← The CPG Guys
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- [00:01]
Peter V. S Bond
Hey, it's pvsb with the CPG guys.
- [00:03]
Sriraj Gopalan
Sri and I are going to be.
- [00:04]
Peter V. S Bond
In Las Vegas, Nevada January 6th through the 9th for the 2025 CES conference. Monday evening we'll be hosting an invite only party at the Aria. On Wednesday morning, we'll be emceeing a Breakfast briefing on 2025 retail media investments that's sponsored by CVS Media Exchange. That's over at the Park MGM Tuesday appearing over at the OMG Commerce Experience at the Cosmopolitan. And we'll be seen mostly around the area space. Expect to see us going into a lot of the area sky suites for individual meetings. We'll even be recording some content there. If you see us, stop by, say hello, take a selfie, whatever you want. We love speaking with people. We look forward to seeing you in January. Happy holidays everyone.
- [01:04]
Lisa Pruitt
Hi, I'm Lisa Pruitt with Hans Fishman from RR Donnelly and you're listening to the CPG Guys Podcast.
- [01:14]
Sriraj Gopalan
Welcome to the CPG Guys Podcast.
- [01:18]
Peter V. S Bond
Your host, Sriraj Gopalan and Peter V. S Bond explore how brands and retailers engage consumers in an increasingly digitally driven world.
- [01:30]
Sriraj Gopalan
And now, here are the CPG Guys. Hello and welcome to the CPG Guys Podcast. I'm pbsp, your co host and when I'm not podcasting, I work for Flywheel, a division of Omnicom that helps enterprise brands improve their SEM and SEO, growing their e commerce business. My co host, Sree, he is co founder and partner of ThinkBlue. He can't join us today, but he's here in spirit. It's a little early for him out in la, but please do take a listen to his incredibly successful music daughters Rhea and Lara on their professional careers. Lara's group, Cat's Eye, the new K pop band, has come out of the gates racing real fast. They've got over 100 million downloads on Spotify and wow, they're doing well. And Rhea's no slap. She's got tens of millions of downloads herself. Please do check those out. Before we get to our guest, we want to ask you to consider following us in your preferred podcast listening app, if you don't already. Do so. Apple, Spotify, whatever you choose to listen, where you choose to listen to podcast, please do follow us. That'll ensure you automatically receive new episodes as we release them. And while you're at it, make sure to follow our sister podcast, the FMCG Guys over in Europe and CPG Scoop right here in North America with our friends Lisa and Jennifer, Risa and Jennifer. I should say this year. We're partnering with drugstore news on December 4th at the iconic Lincoln center on the annual issue summit, it's 21st edition. We'll be co presenting eight awards at the event in the HBC space to both brands and retailers. We're also partnering with Path to Purchase Institute on its annual OMnishopper Awards Chicago November 12th to the 14th. On the morning of the 14th, a select group of winners that win the Omnishopper Awards this year will be featured on the CPG Guys Podcast. Make sure to check more about that in the digital liner notes of this episode, along with links to our podcast, our sister podcast, and the social media pod profiles of sri's daughters Rhea and Laura. All of that is available and lest I forget, the Cornell Retail Media Strategy course that you heard during the pre roll to this particular podcast episode. They're all in the digital liner notes. Don't have to go anywhere. Lots of hyperlinks. So let's get to why we're here today. As the world metamorphosizes itself in to be pretty much all in Omnichannel, a war for consumer attention is the way. Today she is engaged 365 days a year, 24 hours a day, online, offline, cross channel, all of these things. One such company that is on a mission of figuring this out and building a world class strategy to engage brands with consumers is RR Donnelly. Today we're talking to some great leaders from this company. Lisa Pruitt, President, Packaging and Label Segment and Hans Fishman, VP and General Manager of Encounter at RR Donnelly. Let's welcome Lisa and Hans to the podcast. Lisa, Hans, how you doing? Welcome.
- [04:45]
Lisa Pruitt
Great. Thanks for having us.
- [04:46]
Hans Fishman
Fantastic. Long time listener, first time caller.
