Retail grocery has changed a lot over the last couple of years and many brands are struggling to keep pace. As the industry continues to evolve, how can CPG brands standout? Where should they invest their marketing dollars? How can brands measure the impact of their investment?
We cover all this and more in our Retail Marketing Strategy Guide.
What is Retail Marketing?
Here’s how Amazon, one of the largest retailers in the world, defines retail marketing:
“Retail marketing refers to the advertising and distribution of your products to your customers. Retail marketing can include digital advertising, in-store advertising, or both. Retail marketing is any form of marketing that helps customers find the right products for them.”
While that’s a decent explanation for the textbooks, it’s far too vague to build a strategy around. To better understand the concept, let’s look at it through the lens of CPG retail grocery. Specifically, let’s examine two of retail marketing’s defining characteristics:
- Retail marketing takes place within a retail ecosystem.
- Retail marketing is performance oriented.
The Retail Ecosystem
As the name implies, retail marketing takes place at retail. But where exactly is retail? Ten years ago your answer might have been, “inside a grocery store.” But today, the lines are blurred – consumers can now shop anywhere, anytime, across any number of shoppable touchpoints.
Throughout this blog we’ll refer to this evolving landscape as the retail ecosystem. As it relates to CPG brands, we’ll define it this way:
The Retail Ecosystem is the network of platforms and geographies your target customer engages with as they shop.
For example, let’s say you have distribution in 800 Walmart stores. Here, your retail ecosystem would include:
- The 800 Walmart locations that sell your product and the surrounding areas. Keep in mind that most consumers only travel about 8 minutes from home for groceries (Report).
- The platforms your target customer engages with during their buyer’s journey (i.e., Walmart Connect, Instacart, Ibotta, social media, etc.).
Why is this important to understand? The short answer is proximity to purchase. The closer you can advertise to purchase, the higher your chances of conversion. It’s why Walmart Connect is more effective at driving Walmart sales compared to a geo targeted social media campaign.
How to Measure Retail Marketing Success
Retail Marketing is performance marketing. Because of its proximity to purchase, greater scrutiny is given to return on investment (ROI) compared to other forms of marketing / advertising.
As the grocery industry continues to evolve and retailer owned media platforms like Walmart Connect gain momentum, the need to measure and optimize performance with data-driven insights will become increasingly important.
Ultimately, how you measure and interpret performance is based on your individual goals. But to get you started, here’s a couple of things to consider when creating a strategy:
Efficiency of Spend
CPG retail is a numbers game and margins matter – especially when it comes to marketing. Metrics like return on ad spend (ROAS) can help you understand the impact your ad dollars have on revenue. The more bang for your buck, the better.
Establish Trend Lines
CPGs are fast-moving goods that are sold quickly at relatively low cost. Variables like seasonality, competition, distribution, etc. can make it difficult to measure performance at any one point. That’s why it’s important to look at performance over time – similar to how you’d evaluate a stock portfolio.
Compare Against Benchmarks
Because there’s so much variability in CPG retail, it’s good to compare performance against existing benchmarks. For instance, you can / should compare sales velocity year-over-year (YOY) for each retail partner. Contrasting these data sets can help you evaluate the effectiveness of your marketing efforts (among other things).
Whatever the approach, we suggest stitching together as many data points as possible from across marketing and sales to create a comprehensive picture of performance. Make sure to share this information across your organization to empower your team’s decision making.
Best-Fit Retail Marketing Tactics for CPG Brands
Within any given retail ecosystem, there are A LOT of ways to engage your target shopper. As the industry continues to evolve it’s important to do your research before each campaign – new tactics pop up all the time. But at a high level, there are three basic categories to consider:
When it comes to retail grocery, in-store tactics generally consist of packaging, POP displays & visual merchandising, sampling activations and store level couponing.
Of all the tactics to consider, store level marketing is the most logistically complex. The main reason for this is the need to align campaigns with a retailer’s buying / selling cycle.
Retail Media Networks
Within these platforms, brands can buy ad inventory that ranges from search and display ads to in-store TVs and point-of-purchase screens.
3rd Party Providers
While most retailers own and operate their retail media network, many choose to supplement (or outsource completely) their platforms with 3rd party providers.
A well-known example of a 3rd party provider would be Ibotta, which allows brands to offer rebates to consumers across multiple retail banners.
Within this category we’ll also include social media because of its ability to tightly target consumers at or near a point of purchase.
To create an effective retail marketing strategy, we suggest employing tactics from all three categories simultaneously. This ensures you cast as wide a net as possible to attract, engage, and convert consumers across the retail ecosystem.
The Account-by-Account Approach to Retail Marketing
Before we jump into strategy creation, let’s address one of the more complicated aspects of retail marketing: localizing a brand message.
Most CPG brands have multiple SKUs with distribution across multiple retail banners. Every retailer is a little different, each with varied timelines, geographies, and scale. This complexity makes it difficult to connect awareness level messaging with lower funnel executions.
The result? An incomplete and inconsistent marketing strategy that will fail to resonate with shoppers and can leave money on the table.
To overcome this hurdle, CPGs must solve the logistics of creating and delivering customized messaging at scale.
