Giveaways have taken over social media as CPG startups look for ways to promote retail launches

There are a few driving factors behind most of these contests. For one, there are a number of expenses associated with entering a major big-box or grocery store, and startups, in turn, are looking for low-lift, simple tactics to promote the launch. Giveaways are also a way to drive social media engagement and increase follower counts at a time when CPG startups are competing with hundreds of other brands for attention online.

While giveaways aren’t meant to be a sales driver, executives of brands like Hilma, Jacobsen Salt Co. and Spring & Mulberry say giveaways help create enough in-store awareness that they’ve become a part of their retail marketing playbook.

In May, the natural health remedies brand Hilma launched in Walmart and launched a series of giveaways to support the rollout. For one of the giveaways, the company asked customers to share Hilma’s recent post about the launch on their Instagram stories and tag the company to be entered for a chance to win a $100 gift card to Walmart.

Hilma co-founder Lily Galef told Modern Retail the company doesn’t spend major ad dollars on promoting its products at its big-box partners, Target and Walmart. With giveaways, the focus is on rewarding customers for showing their Hilma purchase receipt at these retailers or sharing the launch news to spread the word.

While it’s difficult to measure these sales, Galef said, “We measure success here by views and engagement, and we usually see 3X our average views on content like this.” Recent Hilma posts featuring Walmart and Target giveaways generated 30,000 views each.

All in all, freebies and gift cards act as a relatively cheap tool to get Hilma’s social media followers to stores. “Customers love it, and retailers love it because we are sending a new audience into their stores who often buy a lot more than just the Hilma product,” Galef said. 

The limits of giveaways

Salt brand Jacobsen Salt Co., which launched in 2011, tested its first email-based giveaway earlier this year in support of its Fresh Market debut, done in collaboration with other emerging brands sold at the grocery chain. The brand has done numerous other giveaways on Instagram

Kelsey Harris, director of marketing at Jacobsen Salt Co., said the takeaway from the campaign was that contests can help generate awareness but also have limitations to drive customers to purchase in-store. 

Followers of Jacobsen Salt Co. were prompted to enter by purchasing one product from either the brand, Burlap & Barrel, Barnacle Foods or Tiny Fish Co. at any The Fresh Market location. In turn, customers had to either scan their receipts or upload information into a form to be entered in the contest.

In turn, this initiative wasn’t necessarily meant to generate a huge percentage of sales but rather to see what customers were willing to take extra steps to engage with the brand. And, Harris said, it was a positive sign to see the customers who were willing to do just that.

Moreover, it was too hard to tell the store-level sales since the sweepstakes ran during the launch phase when the company didn’t have scan data from the retailer. “However, we were able to glean that 57% of the sweepstakes entrants lived in a city or region where the retailer had a store location,” Harris said. “This goes back to how giveaways, for us, are primarily for driving brand awareness.”

Harris said that after analyzing the entry results, “we decided that the campaign was a good awareness-building tool and a decent driver of purchase to the store generally.” 

Fine-tuning the giveaway playbook

Chocolate startup Spring & Mulberry launched in 2022, and in September, it entered its first major grocery chain, Whole Foods Market. For the first two years in operation, the company was focused on establishing its brand through DTC and specialty boutiques, as well as retailers like Erewhon and Anthropologie.   

“When we first launched as a small, bootstrapped startup, we leveraged giveaways to grow our email lists and social media following,” Kathryn Shah, co-founder of Spring & Mulberry, told Modern Retail. At the time, Shah said co-branded giveaways were a popular way to partner with larger brands and influencers who provided the brand credibility and cache. “Consumers were excited about giveaways and participation was high; the challenge was then converting those giveaway subscribers to customers, especially on email,” Shah said.

Now that Spring & Mulberry is more established, the company is turning its attention to using giveaways as an engagement tool, she said, “and [as] a way to surprise and delight our fans and reward them for their brand affinity.” Instead of partnering with like-minded brands on fan prizes, Shah said, “We now give away limited edition or artisan-made products designed specifically for Spring & Mulberry.” 

For example, Spring & Mulberry just partnered with jewelry designer Haricot Vert to create a custom bracelet featuring the brand’s mixed berry bar as a charm. “We timed this with our launch at Whole Foods to drive excitement and buzz during an already exciting time,” she said.

While it’s early to quantify how much sales the contest drove at Whole Foods, Shah said it has driven direct engagement in recent weeks. “We did have dozens of customers writing to us saying that they either spotted the bars in Whole Foods or that the bars weren’t available yet,” she said. “So people were definitely aware and on the hunt.”