CPG Growth Strategies for 2023 – How to Win with Real-Time Solutions
To respond to today’s value-driven shopper mindset, in 2023 CPG marketers and retailers should take advantage of strategies that strengthen consumer connections and offer real-time solutions.
Our brand, retail and agency partners tell us they’re looking for ways to be more nimble and target shoppers more precisely across media channels. In this ever-evolving economy we predict they’ll lean into these five ways to accelerate growth in 2023.
1. Find Your Connected TV Sweet Spot
Connected TV (CTV) ad spending will continue to accelerate at the expense of other channels—especially linear TV and social media. Industry reports project that the CTV ad market will grow 14%, more than twice the estimated growth of total ad spending†. Why the shift? Scale and personalization.
Eighty-seven percent of US adults own at least one internet-connected device± and nearly half watch TV/video content on CTV daily. In July, eMarketerˆ reported that US streaming TV viewership eclipsed cable TV for the first time YOY, citing more inventory, precision marketing, and more sophisticated in-flight measurement techniques as top reasons for the shift.
In 2023 we predict more marketers will take advantage of this scale. Ad Ageº reports marketers are moving beyond experimentation, using CTV to tailor targeting strategies to achieve specific brand goals.
By rebalancing linear and connected TV budgets, brands can simultaneously continue to build brand awareness and track performance through detailed analytics that go beyond targeting a shopper’s location, interests, and behaviors. CTV also gives brands and retailers the opportunity to measure across multiple devices and digital channels, including Retail Media Networks (RMNs).
Next move: To find your CTV sweet spot, don’t simply mimic your linear TV buys. Instead, target your most valuable shoppers on CTV and make your ad budget work harder by controlling reach and frequency at the household level. Take advantage of real-time measurement and optimize CTV offers to drive shoppers along the path to purchase with advanced TV solutions.
2. Look at Shopper Marketing with Fresh Perspective
As inflation took root in 2022, Catalina predicted The Great Loyalty Rebellion¨. In 2023, higher prices continue to plague many grocery categories and loyalty has taken a hit. In response to price hikes and smaller wallets, consumers have adopted more value-conscious habits, including buying more retailer private brands. The Wall St. Journal˜ noted this January that the US Federal Reserve “worries consumers will expect inflation to stay high and build it into their behavior.” Our clients tell us they will respond by investing in more precise targeting that clearly communicates value and use shopper marketing to drive sales growth.
Once focused primarily on the in-store experience, shopper marketing has expanded to put the consumer at the center of an omni-channel experience because shoppers who limit themselves to only in-store purchases tend to spend more and be more loyal and prolific.¦ Shopper Marketing also addresses the growing influence of Retail Media Networks and how to best fit them into the marketing mix.
For Caress beauty products,¬ Catalina took an omni-channel approach to drive penetration and sales in a category known for heavy brand switching. The digital and OOH media campaign drove a 29.7% overall sales lift, and sales increased 13% in stores with on-premise placements versus stores without it. Additionally, 30% of purchasers were new to the brand.
Next move: Turn to Shopper Marketing experts to gather actionable real-time, deterministic insights and improve the overall quality of your data. Use it to understand media consumption habits and the nuanced behaviors of your most valuable shoppers.
3. Use Both Digital and In-Store Incentives to Reach Every Shopper
Shoppers of all ages and socio-economic levels are looking for value, but not all shoppers use eCommerce platforms or digital coupons for grocery purchases. You may be surprised that 34% of digitally engaged millennials shop exclusively in-store.ˆˆ
When it comes to incentives and offers - whether paper or digital - coupons significantly impact shopper satisfaction, regardless of demographics. Shoppers who use coupons are 33% more likely to be highly satisfied with their shopping experience, according to the 2023 Global Digital Shopping Index.° Nearly every shopper (93%) says they use paper coupons and 75% use digital ones.
But if you deliver digital-only solutions, you’ll be ignoring a significant share of shoppers. There continues to be a sizeable number of non-digitally engaged shoppers: About 15% of US households don’t own a smartphone§ (F) and as many as 100 million†† (F) can’t afford or don’t have easy access to broadband internet connections. In this economically challenging environment, make sure you’re giving equal access to offers and incentives.
Next move: Optimize your omni-channel marketing and media activation strategy so that you can deliver 1:1 personalized, meaningful value to all your shoppers where and when they want to buy – online and in-store.
4. Take Advantage of the Next Generation of Personalization
The pandemic accelerated the shift to buying groceries online or using a mobile app. By 2021, major retailers like Target, CVS and Walgreens announced major shifts from print to digital circulars.˜˜ This is creating an opportunity for mass personalization and 1:1 targeting. Now, retailers can personalize content and offers to the needs of a specific shopper. Using dynamic content, you can expose consumers to items you know they will like and also reward them for shopping in-store.
Insights on shopper preferences can extend beyond loyalty data and include a consumer’s behavior outside a retailer’s four walls. They can deliver tailored digital offers that leverage third-party data as well their own, and migrate offers from a personalized digital circular from desktop and mobile to CTV and OOH. Retailers can also extend reach by mirroring digital offers in-store.
Next move: Look for cost-effective ways to engage loyal shoppers and acquire new ones with maximum media performance. Deliver the most relevant deals, personalized to each shopper, and reach them at home, on the go, and throughout the week.
5. Measure Twice, Optimize Always
Fine-tuning their full-funnel media investment will be a top priority for marketers this year, according to a recent Forrester Research Study¦¦ but respondents acknowledged that it will be extremely challenging to execute in the current economic environment.
There’s some industry skepticism about turning to digital attribution models to guide them. Les Binet, an expert on modeling and marketing effectiveness, argues that they are only good for short-term results and fail to accurately measure incrementality.÷ He points to Meta and Google’s move away from these models because they say they over-estimate the relative effectiveness of direct response channels and underestimate the effect of brand-building media.
But this argument doesn’t take into account the growing granularity of in-store shopper purchase data that links to behavior all along the path to purchase. Even with increased consumer privacy controls, marketers and retailers can measure and optimize in real-time all the components of a campaign – from creative to channel to offer.
Next move: Measure often and optimize always. Use the granular insights available to you to rebuild brand loyalty with value-conscious consumers. Invest in more testing, scaling, and leveraging omni-channel delivery and multi-touch attribution across brands. Retailers should also lean into these strategies as they look to prove the impact of their RMN’s.
To learn more about how to apply these strategies to your 2023 growth goals, contact firstname.lastname@example.org.
†OnAudience, December 2022
±Madhive, November 2022
ˆeMarketer, US CTV Ad Spending, 2020-26
ºAd Age, December 2022
¨Catalina 2022 Ultimate Pricing & Promotion Inflation Guide
˜WSJ, January 2023
¦Progressive Grocer, June 2021
¬Catalina Case Study, 2022
ˆˆPYMNTS, The Connected Economy Monthly Report, January 2023
°Global Digital Shopping Index, January 2023
§Pew Research Center, 2022
††FCC, Broadband Progress Report, 2022
˜˜Retail Wire, March 2022
¦¦Forrester Research, March 2022
÷Les Binet, January 2023