- [04:48]
Sriraj Gopalan
Well, we always love those. Thank you Hans. It's. It's always great for us to interact with people who've heard the podcast, be it at conferences, at airports or frankly. I was the summer I was in downtown Tokyo walking to the Royal Garden, the Imperial Garden, with my daughter and somebody stopped me on the street and said wait, you're one of the CPT guys. So it's always fun. I find it interesting people recognize me, especially since it's an audio podcast. But that's okay. That's okay. Hey, thanks for joining us today. I'm really excited to speak with you about the space of digital transformation and the war for consumer attention. Lisa, before we get to the detailed questions that I prepared for you today, it would be great if you gave us first a brief overview of our Ardonnelli and second, what your remit is there.
- [05:37]
Lisa Pruitt
So RR Donnelly is a 160-year-old company. We're celebrating our 160 year anniversary this year. So it's something that we're really proud of.
- [05:46]
Sriraj Gopalan
You don't look a day over 30. It's awesome.
- [05:48]
Lisa Pruitt
Thank you. Yeah. Yes. Thank you. Thank you. We started as a local print operation in Chicago and then expanded over the years to a global provider of marketing, packaging, print, and supply chain. We're in 27 countries and have 30,000 employees and 150 manufacturing locations because our core through our generations has been printing. But the business has really continued to evolve up and down and up and down the stream as we look to expand our offerings for our clients, particularly in the digital space, which Hanzo be able to talk a lot about. One of the things we say internally is we used to print phone books and now we make packaging for phone books. Excuse me, packaging for phones. So it's just that we've continued to evolve over the years and spread our offerings to our clients as their needs and challenges have spread. I've been a Donnelly five years. I've spent my entire career in the packaging space. Before that, I was in the army.
- [07:01]
Sriraj Gopalan
Wow, that's absolutely wonderful. Lisa, thank you for that description of what RRD does and your role there. Hey, Hans, I'd love to turn to you to ask about what you're doing at rrd.
- [07:14]
Hans Fishman
Fairly recent to RR Donnelly, but we are standing up a platform for in store retail media specifically. And when we think about this, the difference between print and digital and all that, for us, those are differentiations we make. If you're a customer or a retailer, you walk into that store and the whole thing is your customer experience and the blending of the two. And if we can bring digital capabilities to bear to pair up with what Lisa is producing as part of her organization, we have a tremendous offering and I'm just super excited to be able to drive in store retail media on behalf of our Donnelly and more importantly, bring it to our clients and to consumers.
- [07:56]
Sriraj Gopalan
Wow, that's great, Hans. I've made mention on a prior podcast with some of your colleagues. I've had the great fortune of working with RRD on this journey towards digital transformation. From 2010 to 2014, I was at Dunhumby when they were partnered with Kroger, and we were producing tens of millions of direct mail pieces, all personalized. No more than five consumers would get this. Of millions of output would get the same combination of printed coupons. So our RD was. Was well on its way Then. And I can, I'm, I'm looking forward to our conversation to learn about how much further you guys have taken the business to our audience. I'm going to put in the digital liner notes of this episode both of our guests, Lisa and Hans's LinkedIn profiles, RDS, LinkedIn page and corporate website so that you don't have to write any of this down. You want to learn more about them as our conversation goes on. It's all right there. Just hit the hyperlink and you're off to browsing heaven. So I'm going to, I'm going to kick it off first. And Lisa, my question is going to go to you. You made mention of the fact that you, you went, you were in the army. I also understand you were graduate of West Point. After West Point, you built quite the career in packaging. I'd love for you to take us through pivotal points in that career that you think really positioned you well for the role that you're playing now at rrd.
- [09:23]
Lisa Pruitt
Yeah, I mean, you think about the. I don't even want to admit how long it's been, so I won't. But the thought of packaging as a brand ambassador has really changed over my career from thinking about that first moment of truth and how that package engages with the consumer in the retail environment. And it could be the first time the consumer even engages with the brand. But then through the proliferation of E commerce, that second moment of truth. So now we're talking about that unboxing that might be happening in the home where that could be the next engagement that the consumer has, but it might not be even directly with the brand, but with maybe the shipping container that, that the brand is coming in. So that's really definitely a key trend. Sustainability is top of mind for all brands and consumers and really the ability to think through eco friendly materials, the switch to paperboard versus the switch from plastic to paperboard, that idea of ship in your own container and recyclability and being recyclable and consumers are demanding that and demanding the brands are transparent and forward with that and it's really part of their brand promise. So that drives beyond just traditional marketing, let's call it really deep into package design, into the supply chain and how we deliver the goods, how we put the goods on a pallet, how we pack the goods. And that's really changed how we think about how we think about packaging. And then you add a trend of the interactive packaging, QR smart, the addition of regulations, the EPR laws that are coming into play in seven, eight states in the U.S. the EUDR laws that we're seeing come come to bear in Europe are also weighing on decisions that marketers have to make about their packaging. And then the last trend would be design tools. And when I first started in the industry, we were designing by hand. Some of it we were cutting by hand. Now you think about what the designers have at their ability to show 3D renderings, to add graphics to the digital version, and just be able to then put it on a virtual store shelf. I mean, there's some powerful stuff from hand cutting a sample.
