Why Retail Media Needs to Be Part of Your Growth Strategy

February 6, 2024

In the complex world of brand marketing, understanding the fundamental principles that drive brand growth is essential for any advertiser looking to increase market penetration and consumer base. Central to this understanding are the 95-5 rule, the 60-40 rule, and the concept of mental availability, each playing a pivotal role in crafting strategies that propel brands forward. As we delve into these principles, we also explore how Retail Media Networks in physical spaces serve as a crucial tool in the advertiser's arsenal, especially for short-term conversion efforts.

The 95-5 Rule: Broadening the Consumer Base

The 95-5 rule posits that most of a brand’s sales come from a large pool of light or non-regular buyers, rather than a small core of heavy users. This insight challenges brands to focus on broadening their consumer base as a primary growth strategy. Retail Media Networks in physical stores offer a unique opportunity to do just this, by placing brand messages directly in the path of a diverse array of shoppers. These networks enable brands to capture the attention of potential new consumers at a critical point in their purchasing journey, thereby increasing the likelihood of trial and adoption.

The 60-40 Rule: Balancing Brand Building and Sales Activation

The 60-40 rule guides the optimal allocation of marketing spend between long-term brand building and short-term sales activation, with a recommended split favoring brand building. However, in the context of physical Retail Media Networks, there’s an opportunity to blend these objectives more seamlessly. While Retail Media Networks can be used for immediate sales activation through targeted promotions and ads, they also contribute to long-term brand building by enhancing mental availability and reinforcing brand presence in the retail environment. This dual impact makes Retail Media Networks an efficient tool in the marketer’s mix, supporting both immediate conversion goals and sustained brand growth.

Mental Availability: Making the Brand a Consumer’s First Thought

Mental availability refers to the likelihood of a brand coming to mind in a buying situation. It’s a critical component of brand growth, as it increases the chances of a brand being considered and chosen by consumers. Retail Media Networks enhance mental availability by ensuring that brand messages are visible and engaging in physical retail spaces where buying decisions are made. By strategically placing ads that resonate with the shopping context and consumer needs, brands can stay top of mind, thereby increasing the chance of being selected over competitors.

Retail Media Networks: A Strategic Tool for Short-Term Conversions

While the principles of brand growth emphasize the importance of reaching a broad audience and building long-term equity, there’s also a need for strategies that deliver immediate results. This is where Retail Media Networks in physical stores shine. They allow advertisers to implement targeted campaigns that can influence shoppers’ decisions at the point of sale. Whether it’s highlighting a new product, offering a limited-time promotion, or simply reinforcing brand messaging, Retail Media Networks provide a direct channel to engage consumers and drive short-term sales.

Furthermore, the data collected from these networks can offer invaluable insights into consumer behavior, allowing brands to refine their strategies in real-time and achieve more efficient market penetration. By leveraging the immediacy and contextuality of Retail Media Networks, advertisers can enact strategies that not only contribute to immediate sales uplift but also feed into the larger objectives of building brand salience and expanding the consumer base.

Understanding the dynamics of brand growth through the lens of the 95-5 rule, the 60-40 rule and the concept of mental availability offers a strategic foundation for advertisers. Retail Media Networks in physical spaces emerge as a powerful tool within this framework, uniquely positioned to drive short-term conversion efforts while also supporting broader goals of brand growth. As brands navigate the challenges of increasing penetration in competitive markets, the strategic integration of Retail Media Networks into the marketing mix can provide a critical edge, marrying the immediacy of sales activation with the enduring impact of brand building.

Contact us today if you want to know more about how we can help you take your first step within the retail media landscape.

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