Stephen McGowan, RVP of shopper activation & strategic partnerships at Mondelez International, alongside Yolanda Angulo, director of customer marketing at the CPG giant, discussed the convergence of national and shopper investments and how Mondelez has adopted a “test and learn” mindset at the Path to Purchase Institute’s Retail Media in Action event, which took place Oct. 12-13.
McGowan, a 2020 inductee of the Path to Purchase Institute Hall of Fame, recently chatted with Path to Purchase IQ about the rise in retail media, digital commerce and online shopping.
P2PI: Given the rapid shift in consumer behavior and rise in digital commerce, how would you say retail media has evolved as a byproduct of that and become a more strategic shopper marketing tool? McGowan: Retail media and digital marketing has become a very important tool in the marketing toolbox. We have seen digitally influenced sales jump from 49% to 63% of all sales during the COVID-19 pandemic. [See the final question below to learn where Mondelez gets its information.] We have seen the growth in e-commerce grocery sales accelerate by 10 years. We have seen retail media networks launch at most major retailers over the past few years. Retail media networks’ product roadmap and growth in offerings have accelerated because of the market changes, commerce pressure and shopper demand. Retail media has become a much more valuable strategic tool that has enabled a new means to reach and interact with a specific targeted set of shoppers. And it provides the ability to measure how effective this messaging and retargeting efforts are by providing closed loop sales attribution. The ability to target and personalize messaging to specific shoppers and to see the results of that targeting has not been available previously. The benefits of first-party data are three-fold: high quality, relevant and differentiating. It also allows marketers the ability to better understand consumer behavior, create tighter segments and understand more trends. Lastly, it will allow for increased tailoring of relevant messaging to the right consumers, though there is a little catching up to do to be able to match the accelerated consumer behavior demands.
P2PI: How does Mondelez distinguish itself from other CPGs who focus on retail media? McGowan: At Mondelez we are passionate about driving long-term sustainable growth with our respective partners. We want to develop strategic relationships that are based on transparency and collaboration and to be our customers’ indispensable partner. To secure that with customers requires a level of partnership, collaboration and strategic thinking that we feel we bring to the table. Therefore, we try to have holistic conversations about how best to mutually drive our respective businesses. Retail media is an important piece of that conversation, but it is not the only piece. We focus on a multi-level joint business plan that includes everything from sales, margin, service, share, category growth and marketing investment, which would include retail media. The goal is to break down functional silos within our organization and across respective partners.
P2PI: How should CPGs and shopper marketers evaluate new retailer media platforms? What's most important? McGowan: Retailer media platforms are unique in terms of the space they play in. Some would say that retail media falls somewhere between traditional brand-awareness media and lower-funnel shopper marketing tactics. The retailer media networks would argue that their offerings can deliver on both objectives (awareness and conversion), and they have something that the publishers do not: first-party data. When we look at retail media, we evaluate it based on our objectives. If the objective of a media is to drive awareness, then we should compare it to other awareness tactics. Similarly, if the objective is to drive conversion, then we should compare other conversion tactics.
Ultimately, we are looking at the incremental ROI that any marketing spend is delivering, and more importantly, we are helping to drive incremental category sales to our retail partners. We want to be able to measure the spend against other potential tactics, including awareness media, retail media, shopper marketing, e-commerce tactics, consumer promotions, public relations, etc. The access to sales data/measurement and understanding the dynamics of specific shopper sets and their sales for each media program is a differentiator. This can help us understand the role it can play in the overall marketing mix.
P2PI: What role do you think retail media will play in 2022 and beyond? McGowan: Retail media will play a huge role. Retail media fills a void. The evolving consumer privacy standards driven by the government and tech companies impacting third-party browser cookies are having a large impact on traditional digital marketing tools. It will be increasingly difficult to communicate with consumers in personalized ways and gain their attention. Retailers’ ability to access first-party data and “close the loop” by identifying those who make a purchase after seeing an ad makes it a compelling new channel. Currently, about 20% of digital spend is on retail media. It is estimated that will grow to about 45% by 2025. This is a consistent phenomenon that occurred in Southeast Asia.
P2PI: How do you stay informed on the retail media space? McGowan: The first place where we at Mondelez obtain information is directly from various retail media networks. In addition, there are a lot of great external resources in the marketplace (Boston Consulting Group, Goldman Sachs, eMarketer, Kantar, Cleveland Consulting, Nielsen and IRI). Lastly, there are a lot of great thinkers in this space that I follow, like Jason Goldberg, Don Brett, April Carlisle, Ethan Goodman, Francesca Hahn and the CPG guys podcast.