Expert Column: Grocers as Media Outlets

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Expert Column: Grocers as Media Outlets

By David Buckingham, Aimia - 07/30/2015

Grocers across the country are well placed to take advantage of a sizeable business opportunity by exploiting their capacity to act as effective media outlets for CPG brands.

Simply by putting their existing customer analytics and communications assets to work more effectively – and then marketing these assets to CPGs – grocers have the ability to generate significant revenue for their business, while also helping to support their customers throughout their purchasing journey. It’s an opportunity ripe for the taking.

The Growth of Grocery Media

If we look back to the 1990s, the physical store defined the grocer and its brand. Today, however, that has completely changed. By harnessing great advances in media, technology and data management, grocers now have multiple ways in which they can interact with customers. We’re currently in the multichannel "age of the consumer."

Today, grocers own an extensive portfolio of communications channels, ranging from broadcast to one-to-one engagement, and including many forms of advertising, websites, social media, mobile apps, in-store experiences, direct mail, emails and coupons. Combined with their existing customer reach, this vastly increased number of touchpoints has given grocers the opportunity to become genuinely integrated media outlets unto themselves. Unfortunately, though, many haven’t acknowledged this capability or understood the opportunities that it creates, particularly with regard to CPGs.

A New Opportunity for CPGs

With millions of customers actively engaging daily with brands, grocers represent a unique channel through which CPGs can communicate with their own audiences. Unlike most media providers outside of the store, grocers can harness customer analytics that lead to actionable insights for CPG brands and can measure actual return on marketing investment by directly tying CPG marketing efforts back to the customer purchase decision.

Grocers can offer CPGs targeted impressions at all stages of the purchasing journey – from the original "zero moment of truth" (the planning stage) to the "first moment of truth" (the shopping stage) and "second moment of truth" (the enjoyment stage) – and it's well documented that the closer your communication gets to the purchasing decision, the better your chances of conversion.

Frankly, given how closely grocers work with CPGs to buy, ship and distribute product in their stores, we should be seeing this integrated media platform model across the board. Offering CPGs access to their integrated media platform unlocks new ways for grocers to commercialize their consumer insights and various points of activation, giving them a unique opportunity to thrive in today’s multichannel environment.

Nevertheless, only the biggest global players in the industry – the likes of Walmart in the States, and Sainsbury's and Carrefour in Europe – are currently making the most of this opportunity.

Making the Model Work

Why hasn’t the integrated media platform model caught on more widely?

From our experience, it can be necessary to tweak how companies think about this model to cement it into their core business practices. In many cases, it's clear that the people and tools are in place, but the processes aren't.

Grocers need help to understand how to make the model work for them. For example, this type of media model is almost always found within a grocer's marketing department, which is seen as a "cost center" to the wider business. But if a grocer approaches its media capabilities as a regular "category" to engage with CPGs to sell and promote – rather than a marketing exercise – then the dynamic switches.

Marketers are experts in how customers buy media, while category managers are experts in products as well as how customers buy those products. So grocers need to find a way to change their business processes to balance these skill sets. This can either involve moving this media model into the category manager's remit, which helps grocers more readily accept and package it appropriately to CPG partners, or giving the marketing department the power to actively build this model into an attractive business, but following the style of a category function.

Ultimately, the key to increasing the prevalence of this model is to change attitudes, facilitate a more collaborative relationship between grocer and CPG company, and help both grocer and CPG company clearly understand the opportunities this media model offers. If they understand that this is a business-positive, revenue-generating model, they'll do anything to exploit it.

Opportunity Knocks

For grocers, the integrated media platform model unlocks new ways to commercialize their unique customer assets while ensuring that their customers receive the clearest and best information throughout their purchasing journey. CPGs, meanwhile, can greatly improve the impact and efficiency of their marketing efforts at a time when consumers have vastly increased choice and are demanding more personalization to retain brand loyalty.

Grocers and CPGs really have a huge opportunity here, and the benefits to businesses and customers are clear – they just need some help understanding how to ensure the model works effectively.