Here’s some best practices based on our 20+ years in retail:
- Organize your efforts into an account-by-account approach that supports each product retailer on an individual basis.
- Familiarize yourself with the latest and greatest shopper marketing tactics and platforms.
- Create detailed reference guides for all accounts / programs underway to keep things on-time and on-budget.
- Align your marketing & sales teams and develop a strong reporting cadence.
- Prioritize file and data management to facilitate creative needs and reporting.
At the end of the day, effective bottom-of-funnel CPG marketing is about strategy, organization, and timely execution.
Creating a Retail Marketing Strategy for Your CPG Brand
Here’s a quick summary of what we’ve covered so far:
Retail marketing is a form of performance marketing that takes place within a retail ecosystem. To stand out with shoppers, CPG brands must deliver customized relevance at scale, using tactics like in-store displays, retail media networks, and 3rd party providers.
With that in mind, let’s look at a step-by-step approach to creating an effective retail marketing strategy:
Define your Buyer Persona
While it may sound somewhat elementary, defining and refining your buyer persona over time is crucial to success in retail today.
Like your North Star, a deep understanding of your target shopper can help you navigate the evolving array of shoppable platforms and consumer touchpoints to identify best-fit opportunities for your brand.
Map Your Customer Journey
Defining who your customer is, is just as important as mapping the path they take to purchase.
Use your buyer’s persona to create a user journey map: a visual and narrative representation of the customer’s entire experience with your brand.
This tool is instrumental in understanding your customer’s motivations, needs, desires and pain points at every interaction stage with your brand.
Establish a Budget
There are many unique and creative ways to engage your target shopper within a retail ecosystem. However, the tactics and overall scope of your campaign will be determined by your budget.
Here are some of the key costs and considerations of a multichannel shopper marketing campaign.
Establishing benchmarks and setting goals is an often overlooked aspect of campaign creation. Although every brand is different, we suggest setting multiple goals across your business that include:
Short-Term: Performance over a set period of time (i.e., month-over-month)
Long-Term: Using data to establish long-term trend lines.
Marketing KPIs: Metrics like click-through-rate (CTR), social engagement, page views, etc.
Sales KPIs: Metrics like return-on-ad-spend (ROAS), unit volume, unit velocity, etc.
Critical to this process is sharing these goals (and subsequent performance analysis) with your internal and external (i.e. agency partners) teams.
Craft Your Brand Message
Whether you’re launching a new product or supporting a seasonal push, you need a go-to-market message that resonates with consumers. But in today’s crowded and competitive retail environment, how can you set yourself apart?
To be blunt, most shoppers don’t care about your brand(ing), they care about how it can benefit them. So if you want to win favor with your target shopper, your message must be benefit-driven.
Here are 3 ways to improve your go-to-market message:
From price promotions to sweepstakes, one of the most effective ways to stand out in retail is by running a consumer promotion. Here’s 10 ways to create engaging consumer promotions.
Brands can offer added value in a variety of forms – think along the lines of creating helpful content, providing exceptional customer service, or supporting a charitable organization.
A 2021 study by Microsoft found that the human attention span has dropped to eight seconds – shrinking nearly 25% in the past few years. Since the average attention span is now shorter than ever before, direct and concise messaging is essential.
Map Out Your Media
Armed with a clear understanding of your buyer, your budget, and your go-to-market message, you can now turn to media planning and placement.
There are a lot of options when it comes to media – POP displays, digital display ads, search, social, OOH, etc. But to get you started, here’s a couple things to consider:
Understand minimum costs for various placements
With some ad types, like social media, you set your own budget. With other media types, like Add-To-Cart ads, you may be starting at $50,000. Understanding these minimums will help you determine what options are available within your budget.
When looking at your annual media budget, you don’t want all your eggs in one basket. Not only does that narrow your reach, but it also increases risk. If a platform has technical errors or an ad isn’t performing, it’s helpful to have a backup.
Consider how different platforms or media types will reach different audiences, address different points of the buyer’s journey, and accomplish different objectives.
Find a balance – don’t jump into 5 platforms if that means each one will have a tiny budget.
Consider scale + timing per campaign
How many stores are you trying to support? How large is the geographic area? Over what amount of time is your campaign running?
All of these factors will affect the saturation of your ad spend. A few impressions per store per day may not be enough to move the needle.
Use results estimates when available, or lean on your vendor reps to assess.
To improve saturation, you can increase your budget, narrow your targeting, or shorten your timeline.
Test. Refine. Repeat.
Many have compared today’s retail environment to the Wild West, and for good reason. The grocery industry is in a constant state of flux as retailers and brands look for ways to meet the needs / expectations of today’s consumers.
The good news is that every campaign is a chance to get better. With more data available to brands than ever before, each campaign is an opportunity to reﬁne how you connect with your audience and build a stronger, more direct line of communication with your shoppers.
Hit the Easy Button
Retail marketing is complicated, partnering with the right experts shouldn’t be. At Cliffedge Marketing, we make it easy to bring campaigns to life quickly and easily – while staying true to your campaign budget.
With a strategic approach and a keen eye on your bottom line, we’ll help you navigate the multichannel landscape and achieve your retail brand goals one perfectly executed campaign at a time. Get started today with a quick chat to learn more about our unique approach.