Path to Purchase Trends 2023: Challenges and Opportunities

Identifying commerce marketing trends and opportunities is our primary goal each year as we conduct the Path to Purchase Trends survey. This go-around, our 27th annual survey (which was fielded in November 2022) saw two areas of focus jump to the forefront: retail media and inflation. Retail media and, specifically, retailer media networks aren’t new on our radar; they have been a major part of our trends report for the past three years. But retail media is continually growing, and increasing in importance, as this year’s survey results indicate — 58% of respondents said their organization’s investment in retailer media networks increased in 2022. And it will come as no surprise that inflation and the economy were hands down the most frequently mentioned business-related concerns for our respondents as they headed into 2023. With our survey, we were able to pick the brains of 166 marketing executives, who shared their opinions on various other important topics as well. Read on to dig into the results … Strategies & Tactics We asked what strategies or tactics have been most important to survey participants’ organizations over the last year, allowing them to choose up to three from our list of 13. Fifty percent selected retailer media networks — which was 18 points higher than the results from our fall of 2021 survey when we asked the same question. E-commerce content finished second with 48%, followed by digital media (other than retailer networks and social media) at 34% and social media at 33%. In-store display activity for brand-driven programs was selected by 21% of respondents, and that percentage was 9 points higher than in last year’s survey. With an open-ended question, we asked respondents to tell us more about the strategies and tactics they’ve used. Here’s a sampling of what they had to say: “We have relied more on retailer media networks as they have become more advanced and offered more tactics to invest in. We have also put more budget and analysis into paid search.” “Retail media networks have been the most important due to the spend we had to invest per the retailer. We’re spending time to ensure it is working as hard as it could and evaluating it almost on a daily basis.” “We have almost doubled our in-store trade spending to increase velocities on our base items. From a marketing standpoint, we have moved away from base TV advertising and put more of the dollars into connected TV advertising options.” “We’ve increased social media based on the significant ROI derived from TikTok and continued to invest in consistent performers Instagram and Facebook, among others.” “We focused on e-commerce business opportunities and are building fewer, bigger, better programs.” “We relaunched our direct-to-consumer to drive more loyalty, so there has been a big focus there and driving DTC exclusives.” “We have increased more upper funnel tactics to drive category/brand engagement to drive traffic to top retailers during our key season to get shoppers to engage.” Concerns & Challenges Without steering them in any direction, we asked respondents what their biggest business-related concern was heading into 2023. Sixty percent of them mentioned the economy, inflation or a possible recession in their answers. And more than a few resurfaced the topic of retailer media networks — mainly the required spend being a top challenge. In their words, here are some concerns: “Navigating ever-changing economic conditions.” “Inflation and impact on consumer buying behavior.” “Inflation and recession. That coupled with retailers asking (or demanding) manufactur-ers/marketers invest in their media networks.” “The increasing demand from retailers on ‘forced’ spends on their platforms. We don’t have allocated budgets to meet their demands and it is causing friction on the relationships.” This “biggest concern” question also brought an ongoing challenge to the forefront — the workforce. “Labor,” said one respondent. “There’s no one to hire.” In a separate part of the survey, we also asked respondents about the challenges their organizations are facing with regard to recruiting, training and/or retaining talent. Of the 10 possible responses we presented, “Desire for remote work” and “Difficult to recruit talent with appropriate experience” were the clear leaders, with one-fifth of survey takers naming each. Fourteen percent answered “retention/turnover,” while 19% said there were no challenges in this area. Respondents were asked to explain their answers, and here’s a sampling of the workforce challenges they’re facing: “Turnover is higher than ever. However, remote work has opened opportunities for recruitment of high-caliber individuals from a broader geographic base.” “Not many are trained in the new digital capabilities. Digital companies (Amazon, Netflix, Instacart) stole them.” “Digital marketing and analytics positions are highly competitive and [employees are] hard to keep.” We then asked respondents if the roles and responsibilities of brand and shopper marketing were converging at their organizations — and 56% said yes. “These used to be much more siloed,” explained one respondent. “As the state of the market is changing, so is the landscape of our internal teams and their responsibilities when it comes to omnichannel approach.” In Stores & Beyond When choosing up to two answers from our list of seven options to most effectively drive shopper engagement inside the store, 50% of respondents said that a “true omnichannel approach” was the way to go. Forty-five percent chose the tried and true “pricing/promotion” path, while 30% said innovative merchandising was the key. When asked if they leverage physical experiences outside the traditional retail environment, 45% said yes. As for which types of experiences: 73% named “Demos or experiential activations” and 65% said “hosting or being present at local/community events.” When asked if they incorporate social commerce into their omnichannel marketing budgets, 61% said yes. Facebook (55%) and Instagram (54%) were the platforms named most often. Staying outside the physical environment, we asked if respondents’ organizations are activating in the metaverse. Eleven percent answered yes, and another 15% said they were planning to do so soon. When asked for more details about this next era of commerce, respondents answered: “We’re mostly creating digital universes for people to explore and buy NFTs.” “Our brand teams launched NFTs and another had a small execution within the metaverse.” “All plans and strategies concerning the metaverse are being managed by our head office; at the moment, it is not a local focus.” SURVEY METHODOLOGY: In November 2022, marketing executives at consumer product manufacturers were emailed a questionnaire to be completed online. The names were drawn from P2PI Magazine subscribers, Path to Purchase Institute members and others in the EnsembleIQ database, with an emphasis on people with manager, director or senior executive titles. From those emails, 166 executives submitted surveys. Each respondent was entered into a drawing for one of four $100 Amazon gift cards. RETAIL MEDIA TRENDS: Our Trends 2023 report examines the challenges retail media presents, while providing chain-by-chain ratings of various retailer networks. View here. NOTE: For additional findings from our annual survey, Path to Purchase Institute members can view the full Trends 2023 survey report here. Insight from a CEN member ... Which Emerging Commerce Marketing Trends Are You Excited About? John Stanwood, Senior Marketing Manager - Strategic Channels, Sargento Foods, says … "The emergence of social commerce, where people are shopping in traditional social channels. Also, how has the emergence of video commerce impacted this? And why? With Gen Z’s and younger Millennials’ high rates of mobile usage, this trend will become more impactful as the Gen Z’s mature to heads of households." "The impact of retailer (food & mass) recipe hubs to the e-commerce shopping journey (food, Walmart, Target). Why? As food and mass retailers want to impact a bigger portion of the e-commerce shopping journey, it’s important to understand their recipe approach, how successful they are, and how CPGs should respond to this."

Path to Purchase Trends 2023: Challenges and Opportunities

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