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Walmart Paves The Way For Grocers With Higher Paid-Search Spending

AdGooroo data shows that the top 10 paid search spenders on the keyword group have dramatically increased their investment over the last 12 months compared to the same period ending in May 2016.

In addition to its recent acquisitions of e-commerce platforms Jet.com and Bonobos, Walmart is already fighting back against Amazon’s burgeoning challenge in brick-and-mortar grocery space, as the Bentonville retail giant led all paid search advertisers in spending over the past year, a study by marketing platform AdGooroo found.

Walmart’s search spending jumped by more than 1,500 percent from 51,000 to an estimated $858,000 on “on 124 non-branded grocery store and grocery delivery” keywords in Google search from June 2016 through May 2017, AdGooroo said. Among the terms covered in AdGooroo’s analysis were  “grocery store,” “groceries delivery,” “grocery delivery service,” ‘online grocery shopping” and “supermarket.”

The retailer’s moves seemed to coincide with other efforts to support its position as the nation’s largest grocer. In addition to its purchase of Jet.com, Walmart has struck delivery partnerships with Uber and Lyft. It’s also expanded its curbside grocery pickup service as many other retailers have, such as Target.

The sudden and significant rise in Walmart’s search spending could also be a sign of Jet.com’s influence on the retailer, which Walmart acquired in September last year, spent an additional $82,000 on the keyword group during the period, up from just $3,000 in the 12 months preceding June 2016.

Aldi Follows Walmart

Right behind Walmart in AdGooroo’s paid-search rankings among grocers was Aldi, with $441,000 spent on the keyword group.

As the German supermarket chain expands its U.S. stores from 1,600 to 2,500 by 2022, its paid-search expenditures were up from $40,000 over the 12-month period.

Interestingly, Aldi averaged just $9,000 per month in spend on the keyword group from June 2016 through February 2017. Like Walmart, the chain’s spending surge appeared to be in concert with its other strategic moves, particularly when it comes to ensuring a stronger online presence in preparation for U.S. expansion roadmap.

In general, grocery brands’ invigorated SEO shift mirrors wider market moves designed to capitalize on the importance of social media channels like Snapchat and mobile micro-moments consumers turn to when it comes to making shopping decisions.

Where’s Amazon In All This?

Overall, AdGooroo found that Walmart captured a 19.1 percent share of total clicks on the 124 non-branded grocery keywords over the 12-month period, followed by Aldi (11.6 percent click share), Kroger (7.6 percent click share), Safeway (6.7 percent click share) and Fry’s (4.2 percent click share).

“Although the same top five retailers for ad spend also ranked in the top five for click share, Kroger and Safeway swapped places, showing that Kroger had a more efficient campaign than Safeway, since it spent less and received a larger share of clicks on the non-branded grocery keywords,” AdGooroo’s report said.

As for where Amazon was in all this paid-search activity, Amazon ranked 9th in AdGooroo’s ad spend survey on the non-branded grocery keyword group with $134,000 in spending from June 2016 through May 2017. Amazon also came in 9th in terms of clicks with a 2.8 percent click share.

Its acquisition target, Whole Foods, which has struggled technologically for a while, ranked 18th in ad spend with $51,000 spent on the keyword group over the last year. That represented a decrease for Whole Foods from the $57,000 the company spent on the same keywords from June 2015-May 2016 — and dismal 19th in clicks with a 1.2 percent click share.

In a separate study of retail sales growth by the National Retail Federation and Kantar Retail, Walmart’s ramped up search focus could have played a role in keeping it in the top spot.

“At 55 years old, Walmart may be the oldest new kid on the block, but it still has the energy and mindset of a startup as it continues to successfully battle the competition,” said Stores Media Editor Susan Reda said. Stores is the official publication of the NRF.

While main tale associated with retail these days seems to be one of retrenchment and struggle, as major brands like Macy’s and JCPenney shutter dozens of outlets, the NRF/Kantar Retail study sought to shine a brighter light on an industry taking steps to address omnichannel demands from consumers.

Retailers will always be measured by sales numbers, and ranking the leaders is important,” Reda said. “But so are the stories behind the numbers — it’s those stories that bring the Top 100 to life. The nation’s largest retailers are posting strong vitals. They’re embracing creative disruption, reinventing physical stores as places for brand experiences and exploring new ways to connect with the consumer.”

Considering that 90 percent of consumer transactions happen in a physical store, and that the majority of that that 90 percent is focused on grocery purchases, the challenge for independent markets and chains will rest on how well they play the SEO game, especially as the rise of voice-activated, Connected Intelligence assistants like Siri and Alexa are poised to have a greater impact on the answers consumers receive to their spoken search queries.

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.