Accounts, responsible for all retailer partnerships for the company.

 

DannyDanny Silverman is Senior Vice President of Customer Strategy for Clavis Insight where he helps brands enhance equity and drive sales at online retailers with data driven insights and experience informed action.

 

 

Webinar Transcript

PaulWe are excited to partner today with Instacart. Instacart is building the best way for people everywhere in the world, for online grocery shopping. Instacart allows consumers to shop for groceries, by the web or phone and have orders delivered in as little as an hour. You can learn more about Instacart by visiting their website instacart.com.

I am now pleased to introduce today’s speaker. Vishwa Chandra is a member of the executive team at Instacart where he currently serves as VP of retail accounts, responsible for all retailer partnerships for the company. Prior to Instacart, he was a partner at A.T. Kearney, where over the last 12 years he was responsible for building their food and mass retail practice.

Danny Silverman is Senior Vice President for customer strategy and success at Clavis Insight. Danny is a global CPG/FMCG ecommerce business strategy and sales thought leader, with over ten years of industry experience working with dozens of the world’s largest CPG/FMCG’s. Throughout his career, he has helped brands enhance their equity and drive sales at online retailers with data-driven insights and experience informed action. Danny, over to you.

Danny: Great. Thanks, Paul and it’s wonderful to be here again with a number of you I know have joined these webinars in the past, so welcome and thank you for joining and just very excited to be presenting with you once again.  

Just to set this up a little bit, CPGs historically have resisted ecommerce. It’s something that hasn’t always been innate to the culture, to the company and for a while early on in the industry there was resistance to adopting it and adapting ecommerce. Paul, if you can go ahead, I can’t advance the slides. If you can go ahead and just open it up all the way and I’ll just talk to this.  

Basically if we go back to say 2006 which is about the time when Amazon started exploring consumables here in the U.S. you really had only the fringe companies and this is a visual from Seth Goden recently that kind of rethinks the technology adoption curve and so if you think about this and you go back to the 2000s you had a few companies. In 2010, it was so very risky, it was very niche, you only had a couple of companies in the space. Maybe Proctor and Gamble, Unilever, J&J and others just sort of seen what’s out there. Around 2013, companies were starting to get more interested in saying, “Ok, do I need to partner. When do I need to get involved? How do I do this?” 2015 we see as a pivotal year. It was the year where there was a major shift in attitude and approach. It was no longer a question of if or when but how and now and we’re already behind. 2016 is all about of hitting the ground running and really accelerating your ecommerce efforts.  

The context behind all of this, in the always outer ring is, of course, our shoppers and consumers are already there. They’re already shopping ecommerce. They’re already looking at retailer sites on their phones. They’re already learning about our brands through mobile and through their desktops. We know that global FMCG ecommerce is growing at a rapid pace. It’s the fastest growth sector. Double digit growth both here in the U.S. and globally.  

The other unique thing about this and part of what creates the trepidation and concern about getting the space is, innovation and technology is constantly changing and it’s driving shopper behavior shifts. The work that we are doing in ecommerce in 2010 or in 2013 doesn’t look at all like the work we’re doing now in ecommerce in 2016, and that’s because there’s this constant flow of amazing innovation that’s coming into the space. So that will continue to happen. While ecommerce is tipped, we’re still in the early days right. There’s still a lot of foundational work to be done in ecommerce until everything really settles out and reaches a point of maturity like we see in bricks and mortar.  

The upside of all that is that because that turmoil is there because there’s constant innovation. It affords constant entry points for brands who are just starting to invest and get serious about ecommerce and while playbooks are being written now, they are also constantly being re-written, and so it’s a bit of hope and encouragement both for brands who have been in this space and are invested and also for those who are looking to jump in and make sure that they’ve really got the right strategy, the right resources, and the right investment.  

So, in essence, you have a theme that… Actually, we’ll just cut through this. It’s The Cheese Has Moved, an overall message of “Okay, we’ve all probably accepted this stage that that cheese has moved. Where did it go? What does that mean? What do we do about it?”