- [12:20]
Sriraj Gopalan
Thank you, Lisa. Hans, let me turn to you. We are long past a world with three major networks and brick and mortar shopping. Right. It's definitely a war for attention. Whether you're a retailer or you're a brand, people are carrying around smartphones with them, constantly distracted. They have so many choices for consumption of content. You know, I would love to hear from you. How do you think about that, and what is your message to brands and retailers trying to cut through the clutter and get the attention of consumers in this omnichannel, digital world we live in?
- [13:01]
Hans Fishman
Absolutely. It's building on what Lisa was just sharing, which is what is the customer experience? How are we perceiving it? I want to sort of shift the question a little bit. It's about influence. How do you develop a brand influence? How do you get it so that you get that affinity? So I am comfortable walking into this retailer again and again because I feel comfortable there for whatever reason. Why am I buying this product? Because it really meets my need. And it does begin with, Lisa says, literally, the unboxing. What does it look like on a store shelf? Is it catching my attention? I think the key to how we employ digital technologies is how do we reinforce that? How do we embold it and how do we solve against. Some of the challenges are like time to market. So can we bring messages more quickly using digital technologies? Can we deliver the messaging more contextually? So it's not just sitting in a store in some place, it's sitting in a very specific. That message is delivered in a specific location within the store to help, you know, inform consumers. To me, when you tie that together and you look at it through that lens, which is our job as RR Donnelly, is to help brands and retailers deliver their messages better to the consumers that are looking for their products or walking up and down their aisles or shopping on their websites.
- [14:22]
Sriraj Gopalan
So part of getting that attention is the customer experience itself to what you said, and we tended to think of in the digital age of building customer experiences, being exclusively around either owned and operated properties, a retailer's mobile app or a site or off site. Right. Programmatic advertising and other things like that. Let's talk a little bit about in store because there's some, I don't know if it's a quiet revolution, but there's a revolution going on in store. What's happening around shopping experience and attention in store that this digital age is bringing us?
- [15:04]
Hans Fishman
I think first off, we identified this trend several years ago and we as we built the encounter platform, we're basically going into year three. It's rolled out, we have it in many locations. But at the heart of it, at the heart of it is that traditional brick and mortar retail. When I walk into a grocery store, for example, it's the same grocery store that my grandparents walked into back in the 40s and 50s. It has not changed. And although we are digital beings at this point, I guess we're all digital natives, so to speak. Just as sort of a simple paradigm, when we pick up a phone, right? My phone is exactly the same as Lisa's phone. It's exactly the same as your phone when I take it out of the box. But over a couple of weeks, it starts to personalize. It starts to my apps, my messages, my notifications. So it becomes unique to me, that ability to contextually deliver messages. Lisa's phone, she's getting an alert about whatever it might be, bad weather or a traffic jam or a package arrived. That specificity is what endears us to become a loyal iPhone user or Google Pixel user. How do we take that same sensibility though, and make it come to life in a retail environment. And the interesting thing is that the technologies do exist to do that. They are there. The revolution in in store is about how do we bring those technologies to bear in a physical environment. What is the business model that you can use to actually pull it together and make it cohesive for marketers? The development of digital retail media networks over the last, you know, seven, eight, nine years have paved the way for retailers to rethink how they reach consumers and how they interact with the brands. And it has created opportunities for the brands to reach consumers through the retailers websites. Let's just take that to the next step. Every single retailer I know has more foot traffic than they do digital traffic. There are more people walking up and down the aisles than there are on their websites or apps.
