How Local Grocers & Convenience Stores Can Modernize Their Marketing

Summary

MarTech Podcast ™ – Episode Summary

Title: How Local Grocers & Convenience Stores Can Modernize Their Marketing
Host: Benjamin Shapiro
Guest: Jared Luskin, Head of Partnerships at Bridge
Release Date: November 12, 2024

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Introduction

Benjamin Shapiro opens the episode by introducing Jared Luskin from Bridge, an identity resolution-based platform focusing on point-of-sale transactions for brick-and-mortar retailers and their Consumer Packaged Goods (CPG) partners. The topic centers on modernizing marketing strategies for local grocers and convenience stores through the effective use of technology and data.

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Double Down or Diversify: Loyalty Programs in Retail

Timestamp: 02:17 – 06:11

Discussion Points:

• Effectiveness of Loyalty Programs: Jared advocates for doubling down on loyalty programs, emphasizing their role in understanding and marketing to customers. He highlights the importance of accurate data collection, noting challenges like fake entries which can lead to "garbage in, garbage out" scenarios ([04:36] Benjamin Shapiro).

  Notable Quote:

  “Garbage in, garbage out. It can be challenging to have really accurate data in a loyalty program.”
  — Jared Luskin [03:34]

• Strategic Implementation: Benjamin underscores the necessity of analytics and attribution in loyalty programs to discern customer behavior and purchasing patterns. The conversation delves into how retailers can structure loyalty programs to maximize data accuracy and actionable insights.

Key Insights:

• Data Accuracy is Crucial: Ensuring that loyalty program data is reliable is foundational for deriving meaningful marketing insights.
• Actionable Data: Retailers must have the organizational capability to act on the collected data, whether it's for merchandising decisions or targeted marketing strategies.

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Role Play: Improving Margins for a Struggling Grocery Chain

Timestamp: 06:11 – 10:29

Discussion Points:

• Enhancing Customer Experience: Jared suggests investing in customer experience and strategic merchandising to drive shoppers toward higher-margin products. He mentions the growing interest in private label brands as a means to improve margins ([06:26]).

• Retail Media Networks as a Tool: Discussion on how retail media networks can act as a digital extension of traditional shelf space, allowing CPG partners to advertise within the store's digital channels. Jared clarifies that larger retailers use these networks to manage product placements without manipulating organic search results ([08:22]).

  Notable Quote:

  “Retail media networks are a really important opportunity to be thinking about in terms of improving margins.”
  — Jared Luskin [06:26]

• Ethical Considerations: Benjamin raises concerns about potential conflicts of interest if retailers influenced product rankings based on media spend. Jared counters by emphasizing that organic and paid listings are distinctly managed, maintaining fairness in product visibility.

Key Insights:

• Private Labels: Investing in private label brands can significantly enhance profit margins.
• Digital Shelf Management: Retail media networks offer a modern approach to product placement, akin to digital shelf space, without compromising the integrity of organic listings.

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Crystal Ball: Future Opportunities for CPG Companies

Timestamp: 10:29 – 15:48

Discussion Points:

• Opportunity in Convenience Stores: Jared identifies the fragmented landscape of convenience stores in the U.S. as a significant opportunity for CPG companies. With approximately 150,000 true convenience stores and high purchase frequency, there's immense potential for targeted marketing despite the current lack of consolidated data ([11:01]).

  Notable Quote:

  “The frequency of convenience store purchases is kind of off the charts.”
  — Jared Luskin [11:01]

• Data Aggregation Solutions: Highlighting Bridge's partnerships with POS hardware and software providers, Jared explains how aggregating data from independent convenience stores can unlock new marketing opportunities and insights.

• Targeting Precision: The shift from traditional persona-based marketing to data-driven targeting based on actual purchase behavior. Jared emphasizes that transaction data provides a more precise and actionable understanding of target audiences.

Key Insights:

• High-Frequency Purchases: Convenience stores have a higher purchase frequency, offering more touchpoints for CPG marketing.
• Data Integration: Solutions that aggregate data from fragmented markets can provide valuable insights and drive incremental sales.

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Takeaways for Non-CPG Marketers

Timestamp: 15:48 – 18:27

Discussion Points:

• Leveraging Purchase Data: Non-CPG marketers can utilize purchase behavior data to identify potential customers. For instance, targeting professionals who purchase specific snack brands can indicate preferences and lifestyle choices relevant to other products or services.

