LAURA KIM

KIWI GROCERY: MARKETING REPORT

2.0 Situation Analysis

Kiwi Grocery is a start-up company in a relatively new market segment of grocery e-commerce. Established competitors such as UberEats and Instacart currently lead and exist in this segment at large. What differentiates Kiwi is their competitive pricing structure due to withstanding wholesale partnerships, allowing them to cut costs of middlemen grocer premiums. Kiwi does have a somewhat more limited product offering compared to some of their competitors as they enter the market. Their main point of concern is a low market penetration and brand awareness.

3.0 Primary Research

We conducted surveys for a 20 person sample group. Respondents were all over the age of 18 and primarily living in Alberta, Canada. To determine their attitudes toward online grocery shopping, we asked them a series of questions regarding their existing brand awareness and precursor knowledge of Kiwi Grocery, if any at all. The results are detailed in the report and appendix, but overall, we found that our majority Millennial sample group were very comfortable with the idea of buying groceries online and were already aware of Kiwi’s major competitors as options for them to employ. They are buying groceries often and in many cases on a weekly basis. Millennials are ordering online via an app, but none of our respondents had heard of or used Kiwi Grocery delivery services previously. Additionally, respondents were asked about their willingness to interact with brands on social media. Most of them have already adapted to the presence of brands, primarily using Facebook or Instagram to shop and find new products.

4.0 Vision/Mission

Kiwi’s vision is to create convenience while cutting costs, but never corners. Everyone grocery shops but not everyone does it with ease. In hopes of increasing their share in metro Calgary’s market and expand nationally across Canada, Kiwi sets out on a mission to amplify their exposure and brand awareness to a larger customer base, ultimately increasing their sales and revenue. They intend to do so by leveraging fun and engaging social media content advertised on platforms. TikTok is especially an area of interest where they do not currently have a presence but would like to explore the opportunities there in order to build a loyal audience across many different geographic locations.

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TARGET AUDIENCE

The selected target audience for Kiwi Grocery is young families, particularly parents between the ages of 30-40 categorized in the late millennial bracket. This particular demographic is best suited for Kiwi due to the lifestyle preferences, grocery habits, and attitudes that closely align to their business model and service they provide. Millennials are an attractive demographic for the grocery sector as there is an increasing demand to move more transactions online for convenience and time efficiency especially as many of them start having families. More than any other age demographic, 25% of millennials already do “most” or “all” of their grocery shopping online, (Piacenza, 2021). There are many opportunities for growth in this relatively new sector especially as Kiwi Grocery aims to fill the gaps in the market with facets of their service that better align with what customers want when it comes to online grocery shopping and delivery.

According to a recent study surveying 2,000 millennials about their food spending and grocery shopping habits, convenience is what 55% of millennial shoppers want most in a future grocery shopping experience. They also found that millennial households spend $874 on average each month on food, with $615 (70%) of that budget on groceries. The group that spends the most on groceries being married millennials with children (Wiley, 2020). On average this generation visits a grocery store three times a week - married Millennials with children making the most weekly store visits. Since this particular group frequents stores and spends the most money, the report suggests that food retailers have the opportunity to target this segment to increase engagement and help make more sales, (2020). Grocery delivery is a great option for this demographic especially since a majority of Millennials are not willing to travel more than 20 minutes to their primary grocery store. As this group tends to have higher levels of discretionary income, they are able to cover delivery or service fees that may come with online grocery delivery as the value proposition of convenience is justified in exchange for premium pricing.

Kiwi Grocery offers a competitive pricing structure with their service as one of their main differentiators from other delivery services such as Instacart, Walmart and Uber in that they do free same day delivery with no hidden service fees all while grocery item prices remain the same as in store prices or even lower. In addition to the population that already use online grocery services, a recent study found that free shipping would entice over 55% of respondents to purchase their groceries through e-commerce channels in Canada, (Bedford, 2020). Subsequently, younger Canadians were found to have higher expectations for grocery delivery times in comparison to older generations. About 68% of the younger generation stated that they expected to receive their online grocery order within 24 hours, as opposed to the 35% of boomers who shared this attitude, (Chevalier, 2021). Guaranteed fresh fruit as well as one day delivery were the main factors of persuasion, perfectly aligning with Kiwi’s delivery service model.

Moreover, it is not just urban millennials who seek these services. Millennials who live in rural and suburban communities are going online for groceries more than the average consumer as 21 percent said they do a majority of their grocery shopping online - more than doubling the amount of rural and suburban millennials' grocery habits pre-pandemic at 11%, (Piacenza, 2021). This is ideal for Kiwi as they currently operate in more rural and suburban areas of Alberta, expanding to more urban areas down the line as the company continues to grow and expand.