- [17:09]
Sriraj Gopalan
That's where most of the sales occur, right, Hans? Like 90% of grocery sales occur in the Physical brick and mortar store to.
- [17:18]
Hans Fishman
This day still specifically for convenience and grocery stores is actually 88% of transactions happen in the real world world. So it's a pretty significant number. There are more people, there are more transactions in the real world. It's just, it's a very hard nut to crack. How do you physically do it? That's effectively what we've built. That's the encounter platform. So we, we're not just very excited about what we're working towards. It's about how can this tool be used to influence consumers on behalf of the retailers and the brands. And when we started looking at in store retail media specifically there, there are some numbers out there. Emarketer did a fantastic study on this but even the authors of that feel they might have underestimated it. We actually just released a study and maybe we can put the link up on the website with you from. We did in conjunction with Grocery Doppio. We've actually already pegged this at $9.5 billion in 2024 as a global number. When you go to the EU. I recently went to France and I walked into a Carrefour. They had 60 screens throughout the car. Four delivering CPG messaging all up and down the aisles of that store. We now see it here. I personally, I have a Whole Foods in my neighborhood and I shop that Whole Foods. I'm now seeing screens appear in my Whole Foods. We know, we know other brands are looking at it. So to me the revolution has already started and it's already happening and we're now in a period of rapid iteration and learning.
- [18:45]
Sriraj Gopalan
I've got to imagine. Let me follow up on this for a second, Hans. I've got to imagine that the promise of this new digital in store consumer engagement goes beyond simply taking what was being presented in the physical print and linear television world and delivering it in a physical store, but taking advantage of the closed loop measurement systems to actually start to understand how these interactions actually move the needle measurably for the brands that are investing in. Is that kind of like the real promise of this? It's not just we're taking it from where people aren't to where they are. It's really about measurement.
- [19:24]
Hans Fishman
It is about measurement. I've, I have been in digital advertising product for 20 plus years now. The money is on the back end is it's. I say this all the time to product managers. There isn't a single advertiser or brand that wakes up in the morning like oh I can't wait to buy some Advertising today, they don't do that. Right. What they want to do is they want to put a dollar in and figure out how they drive a dollar 25 in sales. So it's about the measurement and how do we track that to be able to deliver media campaigns and strategize and really focus in on a return on ad spend. But I will say this, the measurement isn't tied to digital. The what's really fascinating about in store is when we start combining those together. Lisa's packaging. Lisa, you know, we start looking at specialty displays. All of those tools are can still be measured by these digital technologies and we can start looking at how they are impactful and useful. We really do need to think about. I know again, as longtime marketers in this space, we tend to separate the two of them. Print is print and digital is digital. No, they work together actually quite harmoniously.
- [20:30]
Sriraj Gopalan
Lisa, let's look a little downstream implications on supply chain keeping stores stocked and even the shelf appearance through packaging constraints. What are your thoughts around this?
- [20:44]
Lisa Pruitt
Yeah, I mean just to kind of touch on what was said earlier, this idea of this omnichannel retail and still the importance of packaging, but the complexity that it adds to the packaging supply chain because it is not appropriate to take the retail package and potentially use it as the E commerce package. So as the retailers who are manufacturers have to think through their SKU count and how they manufacture the product so that the packaging is fit for use and safety and gets through the supply chain protected is a whole nother challenge. And to what Hans was saying, that integrated experience. So the digital and packaging has to have an integrated experience. But then the packaging across the retail environment versus the E commerce environment maybe versus the home delivery environment is totally different in that packaging still needs to live up to that brand promise. So that's a huge implication for marketers and their operations team as they think about driving it. And then this idea of just the proliferation of SKUs because of the distribution channels. So in Covid we saw this reduction in SKUs because of the supply chain challenges. Yeah. As, as the omnichannel places crave.
- [22:15]
Sriraj Gopalan
Yeah, Crave assortment.
