TV viewers in the San Antonio, TX area have almost certainly seen H-E-B commercials over the years that feature some of the NBA’s San Antonio Spurs —including All-Stars like Manu Ginobili, Tim Duncan and Pau Gasol—talking about the Texas-based grocer’s products, preparing foods and praising produce.
It’s a local campaign that’s been a huge hit in the area, and one that has helped the Texas-based grocery get the word out about its stores. Over the past 16 years, H-E-B. has worked with local ad agency The Richards Group to develop the commercials. A spokesperson for the company said it has been “a fruitful” campaign and one that its shoppers “enjoy seeing each season.”
But H-E-B is an exception to grocery stores’ normal promotional behavior. Viewers watching network shows like “The Big Bang Theory,” “Law & Order” or “Modern Family,” or even events like the Super Bowl or the Oscars, see lots of commercials for cars, soda, beer and clothes. Very rarely are there TV spots for grocery retailers.
Dave Morgan, founder and CEO of Simulmedia, which helps marketers with audience‑targeted television, said that since the vast majority of grocers are regional, it doesn’t make sense to go the broadcast route.
Grocery retailers “don’t have much ad money to spend,” he told Food Dive by email. “What money they (and grocery-sold brands) do spend, they want it tied directly to sales and ROI, and most classic media [print and broadcast] doesn’t do a very good job here. ...Digital has targeting and measurement, but hasn’t shown much success yet in driving shoppers to brick and mortar grocery.”
Anand Raghuraman, leader of EY's strategy and customer practice for consumer products and retail, said research has shown that people go to grocery stores for the price, selection, and assortment of fresh products they offer, not necessarily because they saw an ad.
“Grocery items, like food, are essentials to consumers. People need to buy their milk, so it is much more about convenience, price, selection etc. which isn’t aided by TV ads necessarily but is by circulars,” he told Food Dive. Additionally, he believes that TV advertising works well for multi-brand retailers, and manufacturers that use it for single-product category ads.
Most grocers typically don’t feel this type of broad reach, so expensive brand building doesn’t make sense.
“At the end of the day, grocery is much more product focused and so the strategy is very different for the industry vs. non-essential products like apparel,” Raghuraman said. “Consumers have to be ‘seduced’ by apparel. The same can’t be said of grocery unless, perhaps, the grocer is keen to become an authority in fresh or frozen, organic vs. non-organic, etc.”
“Consumers have to be ‘seduced’ by apparel. The same can’t be said of grocery unless, perhaps, the grocer is keen to become an authority in fresh or frozen, organic vs. non-organic, etc.”
Leader of EY's strategy and customer practice for consumer products and retail
Ultimately, it comes down to cost, Raghuraman said. The ROI of TV advertising doesn’t make sense to grocers.
“The grocery industry operates on tiny margins on product level compared to many other retail segments like electronics, apparel, etc. so they have to watch their SG&A (selling, general and administrative expense) much more closely to ensure a positive bottom line,” he said. “As an investment, TV advertising is perishable.”
Retailers in action
H-E-B isn’t the only grocery retailer that finds value in TV advertising.
With a campaign that revolves around the theme of “We Believe in Real Food,” Whole Foods’ latest commercial blends people shopping in its stores with scenes of customers cooking and being connected to “the natural world.”
“Whole Foods Market has launched a new advertising campaign that invites shoppers to experience the benefits of eating food that is fresh, delicious and nutrient-dense, making the connection between eating well and living well,” Mckinzey.Crossland, a spokesperson for Whole Foods, told Food Dive. “Told through the lens of our customers, the campaign highlights how the products we offer are shared and enjoyed every day and the high-quality standards behind each item sold in our stores. Ads will appear on television, radio and digital platforms.”
According to iSpotTV, which does analytics on commercials, Whole Foods had 1,530 airings of the TV commercial in April. It earned an airing rank of No. 595 on its list, with a spend ranking of No. 278 compared to other advertisers.
Kroger created a special commercial for Valentine’s Day. After being “challenged” by his crush to “melt her heart,” a teen purchases an assortment of gifts the store. When she opens her locker at school, inside are teddy bears, balloons, a box of chocolates and even a cake he baked for her.
Last fall, Aldi went the humorous route to showcase its stores and private label grocery staples in a campaign called “I Like Aldi.” The actors in the commercial compare Aldi’s private brand products with their national-brand counterparts, saying they like both, but displaying Aldi's much-lower prices. The retailer made several versions of the commercial, featuring products ranging from salad to cheese singles.
TV advertising is not really in vogue anymore. Some larger players use advertising more to emphasize factors like their broad assortment of items, quality and price than to make a splash in the market.
Of course, there are exceptions to the rule. Grocers may turn to advertising on local TV channels since grocery is a local business. For example, some may invest in a low-cost production ad around a grand opening and target a local audience through a well-known channel.
“Many have tried and failed over the years. Some experiments have been more short-lived than others,” Raghuraman said. “In the past, we have seen multi-brand retailers who also offer grocery utilize TV advertising in an attempt to gain market share in the space and build awareness among consumers. Others have used it in a time of crisis, perhaps after a recall or other incident in order to rebuild the brand. Here, the message to the consumer is, ‘You can still shop safely with us.’”
Dr. Billie Blair, an organizational psychologist and president/CEO of the international management firm Change Strategists, Inc. said most grocery stores now rely on circulars and gave up on the commercial route.
“In their cost-benefit analyses, most have identified TV advertising as not offering sufficient return on their investment,” Blair told Food Dive. “Fresh & Easy tried introducing themselves that way and it didn’t turn out that well.”
Fresh & Easy, based in El Segundo, CA at the time, released a notorious series of commercials in 2013 that tried to play on its name when people said it fast (F-in-easy), relating to how easy it was to shop at Fresh & Easy. The crude commercials were blasted by both shoppers and those following the advertising world.
The rise of digital and circulars
More and more, traditional methods of advertising are being overtaken by digital media.
Many grocers offer digital coupons and there is a lot of movement in the app space. More advanced retailers can send specific ads to consumers based on what they’ve bought in the past or utilize beaconing and geo-location to leverage real-time activity.
“Ultimately, strategy is dictated or dependent on what the retailer is trying to do,” Raghuraman said. “For more broad brand building, TV advertising is very powerful. For grocers, circulars drive purchase, which is what they are typically aiming for with these campaigns and why they continue to be utilized.”
Bob Clary, director of online engagement for Intellibright, noted traditional media is still important for some retailers.
“TV and radio both have a wide reach that can help build brand awareness,” he told Food Dive. “Digital marketing, however, is more budget efficient and provides greater ability to target based on interests and activity.”
Grocery retailers are also finding that advertising on social media is not only cheaper, but could create a more in-your-face form of advertising, which is more likely to bring people into the stores. And considering how many people DVR programs and use the FF button to go past the commercials, it just gives them more incentive to put their advertising dollar somewhere else.