Snacks and Soda Trends on Walmart.com

This is the fifth of our six part series on Walmart’s pivot to digital.

This time, we’ll take a look at how the leading snack and soda brands are winning on Walmart.com.  Earlier, we examined three key facets of Walmart’s digital initiatives and what implications they have for brands, as well as the leaders and trends in consumer electronics and cosmetics brands, and finish the series with a summary of a few best practices brands should use to win on Walmart’s online properties. Also included is a Q/A blog post with Planet Retail RNG senior analyst David Gray and Clavis Insight Chief Marketing Officer Danny Silverman, as they tackle several key questions generated by attendees of our recent special edition webinar, “Winning on Walmart Part 2: Driving Traffic, Sales and Share on Walmart’s Online Properties,” which can be found here.  

Snacks & Sodas:

Over the past several years, Walmart has shifted its focus from a traditional retail outlet with a website, to a digital retail platform with brick-and-mortar stores.  In 2016, to show it meant business, Walmart acquired Jet.com, one of Amazon’s biggest pureplay competitors, while earlier this year it acquired Flipkart, which controls the burgeoning Indian market for eCommerce, and it released its brand new website. Clearly this new focus on the digital will be lasting, especially as its traditional retail arm continues to hemorrhage money.  Although its physical stores struggle to turn a profit, Walmart has found that its traditional retail background has given it a major advantage over Amazon. It’s repurposing its brick-and-mortar network to serve as distribution hubs and innovating last mile delivery. Likewise, Walmart’s background in traditional retail has given it experience, consumer confidence, a good relationship with many brands across many categories (as we touched on in part 4 of this series), and, another leg up on its pureplay competitors.  

One such category is snacks and sodas. Although snack foods and beverages were the first food items to be widely purchased online, Walmart obviously has a long lineage of selling the leading brands,  and today the retail giant holds a significant share of online snacks and sodas sales. With Walmart.com establishing itself as an eCommerce powerhouse, brands must learn to win in this new and unique environment. Here’s how the leading brands are leveraging fundamental metrics like Search, Ratings/Reviews, and Availability to win on Walmart.com right now.  

Search:

Despite both being more known for their cereal brands, Kellogg’s and General Mills are the top two performers on the ‘snacks’ category, outperforming traditional snack powerhouses like Frito Lay. As a result, the results page contains more crackers and fruit-based snacks and fewer potato chips.

This is somewhat surprising, and speaks to both Kellogg’s and General Mills staying ahead of consumer trends and planning for future changes in the market.  Five years ago, Frito-Lay probably didn’t consider Kellogg’s to be a direct competitor, but as consumer habits shifted, Kellogg’s and General Mills identified an opportunity to fill a growing demand for healthier snack foods, and targeted online shoppers who were searching for ‘snacks’ on Walmart.com (despite the fact that many ‘snack foods’ like crackers, fruit snacks, cookies, etc. aren’t much healthier than chips).  

More importantly, these companies saw Walmart.com as a potential space for growth that hadn’t yet been cornered by the chips companies.  Most importantly, though, is that both Kellogg’s and General Mills have built a winning search strategy by utilizing two fundamental methods.  First of all both companies’ brands feature clear and informative titles which target keywords. For instance, nearly every title includes the brand name, the word ‘snack,’ and one or two description words like ‘cookies’ or ‘crackers.’  Such short, direct, and keyword-driven titles are especially important with the new Walmart.com’s minimalist PDP’s. Secondly, both General Mills and Kellogg’s have a deep bench of product lines. Not only do they control an assortment of listings, both companies control an assortment of major snack brands, from Nature Valley and NutriGrain, to Gardetto’s and Keebler.  

Soda on the other hand is still controlled by the traditional powerhouses - Coca-Cola and Pepsico both control 30% of first-page results, and Walmart’s discount house brand, Great Value, a close third (a clear representation of Walmart’s ingrained advantage in this category).  However, like in snacks, emerging brands may find success by targeting a growing demand for ‘healthy sodas.’  Sparkling Ice Naturally Flavored water currently holds the top spot on the first page of results for ‘soda,’ and other brands like Izze and Zevia are growing in popularity and climbing up the search rankings.

Ratings & Reviews:

Ratings and reviews are crucial for several reasons. Although they affect search performance, they have a much larger impact on conversion.  And secondly, shoppers are far more likely to trust a product review than the brand’s description of the product, so shopper-generated content is critical to creating the perfect page.  In other words, high review counts and ratings drive search performance and conversion.

Like makeup & cosmetics, leading brands in snacks & sodas are all highly established legacy brands - this means that reviews are all very uniform, and uniformly high - the three leading snacks brands, for instance, all enjoy an average rating of 4.7 stars.  Once again, with the high average and not a lot to separate these brands, total number of reviews becomes the key metric which drives conversion.

Availability:

This category, with its legacy brands, consumer confidence, and resulting high ratings, also highlight the importance of product availability. Stock levels are a ‘sleeper’ fundamental metric - brands overlook stock levels at their own peril - but availability becomes even more crucial in categories like this, when very little separates the category leaders in the other metrics. For example, both Coke and Pepsi are neck and neck in search performance, but Coke’s average rating is much lower than Pepsi’s (4.3 to 4.7). However, Coke’s low-stock rate hovers at around 7%, while Pepsi’s is almost twice that, at 13%.  This allows Coke to maintain the long-standing deadlock between these two major soda brands.

No longer emerging, Walmart.com is the most important and competitive battlefield in eCommerce right now.  To win on the digital shelf brands must learn to win on Walmart - and snacks and sodas, like groceries as a whole - is one space on the digital shelf that’s unique from other pureplay retailers because of Walmart’s brick-and-mortar background.  Nonetheless, brands can still win here (as always) with a game plan that’s strong in the fundamentals. This category might be dominated by the powerhouses, but those powerhouses are excelling in the important metrics like search, ratings and reviews, and stock.  

To go more in depth on how to succeed in this new environment, give part 1 and part 2 of our Winning on Walmart webinars a listen here, download our latest whitepaper Driving eCommerce Sales on Walmart’s Online Properties, and check out the other blog posts in this series here.

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