- [22:16]
Lisa Pruitt
Yes, yes, they do. They do. Everybody wants that strawberry rhubarb cherry pie. That and the manufacturers, you know, want to only have to make a thousand of them and they, they, they cringe it. But still that's, that's what the consumer wants. But the point is that blending of all of this just supports the need for in our clients and in conjunction with us having all those separate functional areas Aligned and talking so that they're delivering together. And then how packaging and the labeling can deliver personalization data driven insights because it doesn't necessarily have to be through as Han's passionate about the screens and the stores, which is, which is a huge trend. But also how can we deliver insights through the packaging, through QR codes, et cetera. And then when we think downstream, I'll mention again, sustainability and ethical consumption. It's just top of mind. Another part about downstream is supply chain disruptions. I mean we'd all like to say that we're over it, then we're back. I think if we're realistic, that's we're never going to be over it again. It's going to be chaotic and that's our new world order. So how do we think about the operations where the new world order is chaos and that is robust inventory management, which is services Donnelly can provide to our clients and manage that supply chain for them. State potentially staging of goods closer to the retailers so that when there are stock outs or high volume runs that they're able to replace quickly versus across country or across world. The balance of too many skews, not enough skus. How do we balance that? Mix the need for just robust business continuity plans. Okay, I can no longer get this paperboard because they had a dock strike in Finland. What do I do? And I can't wait to figure that out until it happens. I need to be thinking about with our suppliers, with our clients, what that looks like and then how to maintain shelf appearance through packaging constraints, ensuring that it's flexible, ensuring that the brand consistency still is there. I mean those were a lot of conversations that we have in tight material markets as well. You can replace it with this. Does it still do what you want the brand to do? So the overall message is downstream isn't, shouldn't be separated from the digital world, from the E commerce world, from the retail world. They're all, they're all very, very tied together.
- [25:24]
Sriraj Gopalan
Let me call out two things you mentioned that really resonated with me. Lisa, you talked about packaging that is meant for a physical store may not be meant for E commerce. That just screams to me brands need to be working with their packaging partners, particularly around this concept of price pack architecture. Right. You've got to figure out what's the right product for the right channel for the right retailer. And putting out the massive assortment that a marketplace demands is, is only going to cause you a whole lot of, a whole lot of angst and not necessarily the profitability you want you as manufacturers control assortment and you get to decide what goes to a marketplace or doesn't go to a marketplace. You don't have to make everything available. The second thing you said to that was incredibly valuable was that in so many words that some of the most valuable real estate that a brand has is the package itself. Like the ability to communicate what, what the product is and understand that people in a digital world are used to picking up their phone and they can look up the product and it's a food product. They can see it's non gmo, it's fair trade, it's, it's living a gluten free lifestyle. But you can't rely necessarily on the fact that in a physical store consumers can get that information right there. What you present on your package is one thing. You mentioned QR codes. What a great tool to be able to get more information in the hands of your consumers at the point of purchase. Information that is conversion driving and it's also a really great way to capture user generated content and feedback from consumers about what they're, what they like or not like about the product. So making sure you are using your package to enable your consumers to communicate with you is very important.
- [27:26]
Lisa Pruitt
Yes, yes, yes. And two points. You made me think about that package for the right distribution channel and when you think about what Amazon's doing in the shipping your own in the own container initiative where they want to eliminate as best possible the brown box doesn't mean that the carton you use in the retail environment is going to make it through that Amazon distribution chain intact. So that, so that the design of that package is important before it used to be okay, I sell it this way in a retail environment, Amazon's going to put it in a box and I'm going to be just fine. That isn't necessarily the case anymore and they don't. And as part of their sustainability initiatives they want to reduce the amount of packaging that they're using as they ship it. The second point to think about is the package on the retail shelf and how the package looks versus the competitors. So many times the marketers are thinking my brand is X and this is the color scheme I want my brand to be because it speaks about the brand. But then when you put it on the shelf next to the competitors, does that brand stand out and does it use all the shelf space allocated? Many times we find that your, whatever the distance is, let's call it 12 inches between top of shelf and bottom, it isn't utilized in the in the most efficient manner to highlight the brand. And I'll use. This is a little dated, but if you go to the feminine products area and look at. I can't remember the brand, it's black. I mean that brand that is black with fluorescent colors. In the feminine. Yes, in the feminine hygiene. I mean when they did that, it was revolutionary because everyone felt feminine hygiene needed to be muted pastel colors and they just stood out among their competitors. Said a lot about the brand, but also the brand versus the competitor. So the store shelf is a powerful area for the brand.