  Notable Quote:

  “You can start to hone in on more specificity... around who you are trying to market to.”
  — Jared Luskin [14:27]

• Enhanced Targeting and Measurement: The availability of detailed transaction data allows for more precise targeting and effective measurement of marketing campaigns, moving beyond broad demographic personas to actual consumer behavior.

Key Insights:

• Behavioral Signals: Purchase behavior serves as a robust signal for identifying target audiences, surpassing traditional digital footprint-based targeting.
• Cross-Industry Applications: Insights from CPG marketing can be applied across various industries to enhance targeting strategies and campaign effectiveness.

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Conclusion

Benjamin Shapiro wraps up the episode by highlighting the key insights from the conversation with Jared Luskin. He emphasizes the importance of data accuracy in loyalty programs, the potential of retail media networks to enhance margins, and the untapped opportunities within the convenience store sector for CPG marketers. Additionally, he points out the valuable takeaways for marketers outside the CPG space, particularly the benefit of leveraging purchase behavior data for more precise targeting.

For more information or to connect with Jared Luskin, listeners are directed to Bridge’s website (bridge.com) and the show notes for LinkedIn profiles and additional resources.

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Key Quotes

1. Jared Luskin on Data Accuracy:

   “Garbage in, garbage out. It can be challenging to have really accurate data in a loyalty program.”
   — [03:34]

2. Jared Luskin on Retail Media Networks:

   “Retail media networks are a really important opportunity to be thinking about in terms of improving margins.”
   — [06:26]

3. Jared Luskin on Purchase Frequency:

   “The frequency of convenience store purchases is kind of off the charts.”
   — [11:01]

4. Jared Luskin on Targeting Specificity:

   “You can start to hone in on more specificity... around who you are trying to market to.”
   — [14:27]

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Final Thoughts

This episode of the MarTech Podcast ™ provides valuable insights into how local grocers and convenience stores can harness technology and data-driven strategies to modernize their marketing efforts. By focusing on accurate loyalty programs, leveraging retail media networks, and tapping into the high-frequency purchase behavior of convenience store shoppers, retailers can drive significant business growth and enhance their competitive edge in the market.

For those interested in advancing their marketing strategies, the discussions offer actionable tips and highlight emerging opportunities in the evolving landscape of retail marketing technology.

Transcript

[Podcast Announcer]

The Martech Podcast is a proud member of the iHear Everything Podcast Network. Looking to launch or scale your podcast, iHear everything delivers podcast production, growth and monetization solutions that transform your words into profit. Ready to give your brand a voice? Then visit iheareverything.com.

[Benjamin Shapiro]

From advertising to software.

[Jared Luskin]

As a service to data across all.

[Benjamin Shapiro]

Of our programs and clients, we've seen a 55 to 65% open rate.

[Jared Luskin]

Getting brands authentically integrated into content performs better than TV advertising.

[Benjamin Shapiro]

Typical lifespan of an article is about 24 to 36 hours. If we're reaching out to the right person with the right message and a clear call to action, then it's just a matter of timing.

[Podcast Announcer]

Welcome to the Martech Podcast, a member of the I Hear Everything Podcast Network. In this podcast, you'll hear the stories of world class marketers that use technology to drive business results and achieve career success. Here's a host of the Martech Podcast. Benjamin Shapiro.

[Benjamin Shapiro]

Welcome to the Martech Podcast. I'm your host, Benjamin Shapiro and today we're going to discuss retail media networks. Joining us is Jared Luskin, who is the head of partnerships at Bridge, which is an identity resolution based platform that focuses on point of sale transactions for brick and mortar retailers and their CPG partners. Today we're going to talk about how local grocers and convenience stores can modernize their marketing. But before we get to today's interview, I want to tell you about what I'm listening to. Ever wanted to sit down to a candid conversation with marketing leaders from the world's biggest brands? The Current podcast is your chance. On the current podcast you'll find exclusive interviews with the experts and trendsetters who are on the front lines of digital advertising and they always leave the ad tech jargon at the door. So subscribe to the [e-mail] or anywhere you get your podcasts today. Jared welcome to the Martech Podcast.

[Jared Luskin]

Thanks Ben.

[Benjamin Shapiro]

We're going to start off with a segment we like to call Double down or Diversify. Should marketers at grocery stores and convenience stores be doubling down or diversifying from their loyalty rewards programs?

