Deal-Seeking eGrocery Customers Prioritize Brand Recognition Over Loyalty

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When looking for deals online, grocery shoppers want the reassurance of buying from familiar, trusted companies, but they may be willing to sacrifice their loyalty to any given brand in order to get the best bargain.

In an interview with PYMNTS, Louise Fritjofsson, co-founder of Martie, an overstock platform selling shelf-stable groceries at discounted rates, noted that consumers may not be willing to take a chance on unknown entities, but they are happy to shift brands to get a good deal.

“We realized that … we couldn’t offer … unknown brands that you’ve never heard of or that are coming from different countries,” Fritjofsson said. “But we also see that our users are not loyal to brands. So, they’re not coming to buy the same brand again and again. They want to see that they recognize brands in the experience, and then they are going to shop for the best price.”

Fritjofsson noted that the rise in inflation across various product categories has been prompting consumers to look for more affordable options. Deal-seeking behavior is indeed quite common in grocery. The PYMNTS Intelligence study last year, “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” found that 44% of grocery shoppers are deal chasers, willing to go wherever they will get the best price.

While these bargain-seeking consumers may not be particularly loyal to a given brand, they do expect to always be able to get the same kinds of products. For instance, Fritjofsson explained, if they buy nut butter one week, they expect to be able to get it again the next, even if it is from a different company.

“That’s how we can build retention and make sure that customers know that they can always find the type of foods that they’re looking for in our store,” she said.

Plus, the focus on shelf-stable categories enables the company to “remain a really high gross margin” business, which is typically challenging in online grocery.

Overall, PYMNTS Intelligence research finds that online grocery is the one eCommerce category where consumers are most loyal to retailers, per the study “How Preferred Payment Availability Can Reduce Cart Abandonment.” The report, which drew on insights from a survey of more than 3,500 U.S. consumers, found that 44% of consumers prefer retailers’ websites or apps when shopping for groceries online, while only 29% prefer online marketplaces and 24% prefer brands’ sites or apps.

Plus, most grocery shoppers do so online at least some of the time, according to “Consumer Interest in an Everyday App,” a PYMNTS Intelligence and PayPal collaboration. Drawing from a survey of more than 2,200 U.S. consumers, the report found that 61% of consumers who shopped for groceries in the previous month did so online at least some of the time.

Martie relies heavily on data-driven insights to inform its decision-making processes, from inventory management to customer personalization. Looking ahead, Fritjofsson emphasized the importance of enhancing personalization through artificial intelligence (AI)-driven insights to further tailor the shopping experience. By leveraging data analytics and machine learning algorithms, Martie aims to offer personalized recommendations and promotions that resonate with each customer’s unique preferences and shopping habits.

“We use a ton of different tools and AI to make sure that we’re showing the right product for the right people,” she said. “The more you use our service, the better the experience is going to be … [and] going deeper … is one of the biggest tasks that we have on the product side for 2024, 2025.”