- [29:34]
Sriraj Gopalan
Yeah. Understanding what a typical shelf bears for your category in terms of height is very important because if you, if your product is such that it's not taking up all the space, but it's too big to stack on top of each other to take that full facing, but your competitor is able to do that, their product looks, you know, more dominating in the space. So I love that. I thought that's some really great insight, Lisa. Hey, let me remind the public listening to this podcast today that I have the great pleasure of speaking with Lisa Pruitt and Hans Fishman from RR Donnelly. So let me throw this to Hans first and I'll ask Lisa for you to add some commentary. On top of that, with everything we've discussed so far, how does the influence of innovation, especially in a very inflationary environment, yeah, it's coming down, but people are still feeling pain. How does this impact particularly where, you know, big multi packs are getting a lot of attention as a mechanism for saving money?
- [30:38]
Hans Fishman
There are a bunch of different ways to think about this. I'll start with sort of a basic conceit which is that although every retailer out there has digital technology, they have computers and things like that, they truly haven't digitally transformed. And we saw the impact of that during the pandemic with the supply chains that Lisa mentioned a little while ago. The signals that are necessary to know what is selling right now, what is the message that is being heard from consumers? Where we've seen this concept really come to play is with concepts like fast fashion where they take rapid input from consumers and they'll swap out and they do very small packs, if you will, small runs of clothing, and they're able to iterate and learn very quickly and they just move on to the next trend. Those signals don't exist in the physical world. So from an innovation standpoint, you have to start by fixing that problem first. Once you put the digital technology, the backbone into the store, you then can capture the signals necessary to make those decisions. And you know, at least I mentioned, you know, the strawberry soda a little while ago. I grew up drinking Dr. Brown's cell ray. Right. Which is, you know, which is, you know, the classic. In any case, the point is that if we could start seeing that celery flavored soda is all of a sudden blowing up for whatever reason, but you can see that signal today, not six months from now. It allows for a smaller bottler to get in and actually capture that trend and grow their business accordingly. So when I think about how do we fix this problem and the role of innovation, it's two parts. Can you put the gauges, the dials, the levers in place physically inside of a store to be able to capture the necessary information, the actionable data. And then the second part is then put that into play from an omnichannel and from a packaging perspective to really be able to drive business. And I think the more that, the tighter that we, that Lisa and I make this over the course of the next many years, we're really going to be able to see some significant opportunities arise for wholly new categories to pop open.
- [32:40]
Sriraj Gopalan
Lisa, thoughts from you.
- [32:42]
Lisa Pruitt
I mean, if we just get to the granularity of multipacks as a, as a way to address inflationary pressures, they're a great way from a manufacturing perspective and from a consumer perspective, I mean they're, they have economies of scale. So economies of scale across the entire supply chain, they use less packaging. So there is a sustainable message there that brands can deliver on. Brands can then also use this as a way to introduce new flavors, new products in that multi pack. It could build the unboxing experience as you think about the excitement of not just one product, but multiple products. And then it does take that complexity out of the supply chain. When you look at the inflationary environment as well, one of the things we've seen from our clients is being able to be even more proactive about sustainable decisions. Because many times those sustainable decisions are driving cost out. And the pressure of the inflationary environment spurs creative solutions that they might not have considered before or might not have had the roi. So let's not be naive to think that our clients are introducing sustainable measures that are costing consumers more. They're not. They need sustainable ideas that drive cost out and are good for the environment. So in, in the time of inflationary pressure that that intersection is, is easier for more options and, and that's a great opportunity for them to drive things that now have, have an ROI that might not have existed before.
- [34:30]
Sriraj Gopalan
I'LL tell you, I love multi packs. Variety packs are the ones that always get me because there's always one flavor that I just don't want and it's like, do I sink the investment in to get 2/3 of what I want? No, I just can't do it.
- [34:44]
Lisa Pruitt
That's why you need, if you have teenage boys at home, they'll eat anything. So you can, you can buy the multi packs.
- [34:49]
Sriraj Gopalan
They'll give them anything give. They'll just consume it away there. I love that. So, Hans, the companies you work with at RRD have access to a significant set of data streams and knowledge. How does this data stream work in your favor and eventually for the consumer as you think about go to market strategies?
