In-Store Innovation: How CPGs Can Win the New Path to Purchase
The aisles of your favorite grocery store, pharmacy or beauty retailer are no longer just places to pick up essentials. They're battlegrounds for consumer attention, where the rules of engagement are being rewritten daily.
For commerce marketers in CPG, understanding these seismic shifts — from evolving consumer trust to the rise of AI and category fragmentation — isn't just about staying relevant. It's about unlocking new avenues for in-store innovation and activation that drive actual sales.
Shifting In-Store Engagement Trends
The traditional path to purchase, once a predictable journey from shelf to cart, has been fundamentally altered. Three key trends are reshaping how consumers interact with brands within the physical store:
- The Authenticity Imperative
Consumers are weary of generic marketing. In-store, this translates to a demand for transparency. Think about the rise of "farm-to-table" narratives in grocery or clear ingredient sourcing for beauty products. Brands that can authentically communicate their values and processes directly at the point of sale will win trust. This means moving beyond simple price promotions to showcasing the story behind the product.
- Fluid Identities, Flexible Shopping
WPP BAV disruption research highlights consumers' freedom to explore new identities and life choices. This manifests in less predictable shopping patterns and a greater openness to new brands, even within familiar categories. For CPG and food, this is a golden opportunity for in-store discovery. Are your displays encouraging exploration? Are you cross-merchandising in unexpected ways to capture this adventurous spirit?
- Consumer Power, Elevated Expectations
Consumers now demand personalized experiences and immediate gratification. In-store, this means leveraging technology to enhance the shopping journey. From interactive digital displays offering tailored recommendations to seamless self-checkout options, the physical store must mirror the convenience and personalization consumers experience online.
Category Fragmentation: A Call for In-Store Specialization
BAV metrics reveal alarming declines in category differentiation across OTC health (34%), beauty (26%) and grocery (23%) over the past decade. This "sameness" is a direct threat to in-store visibility and sales.
Lessons Learned:
- The "One Size Fits All" Shelf is Dead: The days of a single, undifferentiated aisle for "health" or "beauty" are over. Consumers are seeking specialized solutions.
- Niche is the New Mass: What was once a broad OTC health category has evolved into a complex ecosystem of specialized solutions (e.g., gut health, sleep aids, plant-based remedies). Similarly, beauty now features hyper-specific ingredient-focused brands.
In-Store Activation Takeaways:
- Curated "Worlds" within the Store: Instead of broad category aisles, create mini-destinations. Imagine a "Plant-Based Power" section in grocery, featuring not just meat alternatives but also complimentary vegan snacks, sauces and recipe cards. For beauty, think "Clean Beauty Corner" with specific ingredient call-outs and educational materials.
- Storytelling Through Merchandising: Use endcaps, shelf talkers and digital screens to tell the story of your specialized product. Why is this particular gut health supplement different? What makes this beauty serum unique?
- Leverage Retailer Partnerships for Niche Placement: Work with retailers to secure prime placement in these emerging specialized zones, rather than just competing for linear shelf space in a crowded general category.
AI: The In-Store Game Changer
AI is no longer just a back-office tool. It's rapidly transforming the in-store experience.
Lessons Learned:
- Discoverability Beyond the Digital: While AI-powered search (like ChatGPT) is gaining traction, brands must also consider how AI influences in-store discovery.
- The Narrative Challenge: AI scrapes information from across the web. This means your in-store messaging must be consistent and reinforce your brand's core narrative to counter potential misinformation.
In-Store Activation Takeaways:
- Personalized In-Store Recommendations: Imagine AI-powered kiosks that, based on a few questions or even facial recognition (with consent), recommend specific CPG products or food items tailored to a shopper's dietary needs, preferences or health goals.
- Smart Shelves and Dynamic Pricing: AI can optimize product placement and even adjust pricing in real-time based on inventory, demand and competitor activity, directly impacting impulse purchases.
- Augmented Reality (AR) for Product Exploration: Use AR apps that allow shoppers to scan a product and instantly see nutritional information, allergen warnings or even virtual "try-ons" for beauty products. This enhances the shopping experience and provides immediate answers.
- AI-Driven Inventory Management: Ensure popular items are always in stock, preventing lost sales due to empty shelves — a critical in-store frustration.
Strategic Imperatives for In-Store Share Leadership
- Differentiation is Non-Negotiable
How does your product stand out on a crowded shelf? It's not just about packaging; it's about the brand story experience. Can you create a unique scent, sound or visual cue that makes your brand instantly recognizable? Do you know how to measure your brand equity in store?
- Self-Disruption
Don't wait for competitors to innovate. Continuously experiment with new display formats, interactive elements and merchandising strategies.
- Local Relevance
Beyond national campaigns, tailor your in-store promotions and product assortments to specific regional preferences or local events. Hyperlocal brands thrive on shared community values – can your national brand tap into that?
- AI Requires Vigilant Management
Ensure your digital assets (product information, brand story) are consistent and accurate, as AI will pull from these sources. Also, monitor how AI-driven recommendations or smart shelf technologies are impacting your brand building.
- Regular Brand Health Monitoring (In-Store)
Use brand equity insights, sales data, shopper insights and even eye-tracking studies to understand how consumers are interacting with your brand in-store. Are they finding your products? Are you brand building with your displays?
The retail landscape for CPG and food is dynamic, but it's also ripe with opportunity for commerce marketers willing to embrace innovation. By focusing on authentic differentiation, leveraging AI strategically and creating truly engaging in-store experiences, brands can not only navigate disruption. They can harness its transformative power to build stronger, more resilient connections with consumers right at the point of purchase. The rhythm of the universe is disruption; the rhythm of your sales should be growth.
About the Author
Brian Owens is managing director of strategy and insights at BAV Group. BAV Group is a WPP and VML consultancy with expertise in consumer insights and data-driven brand and marketing strategies. Its strategic consulting services harness the power of WPP's proprietary BrandAsset Valuator (BAV) — a global database of consumer perceptions of brands.
