Bridge the gap: Optimizing the impact of advertising in a phygital world

Given that the average American adult spends up to 6.5 hours online daily according to Forbes¹, it’s no surprise that digital experiences significantly shape consumer shopping habits, including how we shop for groceries. In this increasingly digital landscape, food and beverage brands are challenged not only to stand out but also to measure the impact of their ad strategies effectively. The right advertising strategy is important, but the ability to measure its impact is what sets successful brands apart.

According to 2023 research by Incisiv, 69% of all grocery sales were found to be “digitally influenced.” That influence includes product discovery, purchase inspiration, online ordering, wayfinding, digital coupons, and more. Yet, despite the significance of this digital influence, 72% of grocery shoppers surveyed agreed that they still primarily purchase groceries in-store.²

How exactly are grocery brands supposed to account for the gap in the customer journey between digital consideration and in-store purchasing? It’s a blending known as a phygital advertising—a dynamic approach that seamlessly integrates offline and online experiences, bridging the gap between brick-and-mortar stores and digital platforms.

As part of this evolving shopping behavior, Amazon serves as a key touchpoint in grocery shoppers purchase journey. Many consumers use Amazon to discover new products and compare options before heading to the store.

Amazon Ads insights³ reveal:

• 57% of surveyed shoppers check customer reviews.
• 33% view product detail pages.
• 31% check recommended products.
• 22% check the top listed products under discover results.

Back in the habit

The surge in online food shopping during the pandemic has had a lasting impact, but the majority of consumers still prefer to do their grocery shopping in-store.⁴ Grocery shoppers still want to make their own selections of fresh foods—meat, fruit, and vegetables, in particular. The ability to make those decisions in real time allows for shoppers to improvise when an item is out of stock, or to simply try something new.

This pattern of intentionally remaining open to last-minute decisions is an opportunity for brands to connect with grocery shoppers while in-store as well.

Amazon has the power to help brands reach shoppers in-store across Whole Foods Market and Amazon Fresh. With in-store ad solutions including digital signage, experiential events, and in-store displays, brands can help drive consideration as shoppers make their last-minute purchase decisions. Brands that implemented a full-funnel phygital ad strategy at Whole Foods Market and Amazon Fresh saw a +23% increase in sales, year over year, compared to those that didn’t.⁵

Before the cart

Omnichannel shopping has transformed how consumers purchase groceries, blending online discovery with in-store buying decisions. This shift presents a valuable opportunity for brands to engage shoppers across multiple touchpoints, from digital platforms to physical stores.

Furthermore, Incisiv’s research finds that omnichannel shoppers spend 1.5x more on their groceries than those who shop online only or in-store only.⁶ This highlights the opportunity for brands to engage those consumers to help drive increased sales. And video ads have proven to be a helpful way to drive consideration and sales for grocery brands both in-store and online. Specifically, when grocery brands invested in video ads (streaming TV ads, online video ads and Sponsored Brand Video ads) we observed consideration increased by 28x, and sales growth increased by 8%, relative to brands that only used sponsored ads.⁷

“Many consumers are already navigating seamlessly between online and in-store environments to do their grocery shopping. Grocery brands can help guide these shopping journeys with well-placed and well-timed advertisements,” says Nancy Winé, director of U.S. grocery at Amazon Ads.

Trusted partner

Happy Baby Organics, a brand specializing in baby food, worked with Amazon Ads to create a digital campaign to help increase brand awareness, reach new-to-brand customers in-store, and measure performance to help optimize success. Their Amazon Ads campaign helped them reach consumers by employing streaming TV ads, online video ads, and Amazon Demand-side Platform (DSP) display ads.

The results – an 18.6% incremental sales increase, 26% growth in new-to-brand buyers, and an incremental $4.23 return on their ad spend⁸ – demonstrating the power of blending digital advertising with in-store shopping.

“We were able to accomplish our goals of increasing our customer base, sales, and brand awareness through our digital ad strategy with Amazon Ads,” says Kristin Chou, manager, media data, tech & operations, Danone. “The ability to reach consumers at different stages of their grocery shopping journey has been extremely valuable.”

Monitoring effectiveness

Creating a phygital campaign is just the first step for grocery brands looking to connect with omnichannel shoppers. What sets a successful campaign apart is the ability to measure and optimize its performance in real time, and Amazon Ads provides the tools to do just that. With Amazon Marketing Cloud, brands can use custom insights and audiences generated from the tool to optimize campaign tactics, guide marketing execution, and inform business decisions. This holistic view enables brands to track performance across the entire funnel—from awareness to in-store conversions—ensuring that every part of the campaign contributes to measurable results.

Additionally, Omnichannel Metrics allow brands to measure the impact of their ads across platforms, including Amazon and other retail environments. By leveraging these tools, brands can understand how ad campaigns are driving in-store sales and make informed decisions to adjust their strategy on the fly. Whether it’s reallocating budget to high-performing channels or refining ad creatives, the ability to act on these insights allows for continual optimization.

Overall, having access to measurement tools gives brands the agility to adapt quickly. Ensuring campaigns are not only reaching but also resonating with the right shoppers—both on and offline.

Conclusion

With a phygital advertising strategy, brands can help connect with and engage omnichannel shoppers at different stages of their grocery shopping journey, regardless of whether shoppers make that final decision by pulling something off the shelf or hitting confirm order with the touch of a button.

For more tips and solutions for grocery marketing, visit Amazon Ads.