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Atlanta, GA – August 3, 2021 – Cardlytics, Inc. (NASDAQ: CDLX), a digital advertising platform, today announced financial results for the second quarter ended June 30, 2021. Supplemental information is available on the Investor Relations section of the Cardlytics' website at http://ir.cardlytics.com/.

“While we grew Cardlytics platform billings 111% and adjusted contribution 123% year-over-year, we fell below our guidance.  This was driven by us forecasting a faster recovery than was realized due to labor shortage and supply chain challenges in retail, restaurant and travel,” said Lynne Laube, CEO & Co-Founder of Cardlytics. “Our core business remains on a very solid foundation and we continue to make significant progress on all of our strategic initiatives, including the integration of Dosh and Bridg.”

“We believe we will still be dealing with an uneven recovery in Q3 as each industry we operate in is still working through unique macroeconomic challenges,” said Andy Christiansen, CFO of Cardlytics. “We remain very excited about the long-term potential of Cardlytics and continue to make immense progress on our product and technology initiatives.”

Second Quarter 2021 Financial Results

• Revenue was $58.9 million, an increase of 109% year-over-year, compared to $28.2 million in the second quarter of 2020.
• Billings, a non-GAAP metric, was $85.3 million, an increase of 116% year-over-year, compared to $39.5 million in the second quarter of 2020.
• Gross profit was $23.2 million, an increase of 193% year-over-year, compared to $7.9 million in the second quarter of 2020.
• Adjusted contribution, a non-GAAP metric, was $29.6 million, an increase of 139% year-over-year, compared to $12.4 million in the second quarter of 2020.
• Net loss attributable to common stockholders was $(47.3) million, or $(1.43) per diluted share, based on 33.0 million weighted-average common shares outstanding, compared to a net loss attributable to common stockholders of $(19.8) million, or $(0.73) per diluted share, based on 27.1 million weighted-average common shares outstanding in the second quarter of 2020.
• Non-GAAP net loss was $(12.8) million, or $(0.39) per diluted share, based on 33.0 million weighted-average common shares outstanding, compared to a non-GAAP net loss of $(10.2) million, or $(0.38) per diluted share, based on 27.1 million weighted-average common shares outstanding in the second quarter of 2020.
• Adjusted EBITDA, a non-GAAP metric, was a loss of $(5.7) million compared to a loss of $(7.7) million in the second quarter of 2020.

Key Metrics

• Cardlytics MAUs were 167.6 million, an increase of 7%, compared to 157.2 million in the second quarter of 2020.
• Cardlytics ARPU was $0.34, an increase of 89%, compared to $0.18 in the second quarter of 2020.
• Bridg ARR was $12.5 million in the second quarter of 2021.

Definitions of MAUs, ARPU and ARR are included below under the caption “Non-GAAP Measures and Other Performance Metrics.”

Third Quarter 2021 Financial Expectations

Cardlytics anticipates billings, revenue, and adjusted contribution to be in the following ranges (in millions):

 Q3 2021 GuidanceBillings⁽¹⁾ $85.0 - $95.0Revenue $57.0 - $66.0Adjusted contribution⁽²⁾$27.0 - $32.0

• A reconciliation of billings to GAAP revenue on a forward-looking basis is presented below under the heading "Reconciliation of Forecasted GAAP Revenue to Billings."
• A reconciliation of adjusted contribution to GAAP gross profit on a forward-looking basis is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the items excluded from this non-GAAP measure.

Earnings Teleconference Information

Cardlytics will discuss its second quarter 2021 financial results during a teleconference today, August 3, 2021, at 5:00 PM ET / 2:00 PM PT. The conference call can be accessed at (866) 385-4179 (domestic) or (210) 874-7775 (international), conference ID# 3993796. A replay of the conference call will be available through 8:00 PM ET / 5:00 PM PT on August 10, 2021 at (855) 859-2056 (domestic) or (404) 537-3406 (international). The replay passcode is 3993796. The call will also be broadcast simultaneously at http://ir.cardlytics.com/. Following the completion of the call, a recorded replay of the webcast will be available on Cardlytics’ website.