In the U.S. what we’re seeing, in particular, is driving a shift in the last year is the adoption and expansion of pickup and delivery. We’ve had Peapod. We’ve had FreshDirect. Safeway has been experimenting out in the west coast for quite some time. But last year, in particular, we saw Wal-Mart start to get into the space seriously. Krogers done it. Harris Teeter has an express lane pickup service. Peapod added a click and collect or pick-up, starting to very much resemble what we’ve seen in Europe for a number of years now which is the drive format in the U.K. and France, and that convenience that added layer of getting products into the shoppers hand faster is really what’s accelerating the shift to ecommerce.  

That’s a big part of why we’re excited to partner with Instacart today who’s one of those innovators and leaders in the space, who is really doing a phenomenal job in helping shoppers bridge the chasm to ecommerce, bring it closer to home and get it right into their hands faster and more efficiently, even than they could on their own going to the grocery store, and so with that, I’ll hand it over to Vishwa.

Vishwa: Great. Thank you, Danny. It’s a pleasure to be here speaking with all of you. Danny and I first did this talk about a couple months ago at the shopper marketing forum, and we enjoyed the engagement and one of the things before I jump in, I wanted to just share some context. The question we already asked is, “Who’s shopping ecommerce online? Is this only the young professionals? Is this only the youth?” The answer is neither. It is a much broader set of folks.  

As we look across now the last three years that we have been active, we see a number of folks from across different age groups but also representing different need states. It’s not just young professionals. It’s parents. Parents form a large percentage of people who engage in online grocery shopping. It’s office managers who like the flexibility, and it’s even the elderly.  

It’s interesting. I spend a lot of time talking with our customers It’s one thing that all of us do, and talking with the elderly, they still love to go to the store. It’s a big part of their day to day routine. However, they hate to have to go to the store. So it’s services like ours and others take the need-to or have-to out of the equation. Can we go to the next slide?

So another piece of just background context, a little bit about Instacart, our perspectives here are shaped by…we’re in 18 different markets. One thing I am always very cautious about when I talk to folks is this is not just something that microcosm of San Francisco or New York. We’re in 18 markets big and small. We’re in Indianapolis, we’re in Boulder, we’re in Austin. So a lot of what I am going to share with you is based on our findings there, and we are seeing that are representative across different markets. Part of this is you hear me talk quite a bit about is fresh, even as recently as a year ago folks were asked “Are people going to trust someone else to buy your produce, your meat, your dairy?” I think no one disputed the fact that some of your core centers or dry grocery would transition to a digital channel, but there was always a question about fresh, and I like to address that sort of up front. We see significant portions of our baskets, more than 50% of our baskets are fresh. It’s a big part of what we do and what we deliver.  

The other two things you will hear me talk about is ecommerce is not just for large retailers. Danny, you mentioned a number of them but ecommerce is as we look at the 100 plus retailers we work with, many of them are large but many of them are small and we’re seeing an adoption of this across the ecosystems. As you are thinking about this, it is not just the top 10, top 15, top 75 retailers that are thinking about ecommerce. It’s actually across a number of different sizes. Can you go to the next slide?

Great. One of the things that I am going to do is talk about a little bit of some of the myths and realities. Danny and I were thinking about what to share and how to create this presentation. We thought this would be a great way to share some of our findings but also have some fun with it, right? So the first thing that you often hear is in a digital environment, fundamentally growth through shopping won’t translate into a digital environment because how people shop groceries is different.  

You think about all of us, as we go through the store, we walk in the store with a combination of a product list that can be either very structured, and it’s a bullet point list or kinda of like the milk felt light when we poured our coffee this morning. But we walk in with a product list and we walk in with a need state. We have kids that have to have school lunches. We have friends coming over etc. And then the magic happens that’s why we are all in this business. You go into the store you react to what’s on the shelf, what’s available, what’s looking good, what’s on promotion and then that’s where magic happens and translating that digitally is historically viewed to be very tough. Go to the next slide.

