Considered the third wave of digital advertising, Retail Media is a strategy that uses consumer shopping behavior data as the basis for creating personalized and effective campaigns that truly impact the audience interested in the products in question. This trend has proven to be a great opportunity for CPG (Consumer Packaged Goods) industries. This is because the consumer goods segment benefits from regular and frequent purchases, advantages for industries that invest in advertising strategies and aim to increase their sales.
To give you an idea, according to a study by the Boston Consulting Group (BCG), by using Retail Media, CPGs can achieve an ad ROI (Return on Investment) 3 to 6 times higher. And there's more.
Trends Driving Retail Media for CPGs Four major trends are enabling the growth of retail media in CPG companies. They are:
- Transformation in e-commerce Faced with changes in consumption habits caused by the pandemic, e-commerce grew 10 years in just 6 months. During this period, valuable information about customer behavior and purchase intentions was generated, thus ensuring privileged data and insights for retailers.
- Rise of first-party data and insights More than 50% of retailers expect to work with or are already working with Retail Media. This allows proprietary information about consumers to become more accessible and actionable for CPGs, enabling brands to target and impact specific consumers.
- Recognition of the value of data generated by Retail Media 20% of brands rate insights into shopper behavior as the main opportunity offered by retail media. As CPGs seek data-driven insights, the retail media market will grow.
- High return on ad spend (ROAS) With a potential of 3x to 5x ROAS, it is essential that CPGs develop strategies to invest part of their marketing budget in Retail Media.
Benefits of Retail Media for CPGs The main market trend in recent times, Retail Media has presented numerous opportunities and benefits for CPG industries, such as:
Growth and efficiency Through proprietary consumer data, Retail Media generates better ROI, thus closing the complete cycle of activation and measurement of results at the SKU level, which consequently drives growth and improves ROAS for CPGs.
Audience discovery and insights Through a rich base of first-party data complemented with closed-loop information to drive segmentation and personalization, retail media allows the discovery of new audiences and data that will be useful to reshape data-driven marketing approaches.
Product and assortment strategy Provides actionable insights about who buys your product and what they bought. With detailed data about their audience, CPGs can make more accurate and precise decisions.
Attribution and measurement Allows for better attribution to connect each impression to an actual transaction at the SKU level, offering precise measurements directly linked to business results.
Retail Media in Practice: Onsite and Offsite Applications In Retail Media, purchase data from channels such as e-commerce, apps, and physical stores can—and should—be used to build segmented and personalized campaigns to impact the right consumer and increase the chances of conversion.