About Cardlytics

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, we have offices in London, New York, San Francisco, Austin and Visakhapatnam. In March 2021, we acquired Dosh, a transaction-based advertising platform, and in May 2021 we acquired Bridg, a customer data platform. Learn more at www.cardlytics.com.

In his latest piece for Forbes.com, Dosh Founder and CEO Ryan Wuerch discusses how COVID-19 has boosted interest in cash back, and the psychology behind it. Click HERE to read the full article.

The Center for Generational Kinetics reveals in this groundbreaking research the robust links between younger generations (Millennials, and Gen Z), cash back incentives, digital marketing strategies, and frictionless transactions that are becoming Trend Drivers.

Download PDF Version

Shopping habits have changed over the last several years in a way that no one could have imagined. As a result, customers are now looking to foster deeper relationships with brands, assuming they can offer convenience and seamless customer experiences. In turn, brands want to find better ways to connect with their audiences and provide superior value. That’s where card-linked marketing comes in. Card-linked marketing uses past purchase data to create targeted, relevant advertising that is presented through the consumer’s mobile and online banking application. It’s become so popular that in a recent survey by the Digital Commerce Alliance, 35% of respondents indicated that their card-linking programs grew by more than 100% in the last 12 months. 

In the past, retailers used to lean heavily on the use of printed coupons to drive short-term sales. Then card-linked marketing emerged. Card-linked offers are rewards that consumers automatically receive just by linking their debit or credit cards to an app, website or loyalty program. This approach offers impressive benefits, including being easy to track, cost-effective and backed by actual purchase data, which makes offers more relevant. Customers are also required to opt-in, so there are fewer privacy concerns. Let’s take a look at what card-linked offers are, how they work and what the benefits are.

What are card-linked offers, and how do they work?

Card-linked offers are digital offers from brands and retailers linked directly to a payment provider like a debit or credit card. Then the offer is redeemed by the consumer when the linked payment card is used at the point of sale.

The process essentially works like this:

Retailers and merchants create an offer like cash back rewards or a statement credit. Then, consumers discover offers on websites and apps that they frequent. From there, the consumer links their debit and credit cards to the website or app to earn card-based rewards. And, when the consumer pays with the linked card, they are immediately rewarded.

Some card-linked marketing channels include bank websites, mobile banking apps, airline emails, and browser apps that display card-linked offers anywhere consumers shop and search online. One example is Shell Fuel Rewards, where customers automatically earn a 5-cents-per-gallon discount on enrollment. Then they can use linked cards at participating dining locations to receive a 10-cents-per-gallon discount for every $50 spent as well as earn a 5-cents-per-gallon discount on every $50 spent through the Fuel Rewards Network online mall.

Advantages of card-linked offer programs

Given its many benefits, card-linked loyalty can be a huge competitive advantage for advertisers/brands. Unlike paper coupons or online promo codes, card-linked offers are frictionless— removing unnecessary steps at the point of sale. Card-linked offers also allow brands to understand consumer behavior better than ever by allowing access to detailed consumer purchase data and analytics. With traditional digital marketing efforts, brands pay for clicks or impressions without being able to track sales or in-store visits. With card-linked offers, advertisers can see the direct impact of their investment because every dollar is directly attributable to a sale. And the best part—these offers are purely paid for based on performance. Merchants and retailers don’t need to pay for the offer until after the qualifying sales occur, which allows for an overall higher return on marketing dollars.

From the consumer’s perspective, card-linked offers are relevant and personalized. They are also easy to redeem because users automatically earn discounts or cash back rewards without digging around for a promo code or coupon. Card-linked offers also use strict privacy protection, which gives users peace of mind. In addition, these offers are most often in the form of cashback rewards which literally puts dollars back in people's wallets. This benefit can be a motivating factor during challenging economic times when consumers tend to become increasingly cost-conscious. Another advantage is that there is something for every consumer. In addition to cash back, merchants can offer deals on a variety of everyday purchases, from travel perks to dining rewards.