The reality is it’s not tough. It takes a deliberate effort right, but as you are thinking about and what I encourage even as brands that if you think about how customer react and respond to your brand, being able to translate that is not a one to one it’s not a lift and shift but underlying buying behavior and making sure the digital platforms are engaging with, are able to translate that to customers. So I’ll just speak about groceries. So if we think about groceries there are a couple things we do. One is that we want to understand what our needs underlying the purchases.  

In avocados, we deliver a lot of avocados. Avocados are, as most of you will know, are the some of the hardest items to actually teach someone to pick. My wife’s a vegetarian and avocado’s a big part of her diet, and she will often shop avocados on our platform and say, “I want five avocados but two of them, I’m going to eat today and three I am going to eat in a couple days.” That’s fundamentally two very different products that we are going to pick. And understanding that need, if we had just said, “Oh, it’s five avocados, grab five avocados and move on,: we wouldn’t be able to understand that and it would result in a disappointing customer experience.  

The second thing is realizing and reacting to the realities of the situation. So out-of-stocks, it is part of what happens in a grocery environment. Well, we always love to be 100% in stock absolutely, but the sheer inventory investment of doing that is greater than any retailer can bear. So what we’ve seen and we’ve built is we’ve said rather than fight it or ignore some of those realities, let’s accept the fact that things are going to be out of stock and how do we build capabilities to address that so be it with substitutions, be it with…

And the third piece is recognizing that even in a digital environment we have a hundred percent need that ability to interact with customers. So we do in our platform, chat, and text and call customers while we’re shopping. Go to the next page.

So I spoke a little about this earlier. Is online grocery shopping for the urban professional? And the short answer, and if we can go to the next page we’ll jump right into it is no. It’s a resounding, resounding no. I mentioned professionals, they’re time-constrained. They value the quickness and speed of this, the convenience of this, but parents, parents who are looking after their kids and previously have had to make decisions on spending time with their children, going to the grocery store after work are able to spend time with their kids. Office managers, elderly, I spent a bunch of time talking about that and then also with value seekers.  

And that’s one thing I would encourage is as brands as you think about this, it’s the perception that customers that you would be engaging with on a digital thing is not just the young professionals. It is a wide breadth of customers that you would normally see in a store and you should keep that aperture as you are thinking about what products you’re pushing through digital channels, how you’re presenting them, and how you’re engaging on them. Go to the next page.

I think the interesting thing as we move from a physical to a digital environment is a physical environment is incredibly static. All of us here, and I am an old grocery guy and I’ve got my starts many years ago at Albertson’s. When I worked with them, you build a store that was really average. You’re trying to build a locally, contextually relevant store that had inventory and you were constrained by the fact that you had a static environment that can meet the needs of a variety of customers. Now, that’s not the case in a digital environment. Can we go to the next slide?

The beauty of a digital shopping environment is how customers shop, you can let them define how they shop and be responsive to their needs and hence, be much more relevant to an individual like me. So creating the individualized experience that drives both greater engagement, better loyalty and a better customer experience. On our platform, we see an equal split between folks that search, folks that browse, folks that just shop from history, folks that create lists and recipes, but understanding that in a digital environment, your ability to create a dynamic shop for customers and once you sort of adopt that mindset, it becomes very interesting because then the lot of the shackles that we’ve all grown up with are taken off. The next page, please.

Last myth that I’ll talk about is around the question that well, is this just a service that we have to offer or are there incremental benefits that we’re seeing for retailers? At the end of the day, there is a cost to provide this service, and that cost either can impact margin or be passed on to the customers or brands and it’s a combination of those three but is there benefits or incrementality from this or is it just a service? Can we go to the next slide?

The short answer, what we’ve found and we’ve tracked this very closely over the last three years I’ve mentioned that know you are attracting new customers. So this is for retailers that are on a digital platform versus just working more, they are able to have a broader reach and get new customers in the door. Customers that end up coming in the door and even existing customers that transition digitally spend more. So we’ve seen higher baskets, two and a half to four times average in-store baskets and this is after looking over time and adjusting for time-shifting of demand but it’s not just about digital.  