[Jared Luskin]

I think doubling down, I mean, I think loyalty programs are around for a reason. I think it's really important to be able to better understand your customers. It's really important to be able to market to those customers, especially when you've got some information about them and you can communicate them with them directly. I think the caveat there, as I said before, is you have to be really mindful of the expense of setting up a loyalty program, the adoption rates of those loyalty programs. In some cases the payback just isn't necessarily there, but it is driving loyalty. Whether you're a grocery or convenience store, an apparel store or big box store. Like driving loyalty is really important from a retail perspective.

[Benjamin Shapiro]

I think strategically loyalty is important. I think the dynamics of the program are different. And this comes down to mostly an analytics and attribution. Do you understand who is coming in and converting and are you able to harvest the data? Go into a little bit more detail there about how people can make their loyalty programs work. So it actually is something worth doubling down on.

[Jared Luskin]

I think it comes back to really setting it up in such a way that you really understand your shopper, your customer. You know, you see these loyalty programs out there, you see some of these in convenience stores where you punch your phone number in and you immediately get signed up for the loyalty program. I think sometimes those can be challenging because there is the phenomenon that I'm sure we're all used to, which is you put in some fake data, you put in a fake phone number or a fake name or a fake email address because you want that discount on the product you're buying at that moment in time. But it's really sort of garbage in, garbage out. Right? It can be challenging to have really accurate data in a loyalty program, especially with some of the instances we discussed before around the cashier who's got the loyalty card taped to her cash register. Me, using my mother in law's phone number. But it is the accuracy that I think is incredibly important there. So anything that retailers can do to ensure that accuracy, whether it's with the opt ins and getting some validation or verification back, anything you can do to make sure that that data is accurate has to be the foundation of that Garbage in, garbage out.

[Benjamin Shapiro]

It's got to be twofold. I understand the garbage in, garbage out. It's also drowning in data. And I think specifically of the grocery chains, convenience stores, like, I think it's different when you're running a loyalty and rewards program at a ice cream store where you've got limited skus or all the products are essentially the same. It doesn't matter what somebody likes vanilla or chocolate. It matters how often they come in as opposed to you're at a grocery store. There's a huge difference between somebody that buys razor blades, bourbons and bullets as opposed to somebody that's buying fingernail polish, hair nets and face moisturizer. How do you make sense of all of the Bits of data that you're getting through a loyalty program when you have so many skews? Am I making this up as a problem or do the retail media networks just solve that? If you've got thousands and thousands of.

[Jared Luskin]

SKUs, I think the retail media networks can help you solve that. I think it is, you know, it all comes back to whether it's accuracy of the data, garbage in, garbage out. But I think importantly, like you said, there are so many companies out there that are drowning in data. Data for data's sake is not super helpful. You've got to have a real plan and an organization set up to be able to action on that data. Whether it's making decisions on merchandising.

[Benjamin Shapiro]

Right.

[Jared Luskin]

What products are you going to carry? How are you going to price those products? Marketing decisions based on that as well. So if you don't have the organization and the resources in house to be able to really action upon that data, you're going to be, you're going to be stuck with a lot of data and not a lot of insight into what to do with it.

[Benjamin Shapiro]

All right, I want to move on and we're going to flip the script here. Do something that we like to call role play. And I want you to put on your hair and makeup and you're going to pretend to be the owner of a struggling grocery chain. What are you doing to improve your margins?

[Jared Luskin]

Well, it's probably a number of things and this is a role play. I'm certainly not the expert in this, but I think you look at what some of the more forward thinking chains are doing today, really investing in the customer experience, ensuring that you're trying to merchandise in the right way. So you're driving your shoppers to some of those higher margin products. I mean, I think we're seeing a big investment from a retailer perspective in private label brands because those are typically higher margin than carrying national brands. But again, I think given the thrust of this podcast, I think retail media networks are a really important opportunity to be thinking about in terms of improving margins. Grocery, retail in general, historically fairly slim margin business. But you can look at the public filings of some of these companies and these large companies that have retail media networks and you can see that it is much higher margin, if not incredibly high margin in terms of the products that they're able to sell. And again, going back to that collaboration with their CPG partners to be able to drive more purchases, right, drive more investment from consumers back into the store.