Card-linked offers as part of an omnichannel strategy

An omnichannel strategy provides customers with a fully integrated shopping experience that unites user experiences across multiple touchpoints. The goal is to provide a seamless experience where your content and actions transfer from platform to platform. That way, no matter how or where a customer interacts, the shopping experience is the same. That’s why more merchants and retailers are adopting card-linked offers to connect online offers with in-store purchases. In addition, with card-linked loyalty, no transaction can be missed, which increases omnichannel engagement. As a result, card-linked offers are quickly growing in popularity. In fact, they are so popular that The Digital Commerce Alliance survey showed card-linked programs topping the list of the most preferred marketing channels—even surpassing social media for the top spot.

Card-linked offers as cookieless marketing

Another advantage to card-linked offers is that they are a solution for precision targeting that doesn’t rely on third-party cookies. Because of consumers' growing demand for privacy, Safari and Firefox have already disabled third-party cookies. And Google Chrome, which represents close to half of the U.S. browser market share, will stop using them by the end of 2024. Given that Epsilon research estimates that about 80% of advertisers depend on third-party cookies, it’s time to find a new way to reach customers and prospects online. By leaning into first-party data, you can minimize the impact of a world without third-party cookies. Card-linked marketing uses actual transactional data and purchase history, which is more accurate than cookie-based measurement. In addition, consumers have much greater privacy on their devices without third-party cookies.

Using card-linked offers to power loyalty programs

Retaining existing customers while attracting new ones is becoming increasingly difficult. Fortunately, card-linked offers provide many advantages for retailers and merchants. For one thing, customers don’t need a separate loyalty card. Instead, they are identified by their card transaction, which also saves on the cost of loyalty card production and replacement. Card-linked offers are also incredibly flexible. Rewards can be automatically applied to the customer’s card, with the total value of their loyalty tracked over time. And they’re versatile enough to be used as part of any industry’s loyalty program. That’s because the process results in a frictionless customer experience while giving merchants granular insight into transactional data and shopping behaviors. With this understanding of the customer, it’s possible to enable highly targeted and personalized communications. As a result, brands have an opportunity to create even stronger loyalty and engagement in the future.

How to measure success with card-linked offers

Detailed reporting makes it very easy to measure the success of card-linked offers. For example, card-linked offers are proven to increase the number of transactions. According to the 2018 Cardlinx survey, 62% of brands that use card-linked offers saw transaction volume more than double over the past year. And with card-linked offers, merchants can track customer behavior easily by seeing the average order size, as well as the number and frequency of purchases.

Some other valuable success metrics include:

• Number of net new customers: a measure of how many new customers are acquired compared to old customers who leave
• Number of repeat customers: number of customers who have made more than one purchase
• Repeat purchase rate: the ratio of customers who made more than one purchase over a set period compared to the overall customer base
• Average spend per customer: total transaction amount from non-subscription payments divided by the number of customers Engagement rate: how much your audience is actively engaged with content

This knowledge allows brands to incentivize customers to make repeat purchases and reward their best customers for their loyalty.

Cardlytics for card-linked marketing

https://youtu.be/Z0UNr2xhQfU

Cardlytics is not only a leading advertising and technology company, but we are also the pioneer in card-linked marketing. Through our partnerships with financial institutions like Wells Fargo, Bank of America, and PNC Bank, We see 1 in 2 purchases in the U.S., allowing us a complete view of consumer spending. This Purchase Intelligence™ is the foundation of how we target and measure all our campaigns. Our technology provides valuable insight into consumer purchase behavior for approximately 70% of U.S. households across all stores and categories. Our advertising platform helps you reach real customers at the right time when they are thinking about how and where to spend their money. With targeting based on past purchase history, ads on our platform provide real value to customers and act as the critical tipping point for a purchase.

Over the last several years, card-linking has transformed from an emerging technology showing record growth to an efficient tool that brands regularly rely on. And the proof is in the numbers. Card-linking has become a significant revenue stream for merchants worldwide. In fact, 65% of those surveyed as part of the Digital Commerce Annual Industry study reported sales of more than $1 billion attributable to card-linked offers.

Card-linked marketing will only continue to gain popularity as an independent marketing channel. That’s because, with minimal effort, brands can integrate rewards across customer touchpoints to drive sales. And as an added benefit, these offers allow advertisers to gather broad transactional data to learn about customer purchasing behavior, which they can use to create more effective marketing strategies. That means card-linked offers will help advertisers create personalized promotions that continue to draw consumers into stores and keep them coming back for more.