What we’ve noticed is there is this symbiotic relationship between online grocery shopping and in-store and folks are shopping both. Part of the shop moves online and part of the shop stays in the store, so retailers aren’t losing those customers to digital platforms, but that old omnichannel experience that people talk about is one that is real. So with that, I’m going to hand it off to Danny. I’ve spent a lot of time talking about hopefully, sharing some facts of the opportunity is real. There are benefits from it. It is different from our traditional experience that you’re used to from a brick and mortar perspective, but really the question comes into how and I think Danny is going to share his perspective on how they’ve helped other brands be successful in this new world.

Danny: Fantastic, thank you, Vishwa. Great insights and we’ll look forward at the end here to having a Q&A session. So as Paul highlighted upfront, be thinking about those questions and submit them and we’ll go through them at the end when we’re done with the slides here. So as we move from the what’s happening, how are shoppers behaving, what are we seeing through the lens of Instacart, the next question is “Okay, so what do we do about it? How do we get started? What should we be prioritizing?” Even those who have started are in a constant cycle of evaluating, are they approaching this the right way and where should they be focused.

So we look at it this way. We talk about your beautiful basics or fundamentals first and that’s the top of the triangle here. It’s deliberately an upside down triangle because it’s meant to go from start to finish or from first of importance down. We could think about it also as the traditional path to purchase shopper funnel, at least the top part of it. And the reason why we recommend starting with fundamentals first and foremost is that if you don’t have those fundamentals there in place, like right titles, right product information, correct images, video, first of all, shoppers are going to have a hard time finding your items because they won’t be properly indexed and searched. They won’t be properly identifiable and more importantly when they get to the item detail page, they will get the wrong information or be confused or not have what they need to make a decision on conversion whether it’s on-site or offline.  

Next focusing on the right assortment. In the early days of ecommerce, it was just, put everything out. We’ll take everything you’ve got. Inevitably, profitability concerns creeped in particularly in more traditional, if you will, ecommerce models like in Amazon using shippers where heavy low-cost products weren’t efficient to ship. Then you have entrants like Instacart and other grocery delivery where weight becomes less of a factor, but it’s a different purchase occasion. It’s a different shopper. So understanding the right assortment by retailer by fulfillment model is really critical because if you go after too much all at once, it splits your efforts, it splits your focus, it splits your median merch dollars, and it even splits things like logistics and can make for a very inefficient approach, so really thinking about what’s the right sharp assortment for each retailer and each fulfillment model.  

And then, of course, being in stock and staying in stock for those who are operators, operators in the space, category managers, activating day to day, this is easier said than done. Staying in stock with ecommerce players is more challenging because you don’t have that inventory pipeline that you do in brick and mortar where you’ll have multiple distribution centers, you’ve got store inventory, you’ve got shelf level inventory. It’s a much leaner inventory system. And so really staying on top of your in-stocks and your out-stocks and identifying where you’re having problems and partnering with retailers to have the right levels of in-stocks both day to day and in advance of focus campaigns, merch media and so on, is critical.  

And then we get to the good stuff right, the fun stuff, making your products discoverable and engaging. Are the right keywords in your content? Are you in the right location within the retailers hierarchy? Is the copying content on page engaging? If this is a new product, what do you want to say to the shopper? We always highlight that ecommerce content and copy is different than digital content so if we think about or packaging content. So if we think about the way content is written for a package, you have a very limited amount of real estate to be as powerful as you can. If you think about a website, you can be very expansive but it’s targeted towards the consumer. If you’re thinking about ecommerce and writing content for ecommerce, you’re selling, and the model I always use, imagine you’re doing an in-store demo, what is the language and wording you would use to sell your product in an aisle to somebody who is standing there? It’s a different tone of voice. It’s a different focus versus digital. So having a focus and a plan around copy and content is really critical to being successful to standing out in the space.  

