Retail media networks
The food industry is at a crossroads. Today’s shoppers are more demanding, smarter and more aware than ever before. Digital channels allow them to discover new products, shop for the best price and get groceries delivered to their doorstep – all in a matter of hours. Consumer product and merchandise (CPG) brands can use these digital interactions to advertise their products, offering highly personalized offers that result in sales.
However, most CPG brands are laser-focused on retailers’ e-commerce platforms and delivery services with the view that these channels represent the future of the market. However, according to a recent report, nearly 90% of grocery transactions still happen in stores while e-commerce and delivery combine to make up the remaining 10%. Given this overwhelming divide, there is an amazing opportunity for brands to use digital tools to better and more effectively engage customers where they are and before they visit their store of choice. Once there, brands can offer offers, discounts and other personalized content as the customer walks down the aisle, making purchasing decisions in real time.
Unfortunately, a technology gap is preventing CPG brands from taking advantage of this opportunity. Most Americans shop at about 35,000 regional or independent grocery stores across the country, but advertisers are spending a disproportionate share of their budgets with grocery chains with a national footprint — primarily Amazon, Walmart and Kroger. These well-funded national chains have the resources to deploy powerful personalization and targeting tools that can identify individual shoppers in their stores, on their websites and in their mobile apps. Regional and independent grocers—with their much smaller footprints—are unable to keep up, essentially seeding most of the retail media market to their larger competitors. However, each time a product is purchased at a Walmart or Amazon, the CPG brand owner makes less money than if the same product were purchased through the regional, independent grocery channel.
Leveling the playing field with an easy-to-use, multi-chain network of national retail media outlets will allow CPG brands to tap into this huge untapped market of hundreds of millions of shoppers.
National chains use technology and scale to create a huge 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 measure, track and optimize engagement – an amazing achievement that leads to increased sales and customer loyalty.
The average regional grocery chain consists of fewer than 10 stores, and most lack the marketing and technology resources of a national retailer, let alone the number of customers. They rely on legacy and third-party cookie tracking tools that provide insights about audience segments—for example, young professionals with incomes over $50,000. These segments can be incredibly accurate, but they are not provable and there is no way to know if a pushed offer resulted in a sale.
What is more effective? Send 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 that your offer hits the right person at the right time?
Actually, we know the answer. According to a recent survey by Prosper Insights & Analytics, 52 percent of American consumers participate in loyalty programs offered by brands.
Prosper – Customer Loyalty Programs
A majority of American consumers have joined three or more programs.
Prosper – How many customer loyalty reward 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 merchandise sold through their properties. In fact, CPG brands receive 10% higher margins when they sell their products through a regional or independent retailer over national chains. In an industry where margins are already tight, every bit counts.
Closing the technology gap
CPG brands need access to a retail media network built exclusively for regional and independent grocers that offers the same level of customization as 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 dependence of brands on a handful of chains national.
“There are approximately 35,000 regional and independent grocers across the country catering to hundreds of millions of shoppers who want to engage, who want to save money with offers and who want to discover new products they might like,” said Alasdair James. chief commercial and marketing officer at Swiftly. “There’s simply no efficient way for brands to work with dozens of chains to target these customers at the level of Walmart and Amazon. It’s an untapped market that CPG brands really need to try to capture.”
According to James, closed loop reporting built directly into 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 their transaction logs and CRM data to link 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,” said James. “Imagine being able to target every shopper with hyper-personalized offers – whether they’re in a Walmart, Stop N Shop or Dierbergs. All that matters is that the buyer is prepared for an offer on 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 buyers 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 walk down the aisle making purchase decisions. Collecting data directly from the source provides a better way for brands to understand and meet the evolving needs of customers in a way that respects their privacy.
2. Detailed analysis and reporting
Simply collecting data is not enough. You have to turn it into actionable knowledge. Brands can use detailed analytics reports to explore important business decisions, including which promotional offers to extend to a particular customer or whether they should increase or decrease price based on current demand.
3. A single multi-chain platform
Even brands with large marketing budgets don’t have the bandwidth to develop and maintain relationships with dozens of regional chains and independents. Your retail media network should span multiple chains so you can centrally manage your offerings from a single platform. It should also provide visibility across 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 beyond the checkout counter.
4. Custom control and configuration
To stay competitive, retailers and brands must incorporate the key features of retail media into their growth strategy – including omnichannel marketing, real-time pricing, alcohol cashback and other loyalty programs, and taking categories. This allows brands to manage their shopping experiences with full visibility and control.
5. Composable and future proof
Platform architecture is also important. Choose a retail media network that’s built with composable elements that can be added, subtracted, or scaled to meet any future demands you have. It would be a shame not to 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
Savvy shoppers today want to engage with their favorite brands on their terms when it’s most convenient for them. After all, who doesn’t want to save money? But CPG brands are unable to match the hyper-personalization capabilities of national retailers when interacting with shoppers in regional and independent grocers—leaving a large, untapped market on the table. A multi-chain media retail network with closed reporting can help bridge this gap – allowing brands to engage with hundreds of millions of shoppers in these stores on a personal, one-to-one basis.
Just make sure you choose a retail media network that is cross-chain, 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 buyers are waiting for your personalized offer.