This article originally appeared on Adweek on April 16th, 2020.‍

Retailers Should Rethink Customer Segmentation to Be More Relevant

Covid-19 calls for a change of strategies

By Ryan Wuerch

The retail landscape has changed enormously in the last few weeks because of the coronavirus. More than anything, online shopping is becoming more important to consumers because people need to stay home for their health.

With critical concerns around public well-being, retailers have had to adopt new measures. For example, Whole Foods and Walmart are scaling back on store hours so employees have more time to clean shelves and sanitarily restock them while protecting the health of everyone who works at and visits an outlet, or gets orders delivered.

As brands quickly reshape aspects of their business, digital advertising shouldn’t be allowed to fall by the wayside. Reports forecast more traditional digital spend taking a predictable tumble, and it is true that campaigns designed for another set of circumstances should pause. But this isn’t the time to stop all digital advertising; rather, marketers need to be smarter about their approach to spending.

Last year’s strategies no longer apply

If you are in retail, your team has spent thousands of hours perfecting a 21st-century advertising playbook. You know the profile of your target customers—their likes and dislikes, their spending habits, what brands they shop for, what stores they visit. You’ve AB-tested, and if your data game is next-level good, you know what ad copy works best for “hockey moms in Minneapolis who buy high heels” or if messaging produces sales for “white-collar men in New York who purchase sports and concert tickets.” But this decade is off to an unforeseen start.

Unusual times bring their own set of audience segments, and how retailers spend their ad dollars should reflect such changes.

While data-powered targeting is smart during normal periods, you need to put that playbook on the shelf for the time being. A global pandemic and an impending recession are bringing about a massive shift to retail. Even relatively tenured marketing pros weren’t in the thick of the workforce during the recession of 2008 or after 9/11. So, it’s time to brush up on lessons learned from past tough times and understand that your consumers are spending and saving in completely different ways than they were just a few weeks ago. Right now, cash is crucial to consumers’ mindset.

New, useful segmentation

Unusual times bring their own set of audience segments, and how retailers spend their ad dollars should reflect such changes.

With the exception of ultra luxury retailers targeting high net worth individuals, marketers now likely have customers who are concerned about their checking accounts and will only be shopping for the best deals for essential items like groceries, household items, clothing basics and the unexpected item flying off the shelves, toilet paper. In 2020, that group of consumers is an audience segment.

Young adults in metropolitan areas who keep their salaried jobs will continue to spend as they have recently, although citywide self-distancing rules and the lingering concern of corporate reductions in force will limit their shopping to online much more than usual. That’s another audience segment for the COVID-19 period. Consumers of means can still treat themselves to larger-ticket purchases like automobiles or high-end wines and chocolates. And that audience is a segment.

All told, personalizing messaging about who your current consumers are and what they actually need is of incredible value right now.

Hyper-relevancy over hyper-targeting

Indeed, the old rulebook relied on hyper-targeted marketing and a relatively free-spending consumer base, and the new rulebook is increasingly about thoughtful, relevant branding toward a broader set of households with fewer expendable dollars. Until recently, personalized ads worked on digital platforms. But this change in consumer spending behavior presents a new reality: Your old customer profile means nothing, but their situation now means everything.

Brands cannot be tone-deaf with their marketing now or in the coming months. To the credit of the retail community, many of its members are doing it right. Macy’s, Amazon and Bed Bath & Beyond are keeping customers informed about what their brands are doing to help ensure stores and products are properly sanitized for these times. They are putting the health of customers and employees first, clearly reading a room that is full of concerned folks.

Meeting consumers where they are

Meet consumers where they are at in this moment. Deliver value in how you reach them, present them with offers (discounts, free delivery, cash back, rewards) and consider their evolving spending decisions.

Consumers are worried about personal economics and having basic supplies at home to get through their day-to-day. As a superb example of a brand stepping up to this reality, Moe’s Southwest Grill offered taco kits that feed four to six people while offering a fun cooking activity. Families and friends can share a meal while a brand forms a deep connection with customers during tough times. Retailers can learn from this example by offering household kits that help consumers alleviate everyday concerns with a single click at a discount price.