Ratings and reviews of course critical to monitor, always has been, continues to be. Making sure you have the right tools in place to identify when you have one and two-star reviews that have popped up that you need to respond to. Four and five-star reviews to understand what shoppers love about your products and what you can do more of to build on that. And then of course your merch and media plan and how you’re executing and how your competitors are executing and making sure that you have the right plan.  

Along all of those, there’s this little gear image towards the right and what does that mean? It’s a constant effort, it’s constant work across all of these different priorities and all of these different efforts to keep the gears spinning, to keep the gears turning and each of these in their own way contributes to growth and contributes to acceleration of your current trajectory. But it is cyclical and it is something that keeps going and even when you’ve gone top to bottom then you have to start again at the top and work through it again. But having all of these pieces move in sync with each other is what combined will accelerate your growth and help you stand out above competition and in front of shoppers. Next slide.

So just going through some of these particulars. This is an obvious one. In Insight Clavis, we had our recent company launch for 2016 and all the exciting innovation and things we have planned for this year. We were talking about the early days of ecommerce where making sure every listing has an image was the biggest problem that a lot of manufacturers were facing. By and large, retailers have caught up here. It’s a rare circumstance to find a missing image. Although there are some retailers whose platforms are a little bit more just a little bit rudimentary or not quite as advanced or they’re not quite as focused there where you will see this.  

And so it seems super basic but have that basic check in place. Is there an image in every listing, and then, of course, is it the right image? And right image as many of you will know has, first of all, to do with confidence that you are buying the right product, confidence that when you receive it, it matches what you ordered and of course selling the product and representing your latest product and innovation. Next slide.

As far as titles go, so this is the next thing, so where should we focus first, titles are absolutely critical. It doesn’t matter which retailer in the world it is. The days of alphabetical listings, which is what we used to have, are gone. All retailers have some kind of search algorithm. We know that well. And so being really smart sharp about those titles is critical. This is a major barrier that manufacturers face across the board because, for the most part, your legal and regulatory departments are saying the title that’s on the package is the title you have to use in ecommerce. This really requires challenging that traditional mindset. Bringing evidence and data forward and saying, “Actually, we have the flexibility and the space to articulate our title differently than we do on the package and we have to because that’s critical to being found and being searched on.”  

Great examples are unique. I won’t give specific brand examples, but we’ve seen cases where brands have tried to be creative in describing what their product does instead of using a conventional category term. And so you end up with that unusual term in the search title instead of the category term that your shoppers are using. So being really thoughtful about that, how to incorporate those titles and challenging internally where necessary the norms and expectations of using package title to make sure you’ve optimized and put in as many of those keywords as possible to optimize your search. Next slide.  

That was just highlighting this particular example is now well outdated but in this case, the description was missing on this page and there was the using the word beer versus lager is something that’s very regionally based. Actually, I believe I stand corrected. This is a U.S. based retailer where they took the U.K. based titles and applied them in the U.S. and having the word lager instead of beer under-optimizes the search for the term beer as one example. Okay, now we can go to the next slide.

Awesome. So it’s kind of a bland slide. It’s a visual of understanding your distribution by retailers. So as somebody who’s a former practitioner in the space and still works day to day with some of our customers on their day to day management of their online businesses, knowing what’s online is easier said than done. In the physical world, there are lots of tools that are available internally to understand what you’re shipping to physical retailers. In the online grocery shopping world, we’ve seen tremendous turn on certain retailers in particular, where the items that are on site can change from day to day and there’s a lot of factors that contribute to that.  

The reality is understanding what you have in distribution at each retailer isn’t always as simple as looking at your internal tools but having an external tool also to understand what’s there and making sure it’s the right items, what’s missing, what else could we be adding and comparing it across retailers as well. So it really is one of those critical elements to have the right diagnostics on. Next slide.

