CPG Archives | Tenser'sTirades

Retail Media Scale: CPG Brands’ Conundrum

March 14, 2025 by James Tenser

HOW DO BRANDS UNDERSTAND retail media scale as they plan spending?

In previous articles in this series, we addressed the challenges CPG brands face in dealing with retail media networks. It summarized brand marketer spending trends and described why brand teams are challenged when it comes to making decisions about retail media investments across their entire distribution networks.

We discussed the struggle brands face as they endeavor to support their retail distribution networks with proportional retail media investments across all their distribution channels. With hundreds of small retailers seeking a fair share of the pie, CPGs simply don’t have the bandwidth for empirical decision-making.

Regional and independent retailers are not the only ones concerned about the concentration at the top of the Retail Media Network hierarchy.

CPGs are also wrestling with this, and the conversation is beginning to bring trading partners together in search of workable solutions which enable a fair share of retail media spending to find its way to numerous retailers who are not on the top-ten RMN list.

“The network is the piece that’s missing.”

– Adam Zimmerman, Ideal by Design House

At the handful of larger retailers where retail media is a must, joint business planning discussions have become more complicated, as CPGs work to establish new practices that incorporate traditional trade marketing along with the type of targeted messaging that retail media enables. Negotiations must now address how outcomes can be measured and what merchandising support will be required in the stores and fulfillment centers.

Needed: “Connective Tissue”

At February’s 2025 NGA Show in Las Vegas, two panel sessions were devoted to the existential challenge faced by independent grocers as they seek sufficient retail media scale (i.e., audience size) to be relevant to national brands. Wholesalers and retailer networks represented at the conference discussed their efforts to deliver targetable shopper audiences with sufficient scale and measurability to justify CPG investment.

Retail Media and CPGs: How do Brands Optimize Investments?

February 13, 2025December 2, 2024 by James Tenser

AMID THE HYPE AND HYPERBOLE around Retail Media Networks, some fundamental issues about CPG marketing spending have barely been addressed. Brand marketers have an opportunity – perhaps an imperative – to elevate the dialog about how funds should be allocated, to maximize returns and sustain mutually profitable relationships with retail partners.

Ad standards are yet to be established across the RMN universe. The allure of first-party data is compelling, but each network presents its own interfaces and definitions. Established norms around trade marketing spending – the lion’s share of marketing investment by brands – are under pressure. Beneath the surface lurk issues around fairness and proportionality, too.

THIS ARTICLE IS PART ONE of a series, originally published on CPGmatters.com

Experts contacted for this article spoke mostly on background. The consensus is that RMNs are not easy to master and that best practices are yet to emerge. They introduce a heightened degree of intricacy for brand marketers and retailers alike. Some standards may be on the horizon, but trading partner joint planning is not getting any easier.

Concentration at the Top

A relatively small handful of retailers with very broad geographies and high customer counts are sweeping up the lion’s share of retail media spending and decision-making capacity. This presents steep challenges for CPG brands. Their “brand-width” is not unlimited, after all.

Do CPG Companies Get Online’s Potential?

May 31, 2022December 6, 2013 by James Tenser

CONSUMER SURVEYS FROM Deloitte and others consistently report strong intentions by households to purchase more of their grocery and packaged goods online. This has been true for many years. I suspect there’s some response bias in play.

A recent Retailwire.com discussion raised this issue in the context of a gap between measured shopper interest in online CPG purchases and the less-than-dynamic efforts by most CPG companies to take full advantage of the opportunity. Are they missing the boat? Or are they just taking a prudent approach in the face of greater complexity?

Here’s my take:

Until the perspective shifts from, “How will we sell our products online?” to “How will we help households better manage their pantries?”, I believe this business will continue to be “just around the corner” for CPG, as it was in 1997.

Certainly, splintering the grocery shop into dozens of weekly decisions, transactions and deliveries is no way to help shoppers streamline their consumption routines. This was then and remains now the fallacy of the “consumer direct” concept. Disintermediation is bunk.

A re-consideration of the grocery basket and how it arrives to the home is another story. That requires a solution orientation on the part of the service provider (the retailer). Never-run-out tools, bulk shipments of high-consumption items, and secure unattended delivery have all been well-received in the past. Rapid delivery mechanisms from Amazon.com and others may add traction in areas with urban density, but the relevance will vary widely by location and purchase occasion.

Unfortunately for brands, these emerging concepts will not simplify the in-store shopper marketing imperative in any way. They do add, however, a whole new set of required practices for brand promotion and interfacing with online channels and shopper marketing outside the store. Set against the hard reality of somewhat inelastic total demand, that’s a very tough formula.