In sum, we currently live in different times than before, so retailers should rethink how they segment advertising spend and address customers’ needs in relevant ways. It’s an era where great retail marketers will step up, not step back.

The pandemic forced brands to innovate at lightning speed. Consumer trends expected to manifest in years, were compressed into months or even weeks, as shoppers dramatically shifted preference to convenience and online options. Everything from grocery shopping to fitness to entertainment moved online and disruptive direct-to-consumer (DTC) brands reaped the rewards. The big question is, "How did that affect customer loyalty?"

As the country gears up for its grand re-opening, we’re seeing a sizeable, and we believe permanent, change in how people shop.

Consumers are taking their money elsewhere.

The pandemic dramatically affected businesses of all types, but its impact felt very different depending on the business model. Cardlytics’ data shows, before lockdowns began in 2020, 8% of consumer spend could be attributed to DTC brands. That share has jumped to 14% from March 2020 to March 2021.  

Rural shoppers are spending as much as their urban counterparts.

Consider this: spend on DTC brands in rural areas now matches the spend patterns of our urban centers pre-COVID.

The rural in-store shopping experience isn’t known to be rich with options. The added layer of lockdowns during the pandemic further limited entry to traditional brick and mortar retailers and gave rise to DTC brands in rural areas. While the option to buy online isn’t necessarily new, the habits of these shoppers have changed far more rapidly than expected.

There is an urgent call to action for both traditional business as well as DTC. For the traditional business, hoping things revert to “normal” is no longer a viable strategy.

The Bottom Line:

Meet the customer’s needs on their terms, it’s more important than ever. Keep an eye out for changes in purchase behavior and consider the following questions:

• Are the number of retailers in a given category that have a share of the wallet increasing or decreasing?
• How are baskets changing value, frequency, timing of purchase, and channel of purchase, especially online vs. in-store?
• What are the changes in the channels of influence when looking at incremental return channel by channel?

Remember to:

• Re-assess customer loyalty and look at share of wallet for the category rather than simply frequency or amount of spend with their store alone.
• Focus on retention. Considering all the new customer growth, DTC brands must know if they’ve kept pace with competitor growth rather than benchmarking against their own revenue.
• Understand the point of true loyalty. A customer with only one purchase is more likely to be a trialist at risk of churn.

Thanks to the pandemic-led focus on health, safety and social distancing it was easy to bring customers in, but it’s vital that they don’t fall off and revert to old spending habits.

Peter Chan joined Cardlytics this month from Amazon where he served as the Director of Product Management and Engineering for its advertising services group. I sat down with our newest ‘Cardlytian’ to learn more about why he chose Cardlytics, privacy protection and tech innovation, and what’s on his summer reading list.

Welcome to Cardlytics! We’re glad to have you on board. Can you tell us what brought you here?

I was drawn to Cardlytics for several reasons, including its customer focus and opportunity to innovate with data, leadership and growth. First of all, as a consumer, I love how Cardlytics helps me discover brands and products and earn cash rewards at the same time. I don't like carrying cash or coupons, so I like how the Cardlytics platform makes shopping and saving money easy and seamless.

Second, Cardlytics has a massive trove of rich consumer data but utilizes it behind the firewalls of the highly regulated bank channels. With so many choices out there, as a consumer, I welcome tools that give me relevant recommendations and help me focus on products that truly matter to me.

Third, I was impressed by the leadership team's long-term vision and laser-sharp focus on serving its customers. Everyone I met during my interview process talked about the company's mission and values in their own personal voice. As they shared their perspectives with me, I sensed a deep sense of belief, energy and excitement, and importantly, alignment.

Finally, I am excited to be joining Cardlytics for its next phase of massive growth—growth at the team level, with products and services, customers and the business. With a strong foundation plus the acquisitions of Dosh and Bridg, I look forward to Cardlytics bringing more innovations and scaled solutions to consumers.

How has your previous experience prepared you for this role?

While every role is different and things change very fast, I feel truly fortunate that every job I’ve had has prepared me for this role in some way. I have worked for both large companies and startups across different industries. I’ve also worked to integrate companies where sometimes we were doing the acquiring and other times we had been acquired.

