By: Matthew Piazza
Published: July 12, 2024 | Updated: July 12, 2024
Read time: 3 minutes
Introduction
Good businesses grow and revenue is the lifeline on which any business depends for that growth. Retailers as well as consumer goods companies (CPGs, also known as fast-moving consumer goods companies), face many challenges today. While most agree that finding new ways to generate revenue is important, the question is how.
In two recent Mastercard-commissioned studies, Forrester Consulting surveyed decision-makers at retailers and marketing leaders in the CPG industry around growth and revenue diversification. In the first, Forrester interviewed 326 retailer decision-makers around the world to assess how revenue diversification strategies can unlock sustainable growth. Separately, Forrester Consulting surveyed 319 global B2C marketing leaders in the CPG industry on the current state of retail media network (RMN) strategies. The results included common threads about how essential revenue diversification has become for both CPGs and retailers alike.
Here are four takeaways from the studies.
1. Retailers see new revenue streams as essential
Consumers expect speed, simplicity and quality. Brands must transform to meet these expectations and many are turning to revenue diversification as the key.
- 65% of retail decision-makers are finding it harder to respond to rapidly changing consumer expectations compared to previous years
- 76% agree that finding new ways to generate revenue outside of traditional methods is essential
- 44% see new revenue streams as a way to unlock data to improve their ability to anticipate and respond to consumer expectations proactively
2. Retail media networks (RMNs) are growing in importance for both retailers and CPGs
RMNs help retailers diversify revenue and enable CPGs to access first party data. With their growing role, RMNs are becoming a crucial factor now and in retailers’ future marketing budgets. Rigorous testing and measurement can lead to impactful results on revenue, helping businesses achieve their goals.
- Regarding RMNs' value in growing revenue and diversifying revenue streams, 74% of CPG respondents believe RMNs to be integral and 76% of retail respondents deemed diversifying revenue streams with RMNs as important
- 41% of retailers have implemented RMNs to diversify revenue today, another 16% are currently testing RMNs on a small scale and 25% plan to implement RMNs in the next 12 months
3. Testing RMN strategies on a small scale is key to ensure success
Insights into the consumer are helpful, but they are just the start. Data solutions should provide actionable recommendations based on those insights.
- 84% of retailers say they need to test these strategies on a small scale before implementing them broadly
- 76% of CPG respondents agree that to take advantage of the benefits that RMNs can offer, their organization must accurately test and measure the initiatives with unbiased, analytic precision
4. Partnerships can maximize impact
Sometimes it's best to team up with an expert. Partnering with third-party providers can offer greater insights and create a new revenue stream outside of the core business. Of course, there is room to grow as CPGs and retailers can also look to better collaborate in data sharing and analysis to maximize the value of RMNs.
- 65% of CPG respondents report difficulties determining how to best spend money on RMNs to maximize ROI. Lack of data team bandwidth (55%) and skills (48%) are other common difficulties
- 64% of CPG respondents plan to fill in gaps and partner with an organization that can help them gather, test and measure current and potential RMN investments
- Guided by data insights from third-party solutions, retailers can more confidently identify the right revenue diversification efforts, testing new initiatives in market (52%) and evaluating the performance of new products (44%)
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