Case Study: From Bargain Hunters to Loyal Shoppers—The Growth Marketing Strategy Behind GrubMarket’s Unbeatable Deals

Overview

At GrubMarket, the business was divided into two key segments: B2C (consumer) and B2B (wholesale).

On the B2C side, we operated as an online farmer’s market and grocery store, delivering fresh, local produce along with popular organic and healthy dry goods directly to customers. The marketing team was tasked with finding innovative ways to boost customer loyalty and increase repeat weekly purchases while driving additional revenue to fuel our growth story. Our goal was to get customers to shop more frequently, moving beyond occasional purchases to regular, habitual shopping—setting us apart from traditional grocery stores.

The Challenge

The primary challenge was creating a compelling hook that would persuade customers to choose GrubMarket over physical grocery stores. We needed to shift consumer behavior and make online grocery shopping a routine, which is difficult when customers are accustomed to the convenience of local stores.

The Strategy

I developed the concept of "Unbeatable Deals," a daily promotion featuring one food item at a price far lower than any competitor. By sourcing directly from farmers in the Bay Area, we were able to cut out the middleman, offering prices no other grocery store could match. While grocery stores typically offer sales, this was different—this wasn't just a discount; we slashed prices down to our cost, delivering an eye-popping offer that truly lived up to its name. For example, we sold a pint of strawberries for just $0.99, compared to the typical $4.99 or $5.99 at a grocery store.

This was part of a barbell strategy, pairing low-margin items with higher-margin products. The "Unbeatable Deal" served as the hook, driving shoppers to load up on other profitable items to meet the $50 minimum order required for delivery. This ensured favorable blended margins for the company.

The Execution

We executed the campaign by revealing the "Unbeatable Deal" every morning via email and SMS, building anticipation and excitement among customers. A follow-up reminder was sent in the evening to reinforce urgency, emphasizing that the deal would expire at midnight. To prevent customers from exploiting the low-margin pricing, we set reasonable purchase limits—usually between 3 and 5 items per customer.

This strategy drove increased traffic and engagement, with customers adding more items to their carts to meet the minimum order requirement, boosting both sales and overall customer retention.

The Results

The "Unbeatable Deals" concept resulted in a significant increase in repeat purchases, with our weekly order frequency jumping from 1.2 orders per week to 1.8 orders per week. This increase was pivotal in strengthening customer loyalty and retention, helping to lay the foundation for sustained growth.

In addition to boosting loyalty, the popularity of the "Unbeatable Deal" directly fueled revenue growth. Each of our three main markets generated between $10,000 and $30,000 in extra revenue daily, depending on the popularity of the deal. This daily revenue boost was critical to the company’s financial success, contributing up to $90,000 per day and totaling an impressive $2.7 million in additional monthly revenue.

This revenue growth played a crucial role in GrubMarket reaching breakeven within just two years, setting the stage for long-term profitability and continued expansion.

Key Takeaways

• Behavioral Change Through a Hook: The "Unbeatable Deals" created urgency and excitement, shifting customer shopping habits toward more frequent purchases. The unpredictability of the deal kept customers engaged and eager to return, transforming occasional shoppers into loyal, repeat customers.

• Strategic Use of Low-Margin Items: The barbell approach—using low-margin deals to drive the purchase of higher-margin items—ensured the strategy was profitable while encouraging customers to spend more.

• Leveraging Email and SMS: The combination of email and SMS reminders kept the deal top of mind throughout the day, boosting conversions and driving repeat purchases by creating a sense of anticipation.

• Scalability: The concept proved easily scalable across multiple markets, generating significant additional revenue regardless of location, making it a core strategy for the company’s expansion.

• Customer Loyalty Boost: Offering valuable, fun deals strengthened the sense of loyalty and enjoyment among customers, resulting in a more engaged, repeat customer base and higher lifetime value.