All of these past experiences were a little different and had their own unique aspects, but the one thing they all had in common is that they all focused on serving their customers with product and tech innovations.

How do you feel our recent acquisitions will help evolve the Cardlytics platform?

There are endless possibilities for Dosh and Bridg to help evolve the Cardlytics platform. I believe the key platform evolution themes will be around depth, reach and scale. Both Bridg and Dosh will add more depth to our already rich consumer data. They will also allow us to reach more consumers globally through different touchpoints, offering the opportunity for innovation in reimagining the shopping experience. Our platform will need to evolve to serve more customers, so from a technology perspective, scaling the platform globally is top of mind.

User privacy has been a central part of Cardlytics' DNA. With rising concerns over consumer data and privacy, what are some strategies you've used or seen to best protect user privacy while still providing a best-in-class product experience?

The respect for user privacy is pervasive throughout the company. Cardlytians protect user data as if it is our own. I strongly believe that having a privacy-first mindset is crucial. It’s how the company has earned the trust of the top banks and their consumers for the last 12 years. I want to make sure we continue to work hard to keep that trust. From a technology standpoint, this means we leverage the latest and greatest security software and mechanisms such as encryption, one-way hashing and secure storage to keep user data safe.

In your opinion, what have been some of your favorite tech innovations in recent years and how do you see Cardlytics benefitting from these new trends?

I am excited about blockchain. There are endless possibilities to reimagine the financial world as we know it using blockchain technologies. Cryptocurrency is just one of them. In the more decentralized financial world powered by blockchain, Cardlytics can look forward to helping build upon this new world as innovation partners with our financial institutions.

What are you currently reading? Any favorite books you'd like to recommend?

I am currently reading Working Backwards: Insights, Stories, and Secrets from Inside Amazon. Having worked at Amazon most recently, I was truly impressed by how the team obsesses over serving customers every day. It's a huge part of their DNA; and if you want to learn about mental models and strategies that Amazonians use to focus on customers, I recommend reading this book.

It sounds like you’re going to be very busy! Hopefully you will take some time to relax. Do you have any fun summer plans?

Hopefully with much of the world coming out of the pandemic, I am looking forward to spending time with friends and family outdoors. I love to travel and have been making international trips for the past few summers with my family. I hope we can do that again soon. My favorite place to visit is Japan. I feel like I can never get tired of their food, fun things to do and unique cultural experiences.

We are thrilled to have Peter on board as we continue to evolve our ad platform to empower marketers and enhance the bank customer experience.

Grocery shopping moves from the shop floor to the sofa

2020 was the year of the grocery delivery. From getting a hallowed prime time slot during lockdown to supporting local farms and producers through veg boxes, grocery deliveries are playing an increasingly important role in how we shop for food.

The move to food delivery is here to stay

It seems as if it was only a matter of time before the world of instant (or almost instant) gratification at our fingertips made inroads into the grocery sector. And thanks to the pandemic, it certainly has.

Whether it be via meal kits, fruit and vegetable boxes or takeaways, we have been consuming more food through delivery services than ever before. According to Cardlytics’ data, at the height of lockdown one in April 2020, spend on meal kits and grocery boxes soared 114% as people stayed indoors, while takeaway spend increased by 39%. But this wasn’t a one-off, it’s a trend we saw way before the pandemic. For the last few years delivery services have consistently outperformed the dining sector year with spend up 19% in 2018.

Beyond the boom in demand, coronavirus has also elevated customers’ expectations of delivery. The pressure for fast and free delivery has only accelerated, with previously satisfactory same-day, or even hour-long delivery slots making way for promises of fresh groceries in just 15 minutes from new app-based grocery brands.

This week in the UK, Asda launched a One Hour Express Delivery option for customers, while expanding its partnership with Uber Eats to serve more stores nationwide. This is the latest move in an industry-wide shift towards faster grocery deliveries. In the last few months alone, Waitrose quit their own rapid service to focus solely on their new partnership with Deliveroo. Rapid grocer Fancy revealed its own UK expansion plan after being acquired by US rapid grocery delivery service Gopuff, while market leader Just Eat has indicated an intention to move into grocery delivery in the UK, following its launch of a grocery service in Germany last week.