Great. So the other piece here is out-of-stocks. This is the kind of thing where if you’re looking at a weekly or monthly report and you’re looking at out of stocks, you’re way too late. And that’s true in the physical world but again in brick and mortar, you tend to have a lot more control over that supply chain and there’s a lot more back inventory and flexibility and ability to act on it. Here, a spike in demand and you think about a media mention that’s unexpected, something going viral or you have a planned media merch campaign that goes better than expected and suddenly you’re out of stock.  

Having the ability, in real time, to be able to respond to that and turn off your media or contact the buyer, the vendor manager and say, “Hey, we went out of stock. Need your help.” Understanding where your parts are vulnerable to going out of stock before they go out. All of that is so important. We’ve seen now hard data that you can correlate to products going out of stock to losing your search ranking long term. So if your product goes both by box as in the case of Amazon or goes out of stock by a retailer, your search rank will drop and you’re fighting your way back up once you come back in stock. It doesn’t resume right where it was and we’ve seen the correlations as well so the direct impact that that has on your POS. So monitoring your inventory levels on your most critical items is absolutely critical. Next slide.

So finally as we look at improving search ranking to deliver more sales, this is a pretty well-established fact at this point. You want to be on the top, you want to be on page one. Probably want to be above the fold, probably really want to be in the top three search for those critical search terms for your most important items. Those first three search positions are the ones that are going to get the most clicks and so really spending some time focusing on it is going to have a direct impact on your goal to be a consideration, conversion sales and so on.  

Again, this is using a Stella example where we saw a very rapid change in rank at a U.K. retailer simply by changing the wording in the title, going from position 67 to position 3 literally overnight. Now not all retailers algorithms respond that quickly, that dynamically, it depends on the maturity of the category and frankly the maturity of the algorithm but in some cases, there are very minor changes that will have a very major impact. Having the insight into what those search terms and keywords are is critical and having the vehicles internally to create those optimized titles and then execute them will lead to increased success in the space. Next slide.

And engaging contents, so I touched on this previously but we know that I talked already about ecommerce content and we had eight-plus pages on Amazon, enhanced content on Wal-Mart, Target. Really thinking about that, we’ve seen evidence, clear evidence that the search algorithms are heavily weighted towards title, in-stock status, but they’re also influenced by things like the copy on the page, keywords that are in there and ratings and reviews. We’ve also seen some very specific data where the addition of taking from a low critical mass of reviews take less than 20 to be above to have a direct impact on search ranking. Some of the retailer algorithms favor items that are, that have more reviews and are highly ranked. So that’s another factor that goes into this too.  

There’s other little nuances on product retail pages that we don’t think about as much but things that are typically afterthoughts like for example the brand link below a title. What that brand link is we typically, well who clicks on it? Shoppers don’t actually click on it but we’ve learned that it actually has, it can have a measurable impact in search optimization and also in your back-end data and analytics to make sure that the brands are properly aligned. So there are little nuances down to each element of a product detail page that warrant attention and making sure that you really focused there and optimized everything possible to make that page as visible as possible to the search algorithms and then of course to shoppers to find the information they’re looking for. Next page.

Great and then I always like to end with this, those of you who have heard from me before are familiar with this, but have fun. I always say this, but this phase, this particular phase in my career is the most fun I’ve ever had and the reason is in ecommerce, we can make an impact so fast that it’s, with the right engagement with the retailers and the right content and resources behind, you can do a lot of very nimble testing and learning. You can see very measurable impact, and there’s a lot more flexibility and room for innovation here than in traditional brick and mortar.  

So it’s a lot of work. There is a tremendous amount of work to get through the weeds and uncover what is in distribution, what is in stock, how do I fix my titles, which images, how do I do all that work but along the way, just keep in mind we’re on the cutting edge here. This is the fastest growing industry. It’s clearly where shopper trends are headed everywhere around the world and those who are working in the space are truly the thought leaders and innovators in retail today.  

