As of 28th February 2023, grocery inflation reached above 17% for the first time. It's important to look into how this impacts our day-to-day life, and how the commerce world will be reviewing its approach to sponsored advertisement and the use of elevated placements.
Times are tough, and sacrifices are being made in every day scenarios, including the weekly grocery shop. Brand loyalty is being questioned and FMCGs have to act now!
Here is what we're seeing so far:
- 40% of shoppers have already opted for a cheaper alternative to their usual brands in grocery
- 70% of brands are now depending on Retail Media to continue growth
- 45-50% of traditional UK grocery generate sales through the first row of products on site - 70% from the first two rows
For FMCGs, Retail Media has never been more important, and with the current rise of living costs, it's more important than ever to establish/re-establish, retain or regain your customer share online.
When we consider that 45% of purchases are made from the first two products, and that 40% of shoppers are already switching to cheaper alternatives, it provides reason to believe we may see a big revenue drop for FMCGs whose organic ranking and visibility across site is quite poor. This does, however, provide an opportunity to drive incremental growth for FMCGs who are interested in supporting paid media to remain relevant, gain rival consumers and dominate their categories.
At VML Commerce, we have a team of specialists who are continually working to understand and develop strategies to cater to these real world problems, and ensure we have real world solutions. No template fits all, and our specialist team with over 30 years' experience intends to support the growth of all FMCGs who are keen to utilise this hot property and achieve their yearly growth goals for 2023.
Get in touch with our team to find out more.
