Grocery Retail Media – A Launchpad For New CPG Products

Retail Media Networks
The grocery industry is at a crossroads. Today’s shoppers are more demanding, more savvy and more cost-conscious than ever before. Digital channels allow them to discover new products, shop around for the best price and get groceries delivered to their doorstep – all in a matter of a few hours. Consumer Products & Goods (CPG) brands can leverage these digital interactions to advertise their products, delivering highly personalized offers that result in sales.
However, most CPG brands are laser focused on retailer’s ecommerce platforms and delivery services with the thinking that these channels represent the future of the market. However, according to a recent report, nearly 90% of grocery transactions still occur in-store while ecommerce and delivery combine to make up the remaining 10%. Given this overwhelming split, there’s an amazing opportunity for brands to use digital tools to engage customers better and more effectively where they are and prior to them visiting their store of choice. Once there, brands can deliver offers, rebates and other personalized content as the customer walks the aisles, making purchasing decisions in real time.
Unfortunately, a technology gap is preventing CPG brands from taking advantage of this opportunity. Most Americans shop at the approximately 35,000 regional or independent grocery stores around the country, but advertisers are spending a disproportionate percentage of their budgets with grocery chains with a national footprint – mainly Amazon, Walmart, and Kroger. These well-financed national chains have the resources to deploy powerful personalization and targeting tools that can pinpoint individual shoppers at their stores, on their websites and in their mobile apps. Regional and independent grocery stores – with their much smaller footprints – are unable to keep up, essentially seeding the majority of the retail media market to their larger competitors. However, every time a product is bought in a Walmart or Amazon the CPG brand owner makes less money than if the same product were purchased through the regional and independent grocery channel.
Leveling the playing field with a simple to use, multi-chain national retail media network will allow CPG brands to open up this huge untapped market of hundreds of millions of shoppers.
National Chains Use Technology and Scale to Create a Large Advantage
National chains dominate the retail media network market because they maintain complete control over their customers’ shopping experience. They are able to combine transaction logs with rich customer information from extensive customer relationship management (CRM) systems. This integration allows them to attribute actual purchases to media campaigns, helping CPG brands to measure, track and optimize engagement – an amazing achievement that leads to increased sales and customer loyalty.
The average regional grocery chain is made up of less than 10 stores, and most lack the marketing and technology resources of a national retailer, let alone the number of customers. They rely on stale, third-party cookie tracking tools that provide insights around audience segments – young professionals with an income over $50,000, for example. These segments can be incredibly accurate, but they are not provable and there’s no way to know if a pushed offer resulted in a sale.
What is more effective? Sending a coupon to Daniel who you know has purchased your product in the past? Or sending a coupon to thousands of young professionals in a geographic area, hoping and praying your offer will hit the right person at the right time?
Actually, we know the answer. According to a recent Prosper Insights & Analytics survey, 52 percent of U.S. consumers participate in loyalty programs offered by brands.
Prosper – Customer Loyalty Programs
A majority of U.S. consumers have joined three or more programs.
Prosper – How Many Customer Loyalty Rewards Programs
National retailers know the power of their sophisticated personalization and targeting tools and use this leverage to force brands to accept lower margins on goods sold through their properties. In fact, CPG brands receive 10% higher margins when selling their products through a regional or independent retailer over national chains. In an industry where margins are already razor thin, every bit counts.
Closing the Technology Gap
CPG brands need access to a retail media network built exclusively for regional and independent grocery stores that provides the same level of personalization as the larger retailers. The ability to engage with hundreds of millions of shoppers on a one-to-one basis at scale would massively optimize marketing spend, lead to higher margins and less on brands’ dependence on a handful of national chains.
“There are approximately 35,000 regional and independent grocery stores around the country that cater to hundreds of millions of shoppers who want to be engaged, who want to save money with offers and who want to discover new products they may like,” said Alasdair James, chief commercial, and marketing officer at Swiftly. “There’s just no efficient way for brands to work with dozens of chains to target these customers on the level of Walmart and Amazon. It’s an untapped market that CPG brands really should be trying to capture.”
According to James, closed-loop reporting built directly in a multi-chain retail media network can help bridge the technology gap between national retailers and regional and independent grocery chains. This would allow CPG brands to use transaction logs and their own CRM data to tie offers to specific transactions.
“Extending hyper-personalization to regional and independent grocery stores would open up a huge market for CPG brands, allowing them to engage with hundreds of millions of shoppers in 35,000 stores across the country,” James said. “Imagine being able to target any shopper with hyper-personalized offers – regardless of whether they’re in a Walmart, Stop N Shop or Dierbergs. All that matters is that the shopper is primed for an offer for that particular product and marketers can attribute the offer to an actual transaction for measurement purposes.”
Here are five things to consider when looking for a retail media network that enables closed loop reporting:
1. First-party data
You can’t deliver personalized customer experiences without first knowing who your shoppers are, what they want and how you’ve interacted with them in the past. Combining this critical data with third-party data allows brands to tailor communications to individual shoppers as they are walking the aisle making purchasing decisions. Gathering data directly from the source offers a better way for brands to understand and meet customers’ evolving needs in a way that respects their privacy.
2. Detailed analytics and reporting
Simply collecting the data isn’t enough. You need to turn it into actional insights. Brands can use detailed analytical reports to explore important business decisions, including which promotional offers to extend to a particular customer or whether they should increase or decrease pricing based on current demand.
3. A single, multi-chain platform
Even brands with large marketing budgets do not have the bandwidth to develop and maintain relationships with dozens of regional and independent chains. Your retail media network should include multiple chains, so you can centrally manage your offers from a single platform. It should also provide visibility into the entire shopping experience – from first touch to post-sale and across digital channels and in-store experiences – allowing you to continue to develop a lasting relationship well beyond the checkout counter.
4. Custom control and configuration
To stay competitive, retailers and brands must incorporate key retail media features into their growth strategy – including omnichannel marketing, real-time pricing, alcohol cashback and other loyalty programs and category takeovers. This allows brands to manage their own shopping experiences with complete visibility and control.
5. Composable and future proof
Platform architecture is also important. Choose a retail media network that is built with composable elements that can be added, subtracted, or scaled to meet whatever requirements you have in the future. It would be a shame to not be able to implement a revolutionary marketing strategy or technique because you are locked into a static retail technology platform.
It’s Time to Improve Engagement for All Your Customers
Today’s savvy shoppers want to be engaged by their favorite brands on their terms when it is most convenient for them. After all, who doesn’t want to save some money? But CPG brands are unable to match the hyper-personalization capabilities of national retailers when interacting with shoppers at regional and independent grocery stores – leaving a huge, untapped market on the table. A multi-chain media retail network with closed-loop reporting can help bridge this gap – allowing brands to engage with the hundreds of millions of shoppers at these stores on a personal, one-to-one basis.
Just make sure you choose a retail media network that is multichain, allows you to integrate your own first-party data, includes powerful analytics, can be customized to control the entire shopping experience and is future proof with a composable architecture. Hundreds of millions of shoppers are waiting for your personalized offer.
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