On-demand convenience – here to stay?

One sector that has observed exponential growth throughout the pandemic has been the on-demand convenience (ODC) industry. While originally being favoured by consumers as a way of limiting exposure to the virus, recent data has revealed that it is the sheer convenience of on-demand convenience platforms that is driving consumer behaviour, and in turn, the continued growth of this emerging channel.

Driven by apps like Getir there are now a number of players in the space operating in the UK, with data from Lumina Intelligence showing that nearly 5% of all convenience orders are now being delivered through a website/app with consumers spending 128% more than they would in-store.

Awareness of these services is primarily being driven through Social Media Marketing, however, brand awareness for the specific platforms themselves remains low. This is partly due to the recency of their entrance into the UK market, but also due to the conversation being dominated by larger players including Deliveroo and Uber Eats.

Another challenge being faced by on-demand convenience brands is continued scepticism from both the media and the broader industry regarding their long-term profitability. Whilst several firms in the space have recently closed impressive and significant VC funding rounds (Getir $550m, Gorillas $290m) their services and competitive pricing are currently being funded primarily by shareholder capital. As the industry matures the sustainability of this model will be put to the test, and the long-term success of these brands will provide a useful indication of whether this growth is a pandemic fuelled flash in the pan, or a genuine transformation of the convenience category.

Whilst a relatively young industry, the ODC space is already incredibly crowded. With a wide range of challenger brands in the market with broadly similar value propositions, carving out a distinct voice to win over the hearts and wallets of consumers will be a challenge brands must overcome. Whilst some consolidation is expected over the coming months, for some of the newer market entrants, tackling the first mover advantage of apps like Getir is another obstacle that will need addressing.

Since their UK launch start-ups including Gorillas and Zapp have invested heavily in OOH advertising in order to amplify their brand awareness. Whilst this has shown early signs of success (Lumina Intelligence Convenience Tracking Programme May 21) influencer marketing is a channel with immense potential to build on this progress. Partnering with macro and micro influencers with engaged followings in key regions across the country will be important to not only consolidating this brand awareness, but also building trust amongst a new audience of consumers. In turn educating them about what is a relatively new service.

Social media as a whole will be a vital channel for ODC brands to consider as part of their marketing mix. As well as influencer marketing, both organic and paid have the potential to drive targeted awareness as these businesses roll out across the country. From a paid standpoint, while national awareness will be important, the granularity that geotargeting ads provides will serve to drive impressions and help engage consumers in specific local geographies as these brands grow across the UK. Once awareness is improved, growing engaged communities on social will help complement this paid strategy and influence consideration and interest from consumers. User-generated content (UGC) has huge potential as part of this strategy, showcasing real users benefitting from ODC services. This has the power to enhance organic campaigns and can also be used to support any paid activity.

To maximise impact, any social media strategy should also be supplemented by ongoing media relations support. While funding round announcements are a great way of securing coverage. Genuine behavioural change will only be driven by a sustained PR programme. Educating journalists in influential publications about what it is that makes your brand different and what pain points it can resolve for consumers will help set you apart within the category, reach new audiences, and build trust from potential buyers. A good PR Agency will help you formulate your external messaging and in turn mitigate against any potential reputational damage. As the industry grows, scrutiny on brands will undoubtedly increase so preparing for this will help address scepticism and help turn potential issues in to opportunities.

If you’d be interested in discussing how we could help your brand, get in touch with us today.

Get in touch with the team