THE RETAIL MEDIA NETWORK frenzy may be approaching the end of the beginning, as Shopper Media bring more In-store retail media options to CPG Brands. Now, the hard work starts.
For CPG brands, the story-within-the-story revolves around a growing number of in-store networks designed to reach shoppers where the vast majority of final purchase decisions are still being made. Call it “shopper media.”
In the food-drug-mass channels, 84% of transactions are still taking place in physical stores, while FMI The Food Industry Association estimates that just 6% of grocery items were sold online in the full year 2023.
This is the fourth part in a series. Republished here by permission from CPGmatters.
As we have been reporting here in recent months, that reality compels brands to consider where their newly-repurposed retail media budgets will best be spent. So far, a handful of very large, primarily digital networks have soaked up the lion’s share of the ad investment.
CPGs have a long history of providing marketing support for their brands across the broad physical retail landscape, not only at the largest chain accounts. Distribution power is brand power.
For this reason, although the big numbers and hype have surrounded digital retail media sales, shopper media retain a significant value-creation opportunity for brands that has barely been tapped:
- Frequency of visits. Four out of five shopping trips are still in-person. Even for regional retailers, this can add up to millions of monthly opportunities to present messaging from brands, on screens, via audio and on personal digital devices.
- Loyalty penetration. Retail media works best when messages and offers are finely personalized. As frequent shopper participation approaches the saturation point, they present a superb mechanism for brands. With appropriate access, they can leverage first-party and zero-party data to efficiently present offers that motivate repeat consumers and influence potential ones.
- Aligned with product distribution. Half or more of all CPG product is distributed across numerous regional and independent retailers. Brands intuitively recognize that physical distribution power is the foundation of lasting success. So far, their retail media messaging has not matched that level of coverage.
Not surprisingly, retail media networks remained top-of-mind at last month’s Shoptalk conference in Las Vegas, both on the presentation stages and in the aisles of the exhibit floor. CPG and grocery attendance was light, and the presentation topics focused on the large retail media and commerce media networks, with little to no mention of the fast-moving consumer goods sector.
