Consumer behaviour is constantly evolving, which means so is the world of commerce media. This can leave some of us unsure how best to invest our precious media budgets.
One key change, borne out of the pandemic, is the growth of the quick-commerce market. But with a return to pre-pandemic shopping habits and tighter budgets, many marketers have been left wondering: how should I invest in this platform, and who should I be investing in?
Whilst the market has seen a period of explosive growth – fuelled largely by the pandemic – it’s important to keep in mind q-commerce is a rapidly changing and relatively infant market, which poses both benefits and challenges.
The positive news is, even in a post-pandemic world, the market has continued to grow year on year, with one in 10 UK households now using q-commerce. Therefore, if you are a brand with a listing, and an increased portion of your sales are coming from these platforms, supporting with media budgets can seem logical.
The urban appeal of q-commerce is even more pronounced, with nearly a quarter of Londoners using these services once a week, in a shift away from the age-old ‘weekly shop’ trend. Herein lies another benefit: the ability to reach new audiences like the urban and affluent shopper. Couple this with the ability to tap into specific shopper missions like the ‘distress’ nappies purchase or the ‘meal for tonight’ occasion, and q-commerce can be an effective platform to acquire new shoppers and drive conversion.
However, there are challenges. Firstly, estimations about the future size of the market have decreased when considering the cost of living crisis and the anticipated shift away from impulsive q-commerce purchases and a return to planned shops. And, even today, q-commerce represents a modest proportion of total UK grocery sales, which means any investment should be well considered and proportional.
However, for the right products, catering to the right missions, q-commerce does have a role to play within your media mix.
So, what are our top five recommendations for media investment in q-commerce platforms?
1. Be strategic about which partners to invest in
In a fragmented market that has seen the consolidation of several players, it’s important to be strategic about which partners you work with. Consider those with a clear affinity to your brand, whose shopper base aligns with your target audience and, ideally, who can report on the performance of your media so you can test and learn.
It’s also important not to spread media budgets too thinly across multiple partners, but instead focus on a select few.
2. Be savvy with campaign planning
The relatively new media estates of q-commerce platforms can pose challenges, and campaign planning is likely to vary in comparison to traditional retailers. To get the most out of these partnerships, consider taking more of a front foot creatively and planning collaboratively. Setting clear expectations from the outset around the level of campaign reporting you will receive will also help you understand performance and ultimately shape better investment decisions.
3. Capitalise on upper funnel opportunities
Q-commerce should be viewed as part of a full-funnel connected commerce campaign. Planning holistically will allow you to better capitalise on the ‘distress’ need states of the q-commerce shopper, directing them to the app to make the purchase.
4. Don’t expect ROI to be good from the outset
It’s important to keep in mind q-commerce investment will need to work very hard to deliver a positive ROI for your brand. However, it can help you achieve a number of other campaign objectives more readily.
While impressions may be more limited compared to other channels, the strong targeting capabilities of q-commerce apps can help you to reach exactly the right target audience.
In addition, the ability to tap into specific ‘missions’, coupled with the demand for immediate delivery, means shoppers may be more willing to try new products, which can prove effective in acquiring new customers. The frictionless experience of on-app ordering and ultra-fast delivery can also provide a positive brand experience for shoppers.
5. Partner with brands to tap into different missions
This is a key opportunity within q-commerce. Take the upcoming Qatar World Cup, for example: with some matches being played in the middle of the day, shoppers might not want to leave their homes to visit the shop. In comes q-commerce, through which brands can partner to provide shoppers an easy and convenient solution to get a selection of their favourite drinks and snacks delivered just in time for kick-off.
It remains to be seen how sustainable the q-commerce operating model is from a profitability perspective. Rider labour and operational costs means high-value orders are needed just to break even. As a result, we expect to see the continued consolidation of ultra-fast q-commerce players.
In addition, a turbulent economic landscape and the cost of living crisis mean there is uncertainty around how much demand will remain for q-commerce services, as people return to traditional weekly shopping lists and priorities shift from convenience to value.
Nonetheless, even considering the worst-case impact of the cost of living crisis, the q-commerce market is expected to grow from today to 2030. Consumer demand for these services is also clear: q-commerce platforms are now partnering with retailers (Deliveroo and Uber Eats have partnered with the likes of Waitrose, Co-op and Asda), and traditional retailers are even investing in their own rapid delivery offerings to compete.
In summary, should q-commerce investment be the right fit for your brand, invest with caution. And although the future of the market is uncertain, be confident there is a great opportunity to test and learn in this fast-evolving and exciting area of retail.
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