Staying competitive doesn’t have to feel impossible.

In today’s grocery landscape, you don’t have to look hard to see the influence of Tier 1 retailers. Major chains wield significant influence in the industry, not only shaping consumer preferences but also supply chain dynamics and market trends. With their extensive networks and substantial resources, these national chains have the ability to make CPGs play by their rules, limiting the involvement brands have in their own campaigns and controlling access to important data. 

But this doesn’t mean that brands can’t carve out their share of the market. Below, we explore a few key strategies that allow CPGs to harness their unique strengths and make their mark on the industry.

The Dominance of Major Chains

On a surface level, the relationships between CPGs and major chains might seem symbiotic and collaborative, marked by a delicate balance of mutual dependence. However, with the rise in popularity of retail media networks, major chains have continuously held the key to market success for CPG brands. The power that Tier 1 retailers have accrued can be easily seen in the numbers. 

For example, take Amazon. Launched in 2012, Amazon’s RMN has continued to grow over the years, with an overwhelming $2.1 billion in ad sales during 2021 alone. But Amazon is far from the only major retailer putting up big numbers. In 2022, companies like Walmart and Kroger reported monthly averages of in-store visitors in the hundreds of millions. With retailers commanding this much attention both online and in-store, it’s easy to see how major chains began calling their own shots in their relationship with CPGs. 

Strength in Numbers

With digital retail media advertising spending expected to reach $175.66 billion worldwide, it’s clear that brands are doing their best to be seen. However, increasing ad budgets doesn’t necessarily mean a more equitable relationship with major chains. The strength of these massive networks is the volume of customers they reach. At first glance, this level of engagement seems impossible to reproduce. But Tier 1 customers aren’t the only audience who are primed for connection. 

In order to gain greater control of campaigns, merchandising support, and data insights, CPGs can use a simple but proven strategy that relies on aggregated media networks that are on par with the reach of Tier 1 retailers. When smaller retailers and regional chains join forces, their voice is amplified to a whole new level. And by leveraging the power of collaboration and collective strength, CPGs are able to extend their reach to new audiences that are outside the scope of major chains. Plus, these networks give brands the freedom to create tailored marketing campaigns that reach and resonate with their target audience, as well as powerful first-party data that help craft future campaigns, two important components that are often lacking when major chains hold the power. 

Embracing Niche Markets

Another key strategy for CPGs to succeed and excel in the face of uncooperative major chains is to embrace niche markets. While the Tier 1 RMNs have the resources to reach a vast audience, they tend to focus on a broader demographic. By focusing on targeted markets and learning from actionable data from accommodating RMNs, brands are able to craft tailored marketing campaigns and enhance customer experience in a way that builds long-term loyalty.  

This means leveraging all aspects of a brand's digital marketing strategies to reach and engage with their focused audiences more effectively. Social media engagement, email marketing, and search engine optimization can all be powerful tools for targeting and communicating with unique markets. Understanding the specific needs and preferences of these untapped markets allows brands to differentiate themselves, creating a personalized shopping experience and leveraging digital marketing tools to reach and engage with target audiences more effectively. 

Leveraging the Power of Digital Marketing

The internet is a big place, and consumers are increasingly engaging with brands through a variety of online platforms. But for many CPGs, there simply isn’t enough time or resources to maintain a vibrant social media presence, produce engaging content, and stay on top of SEO and email marketing, in addition to juggling multiple RMNs. With the buying habits of consumers constantly changing, CPGs need to find ways to keep their products in front of their customers while wearing many other hats. 

The typical relationships between brands and Tier 1 retailers do little to help facilitate a comprehensive marketing plan, a crucial piece of the puzzle for CPG success. And with brands devoting around 47.9% of their advertising budgets to digital channels, marketers need to be sure they know for certain that their messaging is landing in front of the right audience. Diversifying RMN budgets to include networks that provide data and bolster digital marketing can be a crucial difference-maker for CPGs looking to get noticed. 

Your Next Chapter

Successful marketing campaigns are complex, and it’s easy for CPGs to feel overextended. But staying competitive in the face of unresponsive national chains doesn’t have to be your only option. By leveraging the power of numbers and working with media networks that offer more flexibility,, brands can direct their own campaigns, control their own data, and reach a whole new audience of long term customers. 

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