The Ultimate Guide to Contextual Commerce
What is Contextual Commerce?
Contextual commerce is where highly-relevant content and commerce-enablement converge. Adding shoppable touchpoints to relevant content allows your brand to engage with potential customers before they get to your site or the retailer’s. The relevant content assures that shoppers are in the right mindset to consider your products, making them more likely to engage with the touchpoints.
At Chicory, we’ve always believed that commerce-enablement, or shoppability, is not a one-size-fits-all solution. While commerce-enablement is often thought of as add-to-cart style actions, there are several other ways to engage a consumer along their purchase path. And the context of those actions matters when it comes to influencing purchasing decisions.
Why Contextual Commerce?
Contextual commerce has gone from a nice-to-have to a necessity for brands as they build their go-to-market plans. Changes in both consumer behavior and data-privacy laws have created a need for another way to reach high-intent shoppers. With retail ecommerce sales projected to reach $5.4 billion this year, how can CPG brands strategically respond to the shifting digital landscape?
CPG brands need to understand how contextual advertising can complement their existing programmatic efforts. As data privacy laws tighten and retail media networks build walled gardens around valuable purchase data, CPG brands must find ways to target their core shoppers without relying on behavioral data. When considered in tandem with the growth in digital planning and shopping behaviors, a solution becomes clear.
Contextual commerce offers a robust solution to these challenges as it leverages highly relevant online environments that have seen exponential growth year over year. The amount of regular online grocery shoppers is up nearly 35% over a two-year period. 83% use digital recipes to prepare grocery shopping and 57% build their list from digital recipes weekly or more often.
By positioning commerce-enabled media within the right context, i.e. during the decision-making moment, brands can create a seamless path to purchase. Pairing contextual with other marketing strategies not only encourages smarter digital commerce enablement for consumers but is also a more progressive option for strategic media planners and allows for more significant reach.
Why Recipes are the Ideal Context for CPG Brands
CPG marketers need to understand the contexts that hold weight in inspiring food purchases. Cooking videos, influencer sites, Pinterest boards — all of which ultimately track back to one thing: recipes. Recipes are the ultimate context for CPG brands to advertise on, as this is where shoppers are both highly engaged and are demonstrating clear purchase intent. Not only that, but recipes are the number one driver of new product trial.
Used by 9 out of 10 consumers, digital recipes offer the perfect context to drive online grocery purchase decisions outside of the retail environment. Consumers use recipes to meal plan, build shopping lists, discover new products and more. Brands that advertise within digital recipes, therefore, reach high-intent, head-of-household shoppers planning their weekly grocery trips. Brands can take these contextual media solutions a step further by enabling shoppability, turning a shopper’s ‘aha’ moment into a brand's add-to-cart opportunity.
By using contextually relevant advertising that is commerce-enabled, brands can reach the consumer where they’re making shopping decisions pre-retailer and offer something helpful during their path to purchase.
The Benefits of Contextual Commerce for CPG Brands?
Context Matters
To gain new customers today, it’s paramount that brands consider the context in which consumers shop. As the name indicates, contextual commerce allows commerce to happen in the most contextual space for that vertical. When buying clothing, consumers will consider multiple factors that make up true context for their purchase decisions: size availability, consumer reviews, the occasion they’re shopping for and more. Every product has context within which decisions are made.
For those in the CPG and grocery industries, there is no context — or content — more relevant than the digital recipe. After all, content determines what gets into the cart.
The Moment of Inspiration Becomes the Moment of Influence
Product discovery for grocery items does not follow the same behaviors as in other product verticals. Most grocery shoppers love brands either inherited from childhood or found through eye-catching endcap displays in-store.
Unlike other verticals, grocery shoppers are also unlikely to look up reviews or ratings for the best ice cream or fluffiest bread. Contextual commerce allows CPG brands to reach consumers during true moments of inspiration. Specifically, contextual commerce advertising technology allows shoppers to purchase products directly from the content (e.g. recipes) that inspired them.
Extending On-Platform Activations Off-Platform
Limited on-platform inventory leaves CPG brands needing to find other ways to get in front of shoppers. Paid search is a proven tactic in driving add-to-carts. However, in a recent survey, 58% of respondents have visited a grocery retailer’s website or app in the last 60 days. For these shoppers, product discovery and information was the least likely driver of their visits.
Meanwhile, recipes are the number one driver of new product trial. With countless recipes on the internet today, advertising contextually on recipes provides a brand-safe environment with a significantly larger reach than on-platform media. By investing in off-platform, CPG brands extend their reach, find shoppers in the inspiration moment and drive stronger brand awareness. Pairing the two is a recipe for success.