[Benjamin Shapiro]

I think of the retail media networks as akin to the digital version of selling shelf space. And I've never worked at a grocery or convenience store. But my assumption is that if you want that, I think it's called the end cap, you're either getting enough products sold or doing promotion or lowering your price so the items move off the shelf. Or are you just outright paying for the extra placement of promotion? That is essentially what a retail media network is. Not only because you're getting the advertising space so you're more present, you're building your brand, you're staying in front of your consumers. But also, aren't the grocery stores and convenience stores putting their thumb on the scale? Like, if you're going to be my media buyer, if you're going to buy my ad inventory, I'm going to give you some premium placements or just find other ways to help you sell your inventory so the conversions look better so you come back and buy my media.

[Jared Luskin]

I would almost flip it around. I think in a lot of cases, what you see with the larger retailers and therefore retail media networks, is a, and sort of almost like an obligation to invest in the retail media network in order to kind of carry those products or get great product placement on the shelves. I don't think they're necessarily putting their thumb on the scale in terms of like the measurement of the effect of the efficacy.

[Benjamin Shapiro]

I think I more mean the placement.

[Jared Luskin]

Yeah, I think it's more the opposite.

[Benjamin Shapiro]

Right.

[Jared Luskin]

Where you're getting retailers who are having obligations put on their CPG partners to invest in those retail media networks. Right. And Obviously those larger CPGs, they're the ones who are going to have the investment dollars to spend the budget to spend. They're going to be the ones who are typically going to get great product placement and shelf placement anyway because they are the biggest brands, the most popular brands from a consumer perspective.

[Benjamin Shapiro]

I guess I'm just saying if I'm an engineer at Walmart and I'm responsible for the retail media network, and maybe I know the person that is responsible for our algorithm that figures out where your products are placed. When somebody conducts a search, maybe I ask the person sitting next to me to build in a variable into the algorithm that takes into account what my media spend is and impacts what my rankings are, if all things are even, shouldn't we be promoting the people that are buying our media more than the people that aren't? Just seems like something that's logical.

[Jared Luskin]

I think it seems logical, but I would not suggest that those large retail media networks are doing something like that.

[Benjamin Shapiro]

Right.

[Jared Luskin]

I mean, I think it is. Clearly there is ad space sold for on site media and some of those big retailers websites, not unlike search advertising or programmatic advertising. As an advertiser, you're bidding. If you're willing to pay a higher price for that CPM or that cpc, you're going to get better placement of your ads at least. And I do think there's a pretty firm line drawn between what you would call like organic search listings and paid search listings. I don't think I would suggest that anybody is doing anything funny there in terms of those organic listings and bubbling up results based on investment levels. On the retail media side, it's just.

[Benjamin Shapiro]

One of those things I think about the alignment of incentives. And if I am working at the Amazons or the Walmarts and we're trying to drive more media sales, I want people to have more conversions and so influencing what is happening with the organic listings as a way to do that. Obviously not something I can prove, not something you can either. But let's just say I've said my piece and we'll move on. Our next segment we're going to call Crystal Ball. And what I want you to do is look into your crystal ball and tell me what you think is the biggest opportunity for CPG companies five years from now.

[Jared Luskin]

I will go a little shorter in I think it's opportunity probably three years out or maybe even closer in than that. I think one of the really interesting things from a retail media perspective and a retail data perspective is again, we've talked about the fact that there are a lot of these large retail media networks out there, right? Big box stores, et cetera. I think one of the areas that is kind of lacking from a consumer purchase data perspective today is convenience stores. It is a much more fragmented market. You've got in the US right around 150,000 convenience stores. Like true convenience stores, that number increases if you take into account some of the other small format stores that are out there. But you don't have this consolidation that you do have in the grocery space, especially with some of the mergers and acquisitions we've seen recently. So I think that is a spot for CPG companies to really be thinking about. Because while there are certainly a smaller number of products sold in those smaller format stores for obvious reasons, you got beverages, salty snacks, candy mint and gum, things like that. The frequency of convenience store purchases is kind of off the charts, right? You think about grocery store typical behavior. You're going in on Saturday, you're doing your weekly stock up convenience Stores, the average purchase frequency is more like five times a week on average. Some of those are a lot higher. So as a CPG marketer, you've got that many more opportunities to put your message in front of that convenience store shopper and change their behavior. Drive an incremental sale, drive an incremental trip. So I think that's one of those areas that we see a huge opportunity for CPGs to be thinking about given the fact that A there's not that much data out there today and B, just given the frequency of those purchases.

