To succeed as a CPG brand in the post-pandemic world, you need to get phygital.
After two years of pandemic-driven online shopping, many consumers are stepping back out into the world and into physical stores. In fact, average transaction values in-store were 10% higher in July 2021 than in March 2019. Now, instead of one or the other, consumers are using both offline and online channels seamlessly within the same buying journey. As research firm McKinsey puts it, “the in-store customer, going forward, will be someone who is hitting all the different channels and touch points that a brand or retailer has.”
With all the product options available combined with an overly cluttered media landscape, CPG brands need to stand out, especially to convert first-time or occasional buyers into loyalists. This means these marketers need a truly omnichannel, flexible advertising strategy that bridges both online and offline channels as more shoppers start toggling between the two again.
“Phygital” is the term being used to describe this blending of physical and virtual to provide more immersive, interactive customer experiences. It’s only made possible with advanced data sources that tell you more about behavioral trends and consumer movement patterns as they evolve in real time. Armed with this information, CPG brands can activate media at the right times and places to reach their audiences where they are spending time today, both offline and online.
Advertisement
Identifying Your Audience IRL
CPG marketers have the ability to extend the same audiences they target online into the offline, physical world for a holistic omnichannel approach using channels like out-of-home (OOH). Observing consumers’ physical behaviors through anonymized GPS location data helps marketers identify customers’ new movement patterns, which indicates a lot about their interests, preferences and characteristics.
Solutions exist that specialize in collecting device ID data, then matching it with ad logs to identify the devices that were near a screen at the exact time a brand’s ad was served. The IDs are then processed and anonymized with stringent privacy standards for retargeting or measurement.
This data doesn’t just inform CPG marketers about their audiences but also empowers them to reach these people with key messaging in the physical world, at peak times. For instance, brands can use location data to identify certain personas that frequent specific locations and then begin building their audience pool as individuals visit these places.
Looking at all of these consumers in aggregate, similar behaviors and movement patterns emerge that can then be used to generate audience heat maps displaying how the defined audience moves throughout the day to assess their affinity. Based on habitual patterns over time, programmatic technology can analyze the specific times and areas a desired audience has the highest propensity to be and readily activate the right OOH screens at opportune moments across the entire buying journey.
Examples specific to CPG marketers include targeting budget shoppers who visit stores like Walmart or Marshalls, or millennial parents who visit grocery stores, child care centers or indoor play spaces.
Digital out-of-home (DOOH) is uniquely capable of achieving this execution of phygital, as it amplifies brand engagement through the strategic placement and timing of messages on screens that fall into the locations and times determined by the audience affinity analysis. What’s more, consumers are more likely to engage with content retargeted to them on mobile devices if they have previously seen related content on a large screen, such as on a digital billboard or urban panel, in a public place.
Given that omnichannel customers shop 1.7 times more than single-channel shoppers — with grocery shoppers in particular spending on average 20% more — it pays to leverage DOOH as a backbone of omnichannel strategies for both upper-funnel and lower-funnel performance.
Getting in Front of Audiences, Both Online and Off
CPG marketers can layer on additional targeting parameters, such as point of interest (POI) data, to more finely pinpoint proximity as part of their phygital strategy. This type of targeting allows CPG brands to surround their desired points of interest, such as a particular grocery chain at which their product is sold, by activating media within a specific radius around those locations.
Think of this data as a map of the world that shows you the information you need to identify new B2B or on-premise customers in places such as restaurants or hotels, as well as better understand the attributes of existing customers to optimize field sales activities. POI data can also help CPGs optimize vending machine placements, physical site selection and enhance delivery routes.
Marketers can further leverage point-of-purchase inventory to run ads on DOOH screens in key locations right before a purchase is being made. Digital signage extends to in-store activations, such as atop kiosks, in checkout aisles or on shelves, giving CPG marketers a chance to reach customers at the point of sale without competing against an oversaturated online environment. CPG brands can also utilize advanced targeting and reporting capabilities to shift parameters and optimize campaigns in real time.
Measuring Phygital Performance
By knowing precisely when and where an ad is displayed as well as who is in the vicinity and able to see it, brands can analyze the behaviors of their exposed audience to understand digital campaign impact on real-world actions — such as how the campaign steered consumers to retail locations that sell their product during big in-store sales and special promotions.
As CPG brands continue to ramp up advertising spend, they should reconsider their media mix to align with a phygital strategy. While mass reach channels such as TV and radio will continue to perform well for this vertical, location-driven physical advertising like DOOH provides a powerful way for CPG marketers to engage shoppers at points during their day when other channels aren’t available.
At a time when it’s more important than ever to be top-of-mind for consumers, expanding your omnichannel strategy can help brands maintain constant presence with relevant messaging at crucial moments, getting them ahead of competitors right out of the gate.
Marissa Bernstein is Director of Marketing at Vistar Media, Demand (Brands and Agencies). Prior to Vistar, she was Senior Manager, Brand Marketing at Forbes, and was also Manager, Brand Partnerships at Vox Media. She holds a B.S. in Telecommunications from the University of Florida.