We’re serving up five winning strategies meal kit companies use to increase their average order value and how you can effortlessly adapt them to your B2C or B2B grocery eCommerce shop.
Meal kit services have become a dominant force in the online food sector, offering consumers variety, value and simplicity at their doorstep. The global market is projected to reach €12.29 billion in revenue by 2024, with a steady annual growth rate of 4.79%. By 2029, this number is expected to climb to €15.53 billion, with 25 million users worldwide (Statista, 2024).
The appeal of meal kits goes beyond the convenience of enjoying a home-cooked meal without the hassle of planning, shopping and prepping. The real magic lies in how these companies differentiate themselves and innovate, focusing on building meaningful consumer relationships. They don’t just deliver meals; they create curated experiences tailored to individual tastes, ensuring a seamless, enjoyable journey from ordering to cooking.
Even if your business isn’t in the D2C market, there’s a lot to learn from these strategies. The grocery retail industry in Europe faces tough times, described by CEOs as challenging, complex, and highly competitive. With inflation driving consumers to cut back on spending, the industry has seen a decline in volume and significant downtrading. Looking ahead to 2024, 36% of industry leaders expect conditions to worsen, 40% think they’ll stay the same and only 24% are optimistic about improvement (McKinsey, 2024).
In light of these challenges, embracing differentiation and innovation is crucial to stay competitive. We’ve pinpointed five unique strategies from the meal kit industry that can help increase your B2C and B2B grocery eCommerce store’s AOV. By implementing these, you can navigate the complexities of the market and position your business for growth and resilience.
Before diving in, let’s clarify what a meal kit service means. It refers to a subscription-based service that delivers pre-packaged meals directly to customers’ homes. The kits include pre-portioned ingredients and step-by-step instructions, making it easy to prepare a home-cooked meal.
5 meal kit strategies to increase your grocery eCommerce AOV
Strategy #1: Personalization for every taste
Personalization is a basic ingredient for any successful meal kit service today. Customers expect products and experiences tailored to their needs, from dietary requirements and taste preferences to scheduling. Grocery eCommerce businesses can similarly make consumers feel seen with AI-based personalization.
Imagine a supermarket that could rearrange its shelves for each customer based on their unique preferences that day. With technologies like Atlas AI, this level of personalization is possible. Atlas tailors search results and recommendations by studying how shoppers behave, including what they search for and how they interact with products. It focuses on what the shopper wants right now, adjusting search results based on their latest actions and interest in buying.
For example, if a customer consistently chooses products with eco-friendly packaging, such as rice in jute bags and milk in glass bottles, Atlas AI identifies them as environmentally conscious. When this shopper browses the “seeds and nuts” category, they’ll see bulk items in resealable paper pouches rather than plastic snack packs.
Another shopper searching for “kalamata olives” and “feta cheese” followed by “olive oil” indicates a broader interest in Greek culinary products. Atlas AI quickly adapts, prioritizing Greek olive oils to keep the results relevant and aligned with the shopper’s taste. This level of relevance contributes to a greater sense of appreciation and loyalty, leading to increased AOV. Learn more about Atlas AI.
Nearly half of US online adults expect websites to understand what products they are most likely to want based on their history (43%) and based on their current shopping session (40%) (Forrester, 2023). This growing expectation for customization isn’t just a trend – it’s a powerful strategy that can set your business apart. For B2B buyers, one way to provide this level of personalized service is through Customer-Specific Information. This solution allows you to display prices and content tailored to each buyer. You can easily implement complex pricing tiers, offer special discounts to loyal customers and even restrict the visibility of certain products to specific visitors. Additionally, individualized advertising texts for each product and customer can strategically target key personas.
Just as meal kit services use discounts and loyalty rewards to keep customers hungry i.e., reactivate to get 60% off the first box, refer a friend for 10% off the next purchase, B2B grocery eCommerce can also employ similar tactics. For example, displaying discounts to customers who reach a certain order value, such as a 20% discount on their next purchase in a specific product category, can incentivize higher spending.
Swedish grocery chain Coop wants to offer a holistic shopping experience, both online and in-store. To achieve this, the cooperative relies on artificial intelligence and a high degree of personalization. Read the case study.
Strategy #2: Specialty kits and themed meals
Food is more than just sustenance; it’s a gateway to culture and a way to connect us through holidays, sports, and pop culture events. Meal kit services are capitalizing on this connection in creative ways. A standout example is HelloFresh and their limited-edition Buddy the Elf™ spaghetti kits that sold out in mere minutes. Their holiday hosting box for this year has sold out well in advance, showing the high demand for themed offerings and their potential to increase AOV.
For your grocery eCommerce shop, there are endless opportunities to tap into similar trends throughout the year:
- Seasonal shifts. Think winter soups and summer cocktails.
- Special occasions such as Christmas, Valentine’s Day or niche holidays.
- Advertising campaigns including television ads and promotional discounts.
The key to success is identifying and reacting to emerging micro-trends in real time. This is now possible with Pulse, our new AI-powered merchandising solution. Trends can shift rapidly, especially in today’s fast-paced world of streaming media, social platforms and influencers. Consider the “Cottage cheese everything” trend, the top FoodTok trend of the year (TikTok, 2023), which saw Google searches for “cottage cheese” reach their highest levels since 2004.
