Revenue Growth Management (RGM) is proving to be a crucial strategy for consumer products companies looking to leverage complex tactics like trade promotion, shopper marketing, customer profitability, and retail media. As RGM becomes increasingly central to customer engagement, retail media and shopper teams need a seat at the table to ensure a holistic view of all the levers that CP companies can and are expected to deliver within a given retailer. Retail media can be used to boost customer profitability via upselling and cross-selling, customer retention, and personalized offers based on purchase history. In this piece, we outline considerations for incorporating retail media into your RGM strategy. 

Aligning Retail Media, Shopper Marketing, and Trade Promotion Strategies 

Two of the most common questions CP firms want answered are, “How should I spend my next dollar?” and “Should I invest in trade, shopper, or retail media to produce the largest marginal return?”  

The real question, however, is “What goal are you trying to achieve with that additional dollar?” 

Is your company looking to:  

• Increase sales? 
• Build brand loyalty? 
• Improve brand or product awareness? 
• Drive consumer engagement?

Thinking through the specific objectives and defining what success looks like will help you to build different scenarios, diagram different impacts, and ultimately choose the right path. To get closer to an answer, your retail media, shopper marketing, and trade promotion strategies must be organized, clearly defined, and orchestrated across functions within the organization.  

Risks to Watch Out for in Retail Media 

Retail media is not only required by many key retailers today but can also be a key promotional method for CP companies when deployed strategically. Managing the risk that retail media can present is key to unlocking its full capabilities. Here are some key risks to watch out for: 

Measurement & Accountability  

In contrast to trade analytics, which can be straightforward, retail media can be challenging to analyze given the many different tactics deployed and variations in tools for measurement.  Measurement of a sponsored search campaign will look very different from a banner ad placement. Expertise in these areas of media measurement is essential for the retail media team to ensure a strong return on investment and actionable insights from the data. 

Rinse & Repeat Mindset 

Organizations need to develop processes, structures, and systems to support decision-making around retail media, just as they do a trade budget to ensure that ROI justifies the expense in this ever-changing space. The same “rinse and repeat” mindset that exists within trade promotion is also present here, with retailers expecting a certain amount of participation annually from their vendors. Retailers are quickly evolving in this area, and CP organizations’ tactics need to evolve with them.  

Overspending  

Without thorough measurements and post-event analytics, there’s a real risk of overspending on retail media tactics. To prevent overspending, ROI and ROAS (Return on Ad Spend) should be established and should inform decision-making on executing events. CP companies should be careful not just to execute events based on retailer asks but also to consider their own sales goals, projections, and measurements. 

Reacting to Retailer Requests 

Retailers are going to continue to ask for more and more participation and dollars from brands.  Joint business planning must include retail media. Develop expertise and muscle in this area to help sales teams make effective plans and decisions, as well as to negotiate mutually beneficial plans that support your products.   

Looking Ahead: Incorporating Retail Media into your RGM Strategy 

Retail media is a crucial tactic that needs to be aligned with the RGM framework. The importance of retail media will continue to grow in years to come, and it cannot operate in a silo. It will become more and more crucial to integrate with RGM as funding for retail media increases.

If you’re looking for guidance on how to build your retail media strategy, set up the correct organizational structure, and integrate retail media into your RGM strategy, contact our Sales and Marketing consulting experts today.  

Contributions from Meg Longwell