Hyperconnectivity: The Future of CPG Shopper Engagement

As inflation cools, the consumer packaged goods (CPG) industry faces a renewed challenge: reigniting growth in a market where consumers are spending more and buying less. Brands are betting big this year that digital marketing will be the answer. According to eMarketer¹, CPG digital ad spending in the US is projected to reach $49B in 2024, a 36% increase from the previous year.

That’s translating into a proliferation of consumer touchpoints. McKinsey warns that this fragmentation, combined with inflation, will have an outsized impact on CPG profitability over the next decade². Without a well-defined digital strategy that takes advantage of our hyper-connected marketplace, brands risk diminishing returns on their marketing investments.

Navigating the digital media maze

Marketers can’t rely on what’s worked in the past. As the consumer journey has become more complex, so have the ways to connect with them. Eighty-five percent of shoppers use multiple devices across a dizzying array of channels, platforms and formats, leading to marked shifts consumer behavior. New players are emerging, while some traditional channels are gaining favor again: Connected TV (CTV) usage surpassed linear TV this year³ and TikTok’s 170 million US users are spending an average of 54 minutes a day on the platform⁴, nearly twice as much as Facebook⁵. Additionally, in-store coupon usage is on the rise for the first time in years⁶.

AI: The not-so-secret weapon

Consumers are inundated with brand messaging, most of which they say doesn’t resonate with them. CPG marketers need to lean into artificial intelligence (AI) and machine learning so that their omnichannel messaging cuts through this clutter. AI facilitates smoother engagement between CPG brands, retailers, and shoppers at a time when customers expect a seamless and frictionless experience across all channels.

AI-driven data ultimately can help determine channel flow from TV to mobile to out-of-home. By identifying underperforming and overperforming channels, marketers can optimize spending in real time with current, lapsed and category users.

For example, Super Coffee was looking to expand beyond its direct-to-consumer subscription model and drive trial with new buyers from the ready-to-drink coffee retail aisle. As a low-sugar alternative in this category, they were looking to find and reach healthier shopper segments underserved by competitors. They partnered with Catalina to create an omnichannel campaign across CTV, digital, and in-store promotions, and optimize accordingly. Using real-time purchase insights and shopping behaviors, they were able to reprioritize their budget toward audiences driving lower-cost conversion. Messaging that delivered trade-up promotions to all brand buyers built consumption and loyalty, resulting in 195K purchases against a $4.70 return on ad spend (ROAS).

Hyperconnectivity drives results

Research underscores how brands with exceptional omnichannel customer engagement can significantly reduce costs and boost sales. A seamless omni-driven campaign can translate into a 10% annual increase in revenue and an 8% yearly decline in cost per contact.⁷

To meet the evolving expectations of today’s shoppers, brands should partner with data analytics experts to achieve AI-enhanced hyperconnectivity. Early adopters will reap the rewards of embracing this unified approach to accelerating the connection between activations throughout the shopper ecosystem.