Missing a micro-trend like this can be frustrating, but consistently missing out on them can mean leaving significant revenue on the table. So, how does Pulse’s contextual AI approach work?
1. Retrieves products that match the context of “cottage cheese” with a human-like understanding.
2. Ranks products based on popularity, individual preferences and session intent.
3. Incorporates 🔥 momentum (trends and shifts in buying behavior), displaying trending products at the top.
With Pulse, you can seamlessly capitalize on all trends in your assortment without lifting a finger. Learn more.
Strategy #3: Strong focus on health
Living and eating healthier is a priority for many consumers today, and they often turn to brands for support. Meal kits cater to this need by offering customizable options like meals under 650 calories per portion, gluten-free and plant-based choices.
Position your grocery eCommerce business as a trusted health ally by implementing faceted search in your online shop. This feature allows buyers to refine search results based on specific dietary needs and preferences, such as keto-friendly, low sodium, peanut-free, diabetes-friendly and organic certifications. While faceted search is a useful and standard approach, an even more interactive method to enhance the shopping experience is Guided Selling.
Guided Selling functions like a digital sales associate, fully automated to help customers find exactly what they need. It involves asking specific questions about the customer’s preferences and requirements, tailoring the product selection accordingly. For example, a generic search like “pizza” might yield overwhelming results. Guided Selling simplifies the search by engaging with visitors in a natural, conversational way, helping them find the perfect pizza that meets their dietary needs and preferences.
Strategy #4: Cross-selling and upselling
Meal delivery services often boost average order value by offering additional services, premium meal options and a variety of add-ons. Market by Marley Spoon, for example, allows customers to add extra ingredients, ready-to-heat meals, snacks, sides and desserts to their orders.
Online grocers can similarly increase AOV by using strategic recommendations. Our recommendation solution doesn’t rely on big data like frequently combined products, sensitive demographic data or log-ins. Instead, our AI algorithm focuses on real-time signals from customers and an understanding of the relationships between products. This approach also includes new and niche items often overlooked by traditional recommendation engines.
Research shows that 89% of consumers appreciate recommendations that are on sale or come with promotions. 84% prefer suggestions based on their current browsing session and 87% want to see items similar to what they’re considering (Forrester, 2023). To capitalize on this, suggest complementary products, like sauces with pasta, bread with deli meats and milk with coffee. Recommend seasonal fruits and vegetables for freshness and better prices. You can also upsell a premium, organic single-origin coffee to customers choosing regular ground coffee.
Another innovative approach to increase AOV by simplifing repeat purchases is the Predictive Basket. This AI-based eCommerce solution has already proven successful in the B2B online grocery sector at Kastner, where it has increased shopping baskets by an average of 2.3 products. This tool predicts which products a customer is likely to add to their cart based on previous shopping habits and seasonal ordering cycles.
Unlike static order history, the Predictive Basket can forecast daily when a customer might need new essentials like milk, eggs or coffee. This results in highly relevant purchase suggestions that customers can quickly select without extensive searching. So, before a customer runs out of a product and before they can buy it elsewhere, the Predictive Basket reminds them to reorder.
The Predictive Basket is the only solution of its kind on the market. Learn more.
Strategy #5: Embracing a data culture
A prime example of data-driven success is HelloFresh, which has outpaced competitors with its strategic use of data to retain customers. While other brands concentrated on attracting new customers, HelloFresh prioritized enhancing the experience for existing customers and simplifying its menu offerings (Medium, 2023).
HelloFresh leverages data in numerous ways. For example, online searches during the Christmas season involving turkey or ham to adjust their seasonal offers and promotions. If they know certain customers enjoy fish on Fridays, they target these customers with specific seafood offers. By analyzing national food trends, the company tailors special offers to appeal to a broader audience (see strategy #2).
In grocery eCommerce, knowing your customers through data is just as important. By using tools that analyze everything from what customers search for, how they browse, which products sell well, and their entire shopping experience, online grocers can really understand what their customers like and want. This information helps them to personalize the shopping experience, offer the right products (especially those that might not be available yet), create effective marketing strategies and better manage their stock by predicting what will be popular in different seasons.
Takeaways
The meal kit market presents dynamic opportunities to engage with customers in innovative ways. The best part is that these strategies can be easily integrated into your online shop. By embracing these five key strategies, you can transform how you connect with and serve your customers, all while also increasing your AOV:
- Deliver personalization for every taste: Tailor offerings to individual preferences, enhancing customer satisfaction.
- Identify and react to what’s trending: Stay ahead of the curve by quickly adapting to popular trends.
- Become their health ally: Allow customers to easily find products based on dietary needs, making it easier for them to find what they need.
- Enhance their list with valuable recommendations: Suggest complementary products that add value to their shopping experience.
- Use data to better serve customers: Leverage data insights to understand and meet customer needs more effectively.
If you want to implement these strategies, our team is here to help. With experience from over 2,000 integrations and trusted by leading grocery eCommerce retailers like Netto, Spar, Coop, and Bofrost, we can provide the expertise and support you need to succeed.