The next big growth opportunity for CPGs? It’s back where we started: the physical store.
By Steve DeVore, Chief Creative Officer
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Retail media networks and the digital shelf get most of the attention in the Commerce space — rightfully so, since most estimates have retail media growing 20%+ annually and ecommerce sales increasing 8-10% each year. And among clients at Mars United, these two practices represent a substantial piece of the agency hours needed to support strategy, activation and reporting.
What’s interesting, though, is that almost 90% of all purchases across the food, drug, mass and club channels are still happening inside the traditional, brick-and-mortar format. So why aren’t we talking about the in-store experience more?
One reason: Well, us.
Commerce agencies have spent the last four years fighting the “in-store” or “shopper” stereotype, and planning, placing and optimizing retail media and ecommerce have helped accelerate that conversation. It has required new structures, new tech, new expertise and new ways of working, and has allowed agencies like Mars United to influence shoppers wherever and whenever shopping is happening. Which is everywhere, all the time. Texting product links to friends and family. Adding to cart as shoppers scan their pantry shelves. Deathscrolling social media.
There is no more prompting shoppers to purchase — the habitual consumption of information through a smartphone has placed consumers in a constant state of consideration, which makes conversion wide open for brands. The challenge is finding ways to connect with consumers in these highly competitive spaces that change beliefs and influence behavior. That’s where Commerce agencies have migrated to and now play an important role. That, coupled with the pressure of retailer budget commitments and brands wanting to ensure every dollar is working like two, makes it easy to see why retail media and ecommerce have been a focal point.
Another reason: Growth.
Ecommerce is growing at almost 4x the in-store rate, and growth is what so many CPG sales objectives are based on. In-store growth can be more difficult because the existing base is so large and new, so hidden consumers can be hard to find — but also because brands have less control in that environment. The physical shelf is driven by SKU expansion and incremental merchandising, which can require significant investment, whereas digital growth can be more easily influenced by tweaking targeting strategy or improving SEO. Plus, the ceiling for growth on retailer.com is much higher.
Those are two incredibly valid explanations as to why we should continue to focus our attention here. But that doesn’t mean in-store should take a back seat, particularly given that’s where most sales still happen. There continue to be opportunities to drive growth by breaking shoppers out of their trip autopilot and finding compelling ways to get them down the aisle, to enter a shopper’s consideration set and fuel purchase intent.
I think the next big pivot for commerce creative can actually be found in the past, meaning going back to the roots of Shopper Marketing. Placing more emphasis on creating influential brand experiences in-store (in parallel with ecommerce) that not only make shoppers want to buy but to actually evangelize that experience to their friends, family and social media platforms. As Marcus Collins said at Most Contagious New York in January, “People don’t share your brand with their friends because they love it. They are it because they love their friends.”
At Mars United, we’ve spent the past few months auditing what’s happening in this space and trends outside of it, as well as hosting discussions with some of the leading commerce opinion leaders to help craft our point of view. Rather than provide you with a recap of that, we’ve decided to try and apply it by taking this approach: “What if we were a CPG marketer? What would we do differently to focus more attention on the in-store experience?”
Here are 4 things to consider …
