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Business case studies No 350 - 02.07.2021

In this week's egtabite, we look to Russia, where an online grocery store witnessed significant growth spearheaded by TV advertising. The e-commerce business of the Perekrestok brick-and-mortar store chain was initially launched in 2017, offering online shopping and delivery in St. Petersburg since October 2018. Since then, the service has expanded to other Russian cities, including ten new cities in 2021 alone, and in three years, it has become one of the most prominent players in the country's e-grocery segment.

Due to its success, the online business has been an independent business unit within X5 Retail Group since January 2020. Later that year, in August, the brand was updated should be say “upgraded” from to Perekrestok Vprok, allowing for a smooth transition to a completely self-sufficient brand not directly associated with the Perekrestok traditional grocery store chain.

Reaching new customers in a growing segment

The change of brand name required a supporting campaign to inform the audience. The campaign’s goal was also to expand the brand's current customer base. The advertising agency Blacklight was in charge of the creative concept, and Havas Media managed the ad placement.

The main character of the TV ad is a courier who meets residents in an apartment building elevator and explains to them the advantages of online shopping at Perekrestok Vprok. In that context, it is essential to note that the habit of online shopping is nascent in Russia. Overall, 7% of Russian customers use product delivery services, while in the two largest cities of Moscow and St. Petersburg, the share is 23%. The client's task thus was to inform the "unprepared" audience about the advantages of Perekrestok Vprok.

Selecting the right media mix

Increasing customers' knowledge is the essence of communications when developing a new brand. Perekrestok Vprok used an econometrics model to select the right media mix for its multi-platform campaign that included TV, radio, digital audio, OOH, and digital channels to meet its objectives. The tool allows for optimising the use of each media to drive an increase in sales. The model analyses the impact of multiple factors, including competitors’ activity, the pandemic, holidays, weather conditions, performance costs, as well as the impact of offline and digital brand advertising. Equipped with the results, the campaign was launched and ran from August 2020 until the end of November.

TV delivers real business outcome

According to the findings of the econometric model, TV advertising contributed three times more to the increase in the number of orders than classic digital and OOH together – demonstrating its strengths at the top level of the funnel. The findings showed that TV advertising worked much better than other media to attract new customers, with TV scoring 15 percentage points higher in efficiency than the second-highest media. Simultaneously, TV had a higher impact when communicating to already loyal customers.

For Perekrestok Vprok, TV was, therefore, the central media channel of the campaign, which overall achieved great coverage across all communication channels, exceeding 90% of the target audience. Since the launch of the campaign in 2020, the brand has continued to advertise on TV. After establishing the new brand name, the e-commerce business released a new advertisement in 2021 emphasising the idea behind the service – offering a large selection of goods delivered to your door at affordable prices.



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