[Benjamin Shapiro]

Yeah, it's interesting that convenience store shoppers are at their convenience store. It makes sense. You go to the corner store for your milk and maybe your bag of Doritos every once in a while, depending on how old you are. But you're doing that on the regular. You're always there for something as opposed to you go to the grocery store once a week and you buy everything that you think you're going to need. There's an aggregation or disaggregation problem with convenience stores. 711 being the biggest chain. And I think they acquired. It's not Kwik E Mart, that's from the Simpsons. But there was another change that was Quickie Convenience or something like that. That was an acquisition. But there's also like Joe's convenience Store on the corner. How do you aggregate the demand outside of the sort of one conglomerate in the convenience space?

[Jared Luskin]

It's not easy to do. We at Ripple are pretty fortunate. We've got some great partnerships with POS hardware and software providers that are really well penetrated into the independent convenience store market. So we partner with National Retail Solutions, we partner with PDI Technologies and we are able to aggregate up a pretty significant number of those independent convenience stores, which again as I talked about, there's a general lack of convenience store data out there, especially as you think about those independent convenience stores. And today we've got nearly a third of all of the convenience stores in the US are part of the Ripple platform.

[Benjamin Shapiro]

There's this aggregation of demand for CPG marketers which you can buy through tools like Ripple, getting your regional media networks or Amazon and Walmart with your retail media networks. What are some other things that marketers that are not in CPG can take away from what's happening in the CPG space?

[Jared Luskin]

Well, I think it's really interesting too. I mean, we see usage of our audiences by non endemic advertisers as well. So I mean non CPGs looking at purchase data as an indicator of somebody that might be interested in buying their products, right? So you can look really interestingly at what are the products that people are buying and use that as a way to sort of think about that Persona. Are they a bargain shopper, Are they buying higher end sort of premium products? And think about how that translates out to other marketers that are not CPG companies. I mean, I think the other thing that's really interesting too is for a long time marketing has really been driven by this notion of Personas, right? My target market is men age 25 to 45, soccer moms, things like that. I think what the CPGs are now finding, now that the data is becoming sort of more available from like a targeting perspective, from measurement perspective, is you can be a lot more precise because it is not sort of building these models of who your ideal customers are, but you can actually see like what are these people buying. And the reality is when you're looking at purchase data, you are looking at people who, you know, have money, they are making actual purchases, right? And so you can start to hone in on more specificity, I think, around who you are trying to market to and who you're trying to target, as well as that backend measurement capability because you've got the actual transaction data to be able to see what somebody bought.

[Benjamin Shapiro]

You know, it's a really interesting idea that marketers that are not focused on CPG products can see still do their targeting based on purchase behavior based on other products. I am somebody that's trying to sell professional services to men 25 to 35. I might be buying, looking for people that are buying Mountain Dew and Doritos. And that's a good signal. We often are thinking about our targeting in terms of a digital footprint, a signal, something that we can grab onto that says somebody is in market. And often our purchase behavior is one of the best signals we can find. So that wraps up this episode of the Martech Podcast. Thanks for listening to my conversation with Jared Luskin, the head of platform and media partnerships at Bridge. If you'd like to get in touch with Jared, you can find a link to his LinkedIn profile in our show notes or you can visit his company's website, which is bridge.com it's B R I D G no E B R A D G Com. A special thanks to the current podcast for sponsoring today's interview. If you're looking for candid conversations with marketing leaders from the world's biggest brands, then give the current podcast a listen. On the current podcast, you'll find exclusive interviews with experts and trendsetters who are on the front lines of digital advertising, and they always leave the ad tech jargon at the door. So subscribe to the [e-mail] or anywhere you get your podcasts today. Just one more link in our show Notes I'd like to tell you about if you didn't have a chance to take notes while you were listening to this podcast, head over to martechpod.com where we have summaries of all of our episodes and contact information for our guests. Of course, you can always reach out on social media. Our handle is martechpod. On Twitter, Instagram and Facebook you can contact me directly. My handle on LinkedIn is benjshap. B E N J S H A P. You can also find full length videos and social clips on YouTube by searching for Martech Podcast. And if you haven't subscribed yet and you want a daily stream of marketing and technology knowledge in your podcast feed, we're going to publish an episode every day this year. So hit the subscribe button in your podcast app and we'll be back in your feed tomorrow morning. All right, that's it for today, but until next time, my advice is to just focus on keeping your customers happy.

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