So I end with this cartoon as well. For those who can’t see it on their screen it says, “Instead of selling lots of products at a low cost, I’ll be selling a few products for one-million dollars each. No sales yet, but I just started.” So obviously having the right strategy and the right plan in place is critical to success. And with that, I’ll pause here and hand it back over to Paul and we’ll go into some Q&A, possibly do a little commercial here as well.

Paul: Great. Thanks, Danny and Vishwa for really wonderful insights. Everyone benefitted from hearing it. As Danny mentioned, we are entering the Q&A portion of the program. All participants are on mute for this call so if you do have any questions, you can enter them into the Q&A box located on the right-hand side of your screen. And while you’re thinking about entering your questions, Danny will give us just a brief overview of Clavis Insight. Danny back to you.

Danny: Thanks and again thanks everybody for joining. For those of you who aren’t familiar with Clavis Insight, we take the traditional idea of doing physical shelf checks. Checking shelves for what’s in stock, what’s the price, what’s on promotion, what are competitors doing. We bring that to the online grocery shopping space. In an automated fashion, we visit online retailers. We do this every day, any retailer around the world. We’re literally auditing hundreds of retailer sites at this point for thousands of brands and analyzing millions of product listings every day.  

We distill it down into clear measurements. metrics, what’s in stock, what’s the integrity of your content, what’s the accuracy of your images, ratings and reviews for both you and versus competition and we put it into a series of very clear, easy to understand KPI dashboard and metrics. And the really great thing about this is it’s all apples to apples comparison. So you can look across any retailer in the market, any market around the world and see across these core ecommerce metrics, how are these brands of businesses comparing to each other and performing for both yourself and versus competition. Next slide.

So just encapsulating what I just said, we are a global company. We are based in Dublin, but we have very active, growing operations and offices in Boston, London, Paris, and Shanghai and we work with our customer’s local teams at each of those regions. Each office is staffed with ecommerce consultants, customer support, customer success people and those tools and resources you need to be successful in each market.

Paul: Great, thanks, Danny. We are now in the questions and answers portion. The popular questions and concerns that the recording and webinar deck. So all registrants will receive a copy of both the recording of today’s presentation as well as a copy of the deck within the next two business days. So be on the lookout for that by e-mail. And that’ll be released to you before it’s released to the general public.  

So I see the first question here. How can brands be successful with retailers and sources such as Instacart?

Vishwa: Great. That’s a very good question. It’s interesting because as Danny mentioned in this new world of how we’re thinking differently about customer engagement. How we’re thinking differently about merchandising, pricing, promotion. There are a number of ways brands can engage. I’ll speak specifically for Instacart.  

We do partner with a number of brands. We partner with brands in a number of different ways. The first way we partner with them is around discovery. So helping with trials, we need to have a number of ways that we can do that. We offer brands opportunity to sponsor free delivery. I think Red Bull is running a similar campaign on our platform right now. Buy $10 worth of Red Bull, you get free delivery. So that’s an enlisted trial. We have a very active sampling program so we can target sampling by city, by store. Again to portray trials.  

The second area is around discounts, coupons, temporary price reductions. We have the platform called Instacart Deals where brands can offer additional national discounts to consumers on the platform. Those are just two examples. We’re always looking for innovative ways. I think what the fun part is, to piggyback on what Danny was saying is, that things aren’t set in stone right now. The consumers perception and how we are to respond to consumers’ perceptions are still evolving. It’s an exciting time to get ahead of it and actually shape it.  

Danny: I would say to that question as well just briefly, having a plan and taking it to retailers. Having a set of analytics obviously selfishly, we’d advocate to having your Clavis metrics with you. We have heard universally retailers be very appreciative of having this kind of analytics that shows the seriousness and investment in the space. And typically is bringing buyers inside that they themselves may not have access to. So it’s another critical way to partner with retailers and to say, in a true joint business plan fashion, what are your objectives? Here’s our objectives. How do we put together a really strong strategic plan together?

Paul: Thanks, guys. Have you seen any differences in the shopping behavior of online grocery shopping versus bricks and mortar at all?