The platform market for grocery delivery services is booming – from the household names to new brands like Getir, Weezy and Beelivery, who are hoping to change the face of grocery shopping once and for all. Claims of fresh produce, fast and a more ‘environmentally’ friendly shopping model is tempting consumers to take note.

What’s clear is that businesses are listening to the needs of their customers who want fast, hassle-free services that come at a decent price and with minimal human contact.

Grocery brands looking to cash in on this new trend should take pause

The rise of the 24 hour fast and free grocery delivery is perpetuating the trend for lower-value, more frequent, smaller basket shops, rather than fostering greater spend, bigger baskets or more customer loyalty which grocers ultimately yearn for. And, with so many new players on the grocery delivery scene discounting is deep and rife, which makes it a competitive market to play in.

It’s clear that grocery is in the middle of a delivery services revolution, but making food arrive at our doors faster is not the only way to entice new customers in the battleground of grocery delivery.

Marketers need to double down on creating lasting loyalty amongst customers who put the most in their trolleys, most frequently, rather than those who jump from delivery service to delivery service shopping around for a cheaper deal. In the long term, the former will add far more value to a brand.

Finding new ways to offer customers value, without creating a hard-to-break cycle of discounting is key. Delivering potential and existing customers tailored rewards for delivery services on the grocery brands they use most frequently is part of the answer.

2020 was the year of the grocery delivery. From getting a hallowed prime time slot during lockdown to supporting local farms and producers through veg boxes, grocery deliveries are playing an increasingly important role in how we shop for food.

The move to food delivery is here to stay

It seems as if it was only a matter of time before the world of instant (or almost instant) gratification at our fingertips made inroads into the grocery sector. And thanks to the pandemic, it certainly has.

Whether it be via meal kits, fruit and vegetable boxes or takeaways, we have been consuming more food through delivery services than ever before. According to Cardlytics’ data, at the height of lockdown one in April 2020, spend on meal kits and grocery boxes soared 114% as people stayed indoors, while takeaway spend increased by 39%. But this wasn’t a one-off, it’s a trend we saw way before the pandemic. For the last few years delivery services have consistently outperformed the dining sector year with spend up 19% in 2018.

Beyond the boom in demand, coronavirus has also elevated customers’ expectations of delivery. The pressure for fast and free delivery has only accelerated, with previously satisfactory same-day, or even hour-long delivery slots making way for promises of fresh groceries in just 15 minutes from new app-based grocery brands.

In the last month alone, Waitrose has quit their own rapid service to focus solely on their new partnership with Deliveroo. Rapid grocer Fancy revealed its own UK expansion plan after being acquired by US rapid grocery delivery service Gopuff, while market leader Just Eat has indicated an intention to move into grocery delivery in the UK, following its launch of a grocery service in Germany last week.

The platform market for grocery delivery services is booming – from the household names to new brands like Getir, Weezy and Beelivery, who are hoping to change the face of grocery shopping once and for all. Claims of fresh produce, fast and a more ‘environmentally’ friendly shopping model is tempting consumers to take note.

What’s clear is that businesses are listening to the needs of their customers who want fast, hassle-free services that come at a decent price and with minimal human contact.

Grocery brands looking to cash in on this new trend should take pause

The rise of the 24 hour fast and free grocery delivery is perpetuating the trend for lower-value, more frequent, smaller basket shops, rather than fostering greater spend, bigger baskets or more customer loyalty which grocers ultimately yearn for. And, with so many new players on the grocery delivery scene discounting is deep and rife, which makes it a competitive market to play in.

It’s clear that grocery is in the middle of a delivery services revolution, but making food arrive at our doors faster is not the only way to entice new customers in the battleground of grocery delivery.

Marketers need to double down on creating lasting loyalty amongst customers who put the most in their trolleys, most frequently, rather than those who jump from delivery service to delivery service shopping around for a cheaper deal. In the long term, the former will add far more value to a brand.

Finding new ways to offer customers value, without creating a hard-to-break cycle of discounting is key. Delivering potential and existing customers tailored rewards for delivery services on the grocery brands they use most frequently is part of the answer.