Betting that consumers are finally ready to do their food shopping online, Grocery Gateway is set to launch the first major mass-media branding campaign by a Canadian online grocery retailer.
Two years ago, www.grocerygateway.com started serving about 400 customers with the fulfillment help of its bricks-and-mortar partner, Longo’s grocery stores. Since then, the company has grown mostly through word of mouth, says Bill DiNardo, Grocery Gateway’s CEO and president, and now boasts an active customer base that numbers ‘in the thousands.’
After two years of debugging its online operation, DiNardo says the company’s shareholders are convinced it’s the right time to make an aggressive move into the mainstream market.
A multi-million-dollar branding campaign will launch in the next two months, aimed primarily at time-starved business people in the Greater Toronto Area, a target group that isn’t necessarily interested in online shopping, says Bruce Philp, managing partner with Garneau Wurstlin Philp Brand Engineering, the agency behind the new campaign.
What does define the group, he says, is a frustration with the amount of time required to do normal grocery shopping.
To talk to these consumers on their turf, most of the Grocery Gateway ads will run in traditional media, including a strong outdoor presence, Philp says. However, the media mix will also leverage the assets of one of the Grocery Gateway’s shareholders, Torstar, by incorporating ads in Metroland newspapers and on the Toronto Star Television specialty channel and Toronto.com Web site.
The biggest challenge, Philp says, is to build the Grocery Gateway brand while also building awareness of the online shopping category as a whole. Getting people into the habit of doing business in a new way is dangerous, he says, because the need to educate potential customers could inadvertently benefit the competition.
Currently, there are two competitors in the Canadian market: Sobey’s-owned Cybermarché (www.iga.net) and Montreal-based The Peachtree Network (www.thepeachtree.com), which operates through an affiliated grocer in Toronto. Peachtree is also planning to launch a major offline branding campaign in two or three major Canadian markets. A spokesperson for Peachtree declined to provide details, however.
Philp, meanwhile, is one of the few Canadian advertising practitioners who can speak from experience about building a brand image for a firm that has no bricks-and-mortar presence – virtual bank ING Direct is one of his agency’s biggest clients. The secret behind the brand-building success of ING Direct, he says, was the appeal of the financial institution’s service and product offering, rather than its ethereal online existence.
Philp says he see parallels between ING Direct and Grocery Gateway. ‘You have to fight the temptation to build all the communications around the process and ignore the product,’ he advises.
As far as the process goes, Grocery Gateway shoppers have access to all the national and private label products and specials offered by Longo’s in its physical stores. Once an online shopper clicks on the images of the products they want, a Grocery Gateway employee is dispatched to hand-pick the groceries from the shelves of a Longo’s store. The products are then checked out and delivered.
To alleviate the security fears that keep many people from shopping online, customers can pay for their groceries by credit card or Interac when they are delivered to their door.
Grocery Gateway’s main source of revenue comes from the $6 delivery charge it adds to each order. Longo’s also pays Grocery Gateway for boosting the retail chain’s sales in places like downtown Toronto, where it has no stores, says Anthony Longo, president of the family-owned chain of nine stores.
Although profits continue to elude Canadian online grocers, if all goes as planned, Longo and DiNardo hope to see profits in the next two to three years.
