Vendor Marketing – Targeted Ads Can Give Grocery Shopping A Big Boost

The global online grocery market size was pegged at USD 285.70 billion in 2021 and is expected to increase at a compounded annual growth rate (CAGR) of 25.3% from 2022 to 2030, according to studies by a US-based market research and consulting company.

The rapidly evolving shopping preferences of consumers during the pandemic and the dynamic advances in the e-commerce space, such as multiple payment options, contactless delivery, etc., are expected to drive growth within this category.Vendors are increasingly looking for ways to expand their e-commerce footprint and make the most of this opportunity. They’re increasingly latching onto the vast potential of retail media for serving up more effective and efficient vendor marketing campaigns to capture the attention of target audiences.This article takes a look at how targeted ads can give a significant boost to vendor marketing in the grocery industry. We start with the basics.

Vendor marketing or digital shelves

Why has Vendor Marketing Become the New Buzzword?

Across the board, vendors are rethinking strategies to enhance and optimise customer experiences. As the lines blur and online and offline shopping converge, the goal is to create a seamless interaction between the retailer and the customer.


Vendor marketing is an industry-specific term for vendor-funded or vendor-sponsored advertising and promotion on a retailer’s website or digital platform. This marketing type helps drive customer engagement, sales, and revenue for vendor products. And tying it all together are targeted retail media ads that will shape the online grocery shopping experience.


Targeted ads are tailored to a particular customer or group based on their interests, demographic and psychographic data points, purchase history, etc. This ensures that consumers are served with the most relevant products or services based on their past behaviour or characteristics.


For instance, if you have been searching for Asian greens, you may see an advertisement for Asian greens or Asian spices at the top of your search and/or the next time you go online.

Below are our top reasons why targeted ads will soon be one of the primary drivers of grocery businesses online, given their industry specificity.

  •  Engage with Customers at the Right Time and Right Place

The online marketing space has undergone plenty of changes in recent years. Mobile usage has increased, and so has the popularity of social media.

Search engines have therefore begun to target these specific user groups using automated solutions to nail down their target demographics. For example, with the grocery segment, which comprises seasonal shopping behaviour, targeted ads facilitate product placement based on customer-profile information, including location, income, purchase patterns, and more.


These targeted ads will be able to deliver the right message at the right time, and this should significantly increase click-through rates and, of course, sales.

  • Local Significance

Customer data enables a better understanding of consumers’ needs, preferences, and behaviour. A significant reason is that grocery customers are increasingly agreeable to interacting with retailers through location-based services, loyalty programs, and smartphone applications. 

Typically, product searches indicate strong purchase intent, and the likelihood of online or offline purchases is high. 

Therefore, understanding the grocery-related searches of local customers enables vendor marketing solutions to place suitable ads in front of local consumers. This facilitates relevant and meaningful shopping experiences considering the industry specificity.

  • Targeted Initiatives and Incentives

Targeted retail ads enable vendors to provide particular incentives such as free shipping, special discounts, and premium services to specific groups of customers at specific locations. 

This supports a positive brand interaction and encourages customers to make purchases by visiting your web page or directing customers to the nearest offline store.

Buyers in the grocery segment often search and compare products. Targeted ads featuring discounts, sales, or even a great review at the right moment in their purchase journey, can give vendors a competitive edge.

  • Opportunities for Personalisation

With targeted ads, you can create unique and personalised customer experiences on retail websites or digital platforms. This will be highly beneficial as customers love it when relevant offers or products appear in front of them. 

For example, during the festival season, you can customise ads for customers based on their purchases and browsing history and offer them gifts, discounts, etc. Coming at a time when customers’ purchase intent is at its peak, this can be a game-changer.

Simply put, by personalising ads to consumers based on their location, interests, purchasing history, and other factors, you can offer them something relevant to their needs.


  • Opportunities for Innovation

The future of grocery e-commerce will be driven by both customer experience and commodities, with customer experiences as the significant factor. 

Retail media solutions leverage personalisation, optimisation, and machine learning to serve up relevant ads that help build loyalty and engagement in the highly competitive grocery business.

For example, targeted ads that enable customers to learn about food and health or cuisines will be a massive plus over those who just focus on the commodities. 

Targeted retail media can help vendors provide customers with compelling experiences. It does so by leveraging product recommendations, vendor-sponsored health and wellness content, vendor-funded loyalty programs, coupons, or discounts to drive more sales.

  • Profitability

Supermarkets that sell groceries online usually find that online selling involves lesser margins owing to the cost of logistics and other issues. 


The most significant benefit of retail media for online grocery stores is that it helps to develop new revenue streams and boost overall profitability.

Also, another distinct industry specificity is that searches in the online grocery space are relatively generic, with no particular focus on brand loyalty. 

Vendor marketing effectively helps showcase the relevant products, having the desired attributes in front of a customer at the right time and price. This meaningful interaction with customers can increase sales and profits.

  • Dynamic Retail Environments

The new entrants in the grocery segment can compete with big corporations on a more level playing field as vendor marketing is cost-effective, and its reach can be tailored to the vendor’s product or service.

On the other hand, big grocery businesses can conveniently leverage their significant resources and adopt an e-commerce approach to trading. In addition, vendor marketing helps them amplify their message and create a more prominent market presence.

Moreover, targeted ads for vendor marketing enable larger businesses to access more customer data, thereby gaining better insights into customer behaviour.


During the pandemic, lockdown restrictions dramatically boosted grocery purchasing habits, and going to statistics; it is set to grow exponentially in the years ahead. 

Retail media is one of the most effective tools that have risen to sudden prominence. It is touted as the future of grocery shopping. 


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