With brands noting consumers’ pricing anxieties, Instacart is turning to coupons to drive ad sales.
The grocery aggregator announced Wednesday (Nov. 30) the launch of its Promotions suite of advertising offerings for consumer packaged goods (CPG) brands, offering self-service options for showing consumers personalized deals, promotions and coupons.
“With the average cost of groceries going up, we’re proud to unlock more ways for consumers to save money and connect with their favorite brands and retailers via Instacart,” Ali Miller, VP of ads product at Instacart, said in a statement. “With the launch of our new Instacart Promotions, all of our brand partners now have the ability to set up coupons and promotions that can drive meaningful business results while also passing on more savings opportunities to consumers.”
The news comes as brands are challenged to work harder for shoppers’ spending, with rising prices prompting many consumers to switch to lower-priced options. Research from the October edition of the Consumer Inflation Sentiment study, “Consumer Inflation Sentiment: Consumers Buckle Down on Belt-Tightening,” for which PYMNTS surveyed more than 2,600 consumers in September, revealed that 37% of grocery shoppers reported purchasing lower quality products to reduce their expenses in the face of inflation.
Instacart is not the only grocer leveraging data-informed digital coupons to drive ad revenue in the face of consumers’ pricing anxieties (and CPG brands’ consequent concerns about sales volumes). Kroger, for one, has been offering deals-focused solutions to advertisers, leveraging its insights about consumer behavior to promise effective targeted promotions.
In a recent interview with PYMNTS, Barbara Connors, vice president of commercial insights at 84.51°, the marketing insights subsidiary of the grocery giant, argued that targeted deals and coupons can mitigate the extent of this trade down, offering brands a way to reach these price-sensitive shoppers.
“Historically, the reasons why someone may continue to be brand loyal just may not hold anymore because people are being forced due to financial constraints to make tradeoffs that they wouldn’t want to make,” Connors said, adding that coupons and special offers can help maintain their loyalty.
Research from PYMNTS’ study “Big Retail’s Innovation Mandate: Convenience and Personalization,” created in collaboration with ACI Worldwide, which draws from a survey of 300 U.S. and U.K. retailers, found that 74% of grocers think that consumers would be very or extremely likely to switch merchants if digital coupons and rewards were not provided.
Get the study: Big Retail’s Innovation Mandate: Convenience and Personalization
Moreover, findings from PYMNTS’ study “Decoding Customer Affinity: The Customer Loyalty to Merchants Survey 2022,” created in collaboration with Toshiba Global Commerce Solutions, for which we surveyed 2,000 U.S. consumers, finds that 42% of grocery shoppers stated that the availability of loyalty programs with rewards they like would improve their loyalty to merchants.
Read the report: Decoding Customer Affinity: The Customer Loyalty to Merchants Survey 2022
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