Higher Relevance, Higher Conversions
Contextually relevant use cases drive engagement with grocery items online. If shopper marketers want to meet consumers closer to the point of conversion, they need to leverage harness the power of digital recipes now. And Shoppers who are perusing recipes show clear purchase intent. Instead of replicating in-store tactics in the ecommerce environment, CPG brands need to focus on meeting shoppers where they are, directly on the sites they use for inspiration and meal planning.
Reaching New and Lapsed Shoppers
With increased trust and habitual usage of food blogs and large online publishers for meal inspiration, CPG brands have a new opportunity to leverage contextual advertising not only to go beyond the store for the first time but to reach new and lapsed shoppers. This is a more significant challenge in programmatic or on-site targeting and is key to building customer bases.
Measuring Success with Contextual Commerce
Shopper marketing and ecommerce teams had become siloed verticals for CPG brands, often very separate from broader brand marketing initiatives. But all of these teams’ goals are the same: growth.
Today, the digital grocery industry is seeing more teams merge, as the line between digital and in-store becomes increasingly blurry. Commerce-powered consumer touchpoints require full buy-in from an entire organization. Contextual commerce is a modern CPG brand’s way of unifying efforts in a high-impact way.
Ultimately, commerce-enablement or “shoppability,” even within the right context, should not solely be measured by add-to-cart metrics. As shoppers are inspired by numerous digital touchpoints, these moments will show indicators, resulting in sales online and off.
Finally, to prove the success of their contextual commerce strategy, brands cannot simply measure media impressions and reach: they should seek to understand the full consumer journey by understanding engagements through the funnel. Here, “commerce” becomes the full picture of your shoppers and their journeys toward purchasing and success can become a more nuanced look at what actually drives sales.
Incorporating Contextual Commerce Into Your CPG Strategy
Brands that develop a contextual commerce strategy will discover how contextual targeting can complement their other omnichannel marketing efforts. For CPG marketers, contextual commerce is the layer between highly targeted, on-platform retail media and broad programmatic advertising.
Unlike traditional behavioral tactics, which rely on buying specific audiences and demographics that are dependent on third-party cookies, contextual advertising is built on buying keywords and placing ad units within or alongside relevant content. In short, it’s the difference between a poultry brand targeting a 40-year-old man who once purchased chicken while he’s reading the news and reaching him in the moment he is browsing for easy weeknight dinners.
This highly relevant shoppable advertising is an exciting development for the grocery industry, as food items are a less natural add-to-digital-carts from a shoppable ad than, say, a sweater. Contextual commerce makes this strategy actionable for marketers by allowing them to contextualize those items for a shopper. For example, including ground beef within a shoppable ad unit that also includes hamburger buns, ketchup and American cheese during summer months.
This contextual layer is vital. According to Epsilon, 88% of shoppers were only reachable off-site because those people simply didn’t visit the retailer’s site.
Chicory investigated further in a recent survey and discovered that, of shoppers who had not visited the retailer’s website or app in the last 60 days, 57% did their meal planning online, but not on the retailer’s platforms. Contextual targeting enables CPG brands to reach that 57% and to extend their reach beyond the boundaries of the retailer.com, unlocking the untapped layer where consumers are primed for considering future grocery purchases.
Transforming the moment of consideration and of inspiration into an opportunity to be added to cart is the beauty of contextual commerce. By layering shoppable technology that’s directly integrated with retailers onto contextual media, brands can secure a spot in the digital cart with just one click.
When CPG brands activate in the right context, they are able to reach and delight consumers — instead of cluttering their browser with irrelevant ads — to make a big impact. From that moment on, CPG sales and customer lifetime value only grow by leveraging the power of contextual commerce.
Takeaways and Resources
Contextual commerce is the smartest way for marketers to drive incremental traffic for their marketing initiatives. Success involves a few key considerations:
Align marketing efforts through a full-funnel approach, using recipes as a proven contextual media placement that mimics historic in-store shopper marketing efforts.
Learn more about your consumer through contextual signals they send as they’re decision-making online.
Use “shoppability” strategically. Adding direct to cart is just one option for commerce- enablement, and this functions differently depending on how and where your product is sold.
Determine your measurement strategy. Online behavior influences offline shopping and vice versa. Successful contextual commerce strategies need to include a full-funnel look at consumer behavior and the steps taken along the way.
Learn more below and see how other CPG brands have put contextual commerce into action:
