BY MATT BEECH
BUSINESS DIRECTOR, SMP
Don’t mention Brexit. For all the recent doom and gloom, things are looking up for the food and drinks industry, according to a new study from Lloyds Bank – the first of its kind since the referendum result.
In-store competition is bound to heat up for food and drinks brands, as companies raise their growth forecasts and start planning for tens of thousands of new jobs. Retail media will become a crucial way to drive sales. The problem is, most brands just don’t get it.
We’re told in marketing today that one size no longer fits all, but this is yet to translate to retail media. Instead, brands have a two-pronged approach to buying retail media. Either they go for a standard media bundle, which can be very pricey, or they take what’s recommended by media sales teams that don’t always understand their client’s comprehensive needs.
Brands need to be smarter than that – and the following three tips outline how they can take steps in the right direction.
Get scientific with media selection
FMCG brands often assume retail media is hard to measure, but that’s simply no longer the case. They need to use data to better understand – and justify – why they are making specific investments.
From industry bodies like IGD, POPAI and TGI to mining apps and conducting proprietary research, there are boundless data sources to tap into. Marketers should cross-reference them with cost and reach of different media to assess which will be most effective.
Ideally, a wide range of different insights should be blended and backed up by control analysis (like in-store observation research) to form a comprehensive cost-efficiency score. This will help brands buy exactly the right media to influence specific shopper audiences depending on their buying intention at a given time.
A brand wanting to surprise shoppers with a new drink, for instance, should be splitting investment and introducing retail media at unexpected stages. To disrupt competitors, media should be wide-ranging and consistent across the shopper journey, from retailer mailings to fixtures to targeting at tills.
Red Bull’s “energy zones” at BP garages show a data-led approach in practice. Based on data and customer insight, Red Bull and BP identified an opportunity to drive sales at a time when energy drinks and snacks are, in theory, needed most by people on the move. Branded signposting draws customers to the energy product section when they’re in an alert shopping mode, while new Red Bull product variants alongside favourites entice sales and drive basket spend.
Bond with the retailer
Brands need to bridge the buyer-seller divide and get closer to retailers. The retail media landscape – and in-store environment – is usually controlled by strict guidelines and stakeholder input.
Brands that create a compelling argument that works for the retailer and its shoppers will generate more opportunities to flex their creative muscle.
Brand merchandising teams, for instance, should step outside the media centre and actively walk retailers through the point-of-sale. But it’s just as much about understanding what the retailer is trying to achieve, as trying to flog the brand vision. The relationship needs to be collaborative.
Asda’s Mighty Merchants initiative, which invites suppliers to pitch promotional ideas to senior Asda stakeholders, reveals how it can be done. The best submissions receive the full support of Asda’s head office and are brought to life with in-store activations. Suppliers that understand Asda’s objectives and merge them with their own will be much better positioned to make the cut. After all, the brand’s shopper is also the retailer’s shopper.
Think outside the retailer’s box
Brands traditionally divide retail media budgets automatically between in-store, online and above-the-line. Today, they need to disrupt this approach and find ways to engage shoppers that aren’t necessarily owned by the retailer.
Retail ad exchanges, for example, provide closed-loop marketing for brands that reaches shoppers while they’re browsing online, drives traffic and attributes it precisely to in-store sales. Brands can also invest in smart software that targets shoppers in a hyperlocal online environment to guide them towards nearby stores. Solutions like these are much more accountable than most media owner offerings (which are usually based on clicks) and therefore worthy of exploring.
As the food and drink industry becomes more buoyant, competition is only going to get more ferocious. Despite this, marketers will need to remain accountable for every penny spent for a while yet. Most recognise retail media has an important part to play, but they’re still not treating it like other marketing collateral. Brands need to adopt a smarter, scientific approach to media investments, blending lateral thinking with actual insight. Those that do will be in pole position to bag their share of the fortune.
© FoodBev Media Ltd 2019
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