Mind the personalisation gap: solving retail media's loyalty challenge
SAP Emarsys is a Business Reporter client
Retail media spend is surging, but consumer products brands need to convert that investment into lasting customer loyalty.
Retail media spend is booming. Consumer products giants are pouring billions of pounds into advertising on retailers' digital platforms to reach shoppers right where they browse and buy.
But while media spend soars, customer loyalty is stagnating. Our Global Consumer Products Engagement Report reveals the disconnect: consumers don't want more ads – they want meaningful, relevant engagement. It's time for consumer products (CP) brands to adapt their strategies or risk losing the customer loyalty they have worked so hard to build.
Retail media spend is projected to surpass $100 billion by 2026, according to McKinsey. Brands are shifting budget to retail media networks, encouraged by the benefits of digital ad campaigns that can reach consumers right when they can see a product they want to buy.
It's factors such as this – direct access to customers and in-the-moment product awareness – that have pushed up the cost of retail advertising as brands compete for premium placements. But your ad appearing at the right time doesn't mean it's making a real connection. Many brands are discovering that awareness alone isn't enough.
Awareness doesn't easily translate into valuable connections. SAP Emarsys recently surveyed over 750 senior marketing decision makers at enterprise-level CP businesses along with 14,000 consumers for the Global Consumer Products Engagement Report. We found that 69 per cent of CP marketers say it's becoming harder to engage meaningfully with customers.
We also found a growing personalisation gap – a chasm between brands' ability to deliver tailored customer engagement and what customers want to receive. Only a minority of CP marketers feel they excel at engaging customers and just 36 per cent believe their campaigns and content are effectively personalised. Worryingly, 63 per cent of CP consumers say they value highly personalised content, but 51 per cent say their experience with a brand does not feel personalised. So, while there's an elite group of marketers who are taking advantage of this desire for enhanced engagement, the rest are falling into the personalisation gap.
Call it ad fatigue or banner blindness – non-personalised, mass marketing approaches to retail media are no longer effective. Brands need to look for ways to connect with their customers more effectively.
Your data, your advantage
The starting point for connecting with customers should be data. Deep customer insights can help brands to maximise their retail media investments with more precise ad targeting. They can then extend these interactions seamlessly to power personalised engagements across other channels.
Some CP brands have started to break down silos, connect data, accelerate operations and engage customers more effectively. However, just 32 per cent of CP marketers say they have an established, connected data strategy; the rest are falling behind, struggling to integrate data sources, gain insights and turn data into meaningful customer connections.
But collecting this data – from insights into demographics to channel preferences to spending habits to purchase history – is a big ask. The majority of CP brands don't have a direct relationship with customers. Yet the need for it is clear.
Almost two thirds (65 per cent) of CP marketers say consumer behaviour is becoming harder to predict. This tracks with consumer attitudes to CP brands: 64 per cent of CP shoppers don't pay attention to the brands they're buying as long as a product meets their needs. And with the cost of living front of mind for many people, 60 per cent have switched to own-label alternatives as more affordable options.
SAP Emarsys helps brands turn every digital interaction into a meaningful data exchange – building trusted, first-party relationships through channels such as email, mobile apps and social media.
This digital transformation is possible and certainly worthwhile with the right tools and team in place. Because the customer has made a conscious, informed choice to entrust a brand with this first-party data, it's of higher quality, more relevant and ultimately more useful than data from third-party sources. It's also essential for complex tasks such as personalising customer engagements.
A good example here is global sweets company Ferrara, known for brands such as Jelly Belly, Nerds and Trolli. By using customer data solutions from SAP and SAP Emarsys, Ferrara can effectively collect and activate first-party and customer data to hit the sweet spot of delivering tailored experiences for its brand fans.
By activating this data across marketing, commerce and sales, businesses have the basis on which to create seamless customer journeys that build loyalty.
Maximising ROI: supercharge media strategies
That's not to say that CP brands shouldn't continue with their retail media strategies; there's still an important role for digital or in-store advertising and activations. However, with the pressure brands are under because of consumer brand loyalty – or rather the lack of it – they need to be smarter in their approach.
Businesses such as Criteo can help with this. Criteo helps brands drive targeted, data-driven ad placements through its commerce media platform. Using AI and data insights, brands can engage and convert customers with highly tailored ad experiences across digital platforms.
Integrating Criteo with SAP Emarsys enables consumer products brands to supercharge their retail media strategies by combining powerful ad tech with rich customer data. Brands can turn first-party data insights collected from interactions into personalised, high-impact campaigns on Criteo's network across desktop, tablet and mobile devices, ensuring that ads are seen by the right people, wherever and whenever they are shopping.
The result? Increased relevance, greater engagement and more loyal customers. It's a virtuous circle, as loyal customers are often more receptive to the targeted advertising messages they receive via retail media.
From clicks to customers for life
Inflation, supply chain disruptions, rising advertising costs: these are all contributing to increasing market uncertainty for consumer products brands. To survive, marketers must pivot from seeking short-term clicks and single transactions to building strong customer relationships. This shift means closing the personalisation gap and embracing new strategies to meet customer expectations, moving from transactional marketing to building long-term engagement.
Success depends on leveraging first-party data effectively to understand customer needs and behaviours as the foundation for creating personalised experiences that customers value.
Personalisation now means more than basic product recommendations but should instead deliver real-time, AI-driven and context-aware experiences to individuals on whatever channel a customer prefers to be. It requires consistent, relevant marketing interactions that build trust and loyalty over time.
The challenge consumer products brands face isn't retail media: it is how retail media is used for mass marketing. Brands must look beyond ad spend and focus on what really drives customer connections: personalised engagement. By building tailored approaches and engagement into their strategies, brands can close the personalisation gap and ensure that every pound spent contributes to loyalty and focuses on the right customers at the right moment.
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