Retail Media and CPGs: How do Brands Optimize Investments?

Question marks at the table


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.

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BrainTrust LIVE: From NRF 2023

This year’s NRF Big Show in New York was a huge event.

Once again, I joined my good friend Ricardo Belmar of Microsoft for a run-down on some of the show’s most important trends. Watch it all here: BrainTrust LIVE NRF 2023

Key NRF Insights

Along the way we tackle:

  • The problem of retail overstocks
  • The surge in Retail Media Networks
  • In-store sensing and electronic shelf labels
  • Omnichannel trends
  • The ubiquity of AI claims at booths and in sessions
  • The atmosphere and “tone” of the event

The NRF organizers said about 35,000 folks attended this year’s Big Show.

NRF Recap

You may find convenient access to the official NRF event recap here.

This was not my first rodeo. Ricardo and I have teamed up at a number of industry events to share our observations. Check out my on-the-floor solo webcast from 2019.

Why are Retailers so Overwhelmed by Overstocks?

overstocks

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NO SURPRISE, the retail industry is swimming in excess inventory lately. Overstocks leapt forward by double digits in the latest quarter for a dozen of the nation’s largest chains, as they rebound from the supply shortages and out-of-stocks which have vexed them since early 2020.

Today on RetailWire.com, I weighed in on a lively discussion about this problem entitled: Why are retailers struggling so hard to balance inventory? Certainly 20, 30 and 40 percent leaps in stock on hand are partly a sling-shot effect, since retailers over-ordered desperately during the 2020-21 supply disruptions. The situation has been rough on all retailers, but the apparel leaders are taking early and aggressive markdowns on overstocks that arrived too late for missed seasons.

Opinionated as I am about inventory accuracy in retail, I jumped on my high horse with a critique of the global manufacturing and shipping industries. I tossed in a not-too-subtle swipe at Adam Smith’s “Invisible Hand” for good measure.

The implications span both micro- and macroeconomics. Long lead times are too often tolerated in the name of scale economies. Big plays in highly concentrated markets set the stage for massive disruption when things go wrong.

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Third Party Grocery Delivery? Omnichannel Grocers Wrestle With Choices

grocery delivery

THIS MORNING on RetailWire.com I jumped on my high horse again with this little screed about grocery delivery strategies for supermarkets. As usual, I didn’t shade my opinion about 3rd party solutions, and I know some will take exception. That’s OK. The debate is important.

For perspective, when I founded the VStoreNews e-letter in 1998 I posited a world where grocery stores delivered everything – their own products plus those of other local retailers. Hasn’t happened yet.

The Grocery Delivery Debate

My comments today on RetailWire.com:

I’m squarely in the camp that advocates for own control of all customer-facing services by the retailer. High delivery costs remain a challenge, but this factor must be accounted for in a comprehensive manner. What do you really risk when you put digital moments of truth in the hands of an outside solution provider?

Third-party services intermediate the retailer’s service experience and divert essential data about shopper behavior. I could never agree to hand over control of my brand relationships to gig-workers directed by a company that is angling to become my competitor.

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