- [35:10]
Hans Fishman
As a longtime product person, I always start with the consumer. What is that consumer experience? Sort of simply put, we are putting digital signage in stores and this in store. Networks start to grow and these RMN start to build. We don't want to repeat what happened in the digital world where everything becomes NASCAR Times Square. Nobody wants to do that. Right. So the key is to use the data in conjunction with the retailer and supported by the brands to be able to create more bespoke experiences in stores, more contextually driven messaging. And it's not necessarily in the form of advertising. Right. It's a how do we, how do we think about I'm in the, you know, the, maybe the pasta aisle, right. So the message isn't necessarily go buy ragu pasta sauce, it might be buy some tomatoes, you can find Those in aisle 1. Buy some hamburger meat or some sausage, you find those in aisle seven. Right. So it's a blurring of the line of the creative formats, if you will, that it starts looking more like almost product placement and the way to think about that. So the key is using the data you're collecting the way that we do it digitally and then use the digital technologies to dynamically update creatives to be able to deliver that message across those data streams that we're looking at. They do come from the retailer. They also come from the consumer behavior in the store. They become from purchase data. And when you put all that together, it starts looking a lot like what's referred to in digital advertising as contextual targeting. Right. So they all come together and it becomes contextual targeting within a physical environment. And that's based on I'm in the bread aisle, so let me give an ad for mayonnaise or for peanut butter and jelly or for boar's head luncheon meat. The contextuality is what drives the conversation with the consumer and that conversation can become from the retailer or it can come from the brand and as they work together and you start putting it into this retail media parlance and sort of that notion, you're extending this idea into the physical world and I think that's how the data streams come into play. The final part though is that there is data that's collected as just par for the course during the day. Retailers don't necessarily know what to do with that data. It's valuable from a planogram or merchandising perspective or from a business analysis. It doesn't inherently have value. I think that when you start looking at it in the context of advertising, you can start to figure it out pretty quickly what the append is.
- [37:58]
Sriraj Gopalan
Let me go to Lisa first and Hans, I'll ask you for some commentary on this. But so given this evolving consumer landscape, what do you see as being the value proposition for RR Donnelly in the eyes of brands and retailers?
- [38:13]
Lisa Pruitt
One of the ways we like to say it simply is end to end x excellence and the ability that we have to develop comprehensive innovative solutions that connect our clients to their customers and the vast array of experts within the company that we can bring to bear on the client's problems to develop the solution. I mean, think how vastly different my and Hans backgrounds are and our expertise, but both are solving problems that our clients have in that it's that beauty of being a global print organization married with an intensely deep digital marketing company. And then as we bring these experts into our clients, we're able to solve their problems across across the entire landscape and be able to do this globally so their brands are protected globally and they can deliver on their brand promise.
- [39:20]
Sriraj Gopalan
Hans, what would you like to add to that, if anything?
- [39:22]
Hans Fishman
I will say this, that we are very much I'm in a digital world, but we're putting into a physical world. I personally can't think of a better place for us to have developed this platform. And I mean this as someone you know, I know you're going to post my LinkedIn there. I'm former Apple, I was at AT&T. I've done, I've worked at large companies and I'm very attuned to the advertising world and all of the large players in the advertising world. None of them are going to be able to do what we can do. And I mean that in all seriousness. It's not just the scope and scale, it's the attention to detail that we pay for our retail customers and for our brand customers is it's to the minutest detail. I mean, Lisa has again and again talked about the focus on attention that we have in terms of how we look at these solutions and how we bring them to our clients so that we truly solve problems. This is, I think from an RRD perspective, it's not even a natural evolution. It's a natural extension of what the company already does and will continue to do for another 160 years.
- [40:32]
Sriraj Gopalan
It's our DNA that is outstanding. Thank you. So let me close this out by looking at the future, because that's where we want. I'm a Canadian. Wayne Gretzky is my idol. We always don't talk about where the puck is, we talk about where the puck is going. Thank you, Wayne. And so I guess my question to you is this. And I'll start with you, Hans. What trends are you particularly looking towards for driving this incredible ecosystem of retail media, particularly in store, and how you're hoping to leverage these trends to advance your capabilities and your value proposition?