Vishwa: Yeah, it’s interesting. So we’ve seen a couple of differences and we’re seeing a couple of synergies. So one of the big differences we see is when consumers are shopping online, they’re shopping more. I talked earlier on about larger baskets. And we’ve tracked that because we have the ability to integrate with loyalty programs. So we’ve tracked that, customer purchases over time and actually see an upward trend and there are a couple of things that drive that.  

One is our ability to customize and tailor, going from a static environment to a custom environment which just allows you to identify and meet a greater set of needs. The second piece is the convenience factor. We all have the fact that we have our core store that we shop our brands from but we see bleed into different channels and across channels. So you’ll see as ecommerce and especially convenience with delivery or pickup, I think from a brand perspective, you may see some consolidation within some of the primary shops versus some of the secondary channels I think.  

But the other thing I would add here is we’re also seeing a very symbiotic relationship between stores and online. Customers are not picking one or the other. It’s an and here. The role of the store is very important, will always be very important. It’s how would that seeing customers shop both and shop both consistently.


Danny: And the only comment that I would add to that is a little bit around trip missions as well in terms of online versus offline. And online whether you’re shopping at desktop or on your mobile phone, tends to be a lot more targeted, a lot more specific as opposed to wandering a store. The obvious implication is to impulse buying, the equivalent of a promotion or display online as a digital ad banner or could also be like an item that has five-star ratings as opposed to a one-star rating. But the opportunities to interrupt the trip are fewer and top up a basket are very different. So really understanding retail strategy in each of those regards is really critical, particularly for those brands that are dependent on impulse purchasing.

Paul: Great. Thank you guys. So kind of in this realm with the lot of increments of new customers. Is it almost safe to say that there might be less loyalty to bricks and mortar stores since people are shopping online?

Vishwa: It’s interesting you say that. We’ve actually seen…that’s always one of the big fears is what happens to loyalty in an environment where you’re able to switch between retailers. At least, we’ve seen increased or maintained loyalty. Now some of that is because we, decisions have been made to be a retailer marketplace versus product marketplace. Some nuance but we believe that there’s value from encouraging customers to stick with or build baskets within a retailer versus shopping for the lowest comp possible price across retailers. So we’re seeing loyalties. There is definitely a lower bar to trials so that just means that brands and retailers have to work harder to continue and maintain that customer loyalty. Danny, I know you’ve worked quite a bit in this.

Danny: Yeah, absolutely and really building on that customer loyalty piece. It does become critical when you think about a retailer for example again like Amazon who just is putting out more and more vehicles every day to have people hooked into prime and retailers then like an Instacart service, like how do you stay top of mind, how do you have the easiest fastest most convenient solution for those shoppers is really critical to building and retaining them.

Paul: All right thanks, guys. We have time for one more question so I’d better choose a good one here. So can you share any additional insight for the correlation between out of stock and search ranking?

Danny: I see that question here from Savannah so thank you for that. I think what you’re asking is what is the correlation in terms of how much is it associated, your search rank in terms of staying in stock. Unfortunately, I’m going to say it depends. It varies tremendously on the maturity of the categories and the ranking of the item. Some of the power items in a category will move a lot less and in a mature category, will move even less versus less mature and lower ranked three, four, five items.  

What we’ve seen is anywhere from a 10 to 40% drop in search rank and the longer you’re out of stock, the more that search rank drops so there is also a dependency on how long are you out of stock and what happens when you do come back in stock and a retailer like, if it’s Instacart versus Peapod versus Amazon. How does the retailer treat it? Does the page disappear? Is there a third party marketplace that takes over? All of those factors can build into it. So I would say it ultimately depends. Vishwa, I don’t know if you have any other commentary on how out of stocks affect search.

Vishwa: No, I think the way you articulated it was absolutely right. In more mature categories or more mature products, the stickiness is a lot harder. So search criteria will be more forgiving. If you’re new product or non-mature category, you’d get docked much quicker.  

Paul: Thank you, guys and wonderful presentation once again and thank you all who joined us today.