- [41:15]
Hans Fishman
I'm going to clearly we're focused on in store retail media. We've done not just intensive studies of it, we're deployed, we have customers, we do a bunch of things in relation to it. I want to go to that next step because I already, I think in store retail media is here and we're going to see over the next two, three, four years, you're going to see this explosion. Let's just subtly put it this way. We know that digital retail media networks are $100 billion industry by 2027. Right? Okay. But as we talked about earlier, there are more people and there are more sales happening in the real world. So if you can make it come to life in the real world, how big is that number going to be? I think this is a much larger business opportunity than most folks realize. But I'm going to go one step beyond that. The technology isn't about delivering advertising. That's not what it's about. It's about how do we make a retail environment far more customized and bespoke and personalized to the consumers. When we look at the trends in retail, there hasn't been a significant uptick in E Commerce past that 20% mark. It's never really done that. The problem is it creates imbalance for retailers. They have better margins digitally than they do in the physical world. How can we use these technologies to improve the shopping experience, to improve margins, to drive business in an interesting way? I think that when we get to that sort of three dimensional version of what retail media does in the physical world and how it changes the dynamics of margins up and down the aisles per linear foot. That's what I'm excited about. And I think that's a degree of understanding that is going to take the industry a couple of years to figure out. But once it comes, I think that it starts impacting how stores are merchandise, how they're laid out. Literally as we're talking about with multipacks. That multipack is literally determined almost in real time based on the activity and the data we're collecting from a truly digitally transformed retail environment.
- [43:12]
Sriraj Gopalan
Lisa, I'll give you the last word on this topic.
- [43:14]
Lisa Pruitt
I agree with Hans on the personalization. We're just going to continue to see that as a growing trend and then how the retail environment can integrate that into their signs. Their signage, their merchandising, their packaging, their continued trend of there's just no guarantee of loyalty. And as inflation eases, how do you. How are brands winning back clients that they lost due to the inflationary pressure potentially that I see as a trend over the next, over the next few years, E commerce is a continued portion of it. Maybe not in the retail grocery and the percent. I mean overall retail sales. 40% of retail sales are from E commerce and continues to grow. So across a landscape beyond just the grocery world, it's going to continue to have an important play. And then it would be wrong not to just say ar AI VR. How does that all build for those.
- [44:21]
Sriraj Gopalan
Of you playing bingo today in digital marketing? We did just cover off on the AI. Thought we weren't going to get to it by the end of the episode, but Lisa snuck it in there, so. Thank you.
- [44:32]
Lisa Pruitt
Yeah, well, you know, you have to. It's, it's kind of, it's kind of like a check mark there.
- [44:36]
Sriraj Gopalan
It's like the Wheel of Fortune. Rst L N E. You got to cover those off.
- [44:41]
Lisa Pruitt
Yeah, that's right. That's. That's right, that's right. That should be at least for one good. Like on the podcast, right?
- [44:48]
Sriraj Gopalan
I would hope so. That's great, Lisa. Hey, let me remind our audience, please visit cpg guys.com you can find all of our episodes. They are sortable by your favorite topic of choice, like retail media in store analytics, whatever you want, whatever your, your area of focus is, it's easy to find the episodes that address those. And if you think you or your company has some thought leadership to contribute to our community discussion that goes on a couple times a week, drop us an email@contactpguys.com maybe you can join us on a future podcast episode while you're there. Or if you're on Spotify or Apple or whatever your preferred listening platform is, drop us a rating and and that helps make our podcast more findable from people like you who are looking to be both educated and entertained around this omnichannel digital space. And of course, thank you to the 34,000 plus followers on LinkedIn who choose who choose us for educating and entertaining them. So a couple things we mentioned during this podcast, there was a white paper. We'll make sure we have a link to that. We'll also have a link to the Encounter site on rrd, their landing page so that you can learn more about In Store influence and how RRD is addressing that. I think this was a great conversation around end to end comprehensive innovative solutions. I thought that came through very clearly. Lisa Hans, thank you so much for joining us today. That was terrific.
- [46:20]
Hans Fishman
Thank you, thank you.
- [46:21]
Sriraj Gopalan
And to our podcast listeners, we appreciate you as always joining us and with look forward to speaking with you on the next episode of the CPG Guys podcast.
- [46:31]
Hans Fishman
Goodbye.
- [46:42]
Unknown
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