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What is the role of agencies amid the changes in retail?

CEOs of Brazilian companies participate in NRF 2024 to map insights and assist in the journey of retail media and experience enhancement.

Meio & Mensagem

Bárbara Sacchitiello

February 26, 2024

Among the over 40,000 people who navigate through the aisles of the exhibition and conference rooms of Retail's Big Show 2024, professionals from retail companies, as well as from technological startups and financial solutions, still represent the majority. However, advertising professionals are beginning to occupy spaces at the world's premier retail event, albeit in an incipient stage.

For agency leaders, being at NRF is an opportunity that combines two advantages: getting close to the topics and issues that currently drive business and exchanging ideas and experiences with other professionals, while also later bringing this knowledge to clients, whom they are tasked with helping to build communication strategies.

"We see a growing movement of media outlets and agencies [at the event]. Retail has suffered a lot in recent years, and advertising solutions have evolved from mere campaigns to include service and experience ideas. Therefore, attendance at NRF is also considered relevant on our calendar," believes Glaucia Montanha, CEO of Artplan SP and CEO of Convert Digital Business, both part of the Dreamers Group.

Being able to meet different company profiles, observe industry trends, and delve into the pains of retail segment clients are the main opportunities that Retail's Big Show offers agency professionals, according to Thiago Bacchin, CEO of Cadastra. This is especially important because, according to him, retail is susceptible not only to macroeconomic fluctuations affecting all sectors but also to the specificities of each sector, whether it be clothing, food, or the pet segment. "Thus, the complexity and the need to delve deeper into the details of the challenges of each sector to achieve better results are other issues that arise strongly," explains Bacchin.

New Technologies, Old Issues

Among dozens of panels and speeches addressing the use of artificial intelligence, business opportunities in retail media, and the importance of experience, professionals end up glimpsing the scenario that retail companies will face in the coming times.

However, some perspectives are far from new. Marcelo Tripoli, CEO of Zmes and a longtime attendee of the NRF conference, recalls that the issue of omnichannel has been present in conference rooms for years. In 2024, however, the way this issue is addressed has changed slightly. "Omnichannel has been talked about for a long time, but today, that term is no longer used. Today, what is highlighted in virtually all keynotes is the concept of consumer centricity, which is also not new but gains more strength when we think about putting the consumer at the center to serve them and have the ability to meet their needs whenever, wherever, and however they desire," comments Tripoli.

Regarding the challenge of serving customers through multiple channels (physical store, e-commerce, social media, and other platforms), Thiago Bacchin from Cadastra analyzes that the challenges for retail brands this year are the same as in previous years: being able to apply cultural, process, mentality, execution, and strategy changes in a real integration.

"A brand cannot have different prices on its e-commerce and physical stores, harming the margin of one channel to bring growth at any cost. We can no longer have the old fight between sales force and digital channels. It seems old-fashioned, but it still happens a lot," points out Bacchin.

The Importance of Agencies in Retail Media Consolidation

The agency professionals present at the 2024 edition of Retail's Big Show have also witnessed how retail media is an omnipresent theme in the sector's panels and discussions. A market that generated $45 million in 2023 and is expected to grow by about $10 million this year truly cannot be ignored, as highlighted by Glaucia from Artplan.

"This is a revenue stream as important as product sales. Retail has collected a lot of data in recent years, understood the importance and richness of these assets, and began to organize them more effectively," says the executive.

And, in this movement, it is not only brands that, with retail media, will have access to a new source of revenue. According to Glaucia, agencies are also jumping on the bandwagon. "For agencies, it is an excellent opportunity to offer solutions and services, whether to include in their deliveries and CRM or to create solutions for customer recurrence and loyalty. We gain another possibility of connecting the consumer with the brand," she believes.

Tripoli shares the idea and cites an example from Zmes itself, which was responsible for the work of Raia Drogasil's Ads platform. "Agencies play a fundamental role in this process because orchestrating the transformation of a retailer into a vehicle is not trivial. And agencies know this dynamic well; they know how to assemble, price, and develop marketing. It has been one of our missions to help companies, which have consistent first-party data work, monetize it in the form of media."

The CEO of Zmes further adds that the prominence of the retail media topic at NRF 2024 is not just a matter of trend but rather a more urgent business strategy. Due to its generally low margin, retail sees advertising space sales as an alternative revenue option with low implementation costs. Additionally, Tripoli mentions other advantages. "The first is the best targeting strategy, as the focus is really on those who already buy the products. And the second is sales measurement in offline channels. In other words, retail can improve the consumer experience on one hand and the company's revenue on the other," he explained.

Marketing and the Retail Appeal in 2024

Regarding communication challenges, agency leaders point out that conversations at NRF indicate something that was already known to industry professionals: more than ever, a company's communication needs to be aligned with its audience.

However, this is a mission that is far from simple, according to Bacchin from Cadastra. "Aligning brand communication with the public is increasingly complex because in our digital economy era, there is no longer a way to consider a target audience as common or generic," he analyzes. To find the solution to this equation, according to him, it is necessary to identify audience groups and establish communication of value, paying attention to societal demands, especially social and environmental ones.

For 2024, Glaucia sees the main task of communication agencies as the act of rebuilding brands in retail, something she believes has been neglected. However, this needs to be tied to a relevant value proposition. "Consumers are becoming increasingly aware of the brands they consume, not only of the product they deliver but also of the purpose they carry, and this needs to be widely discussed and aligned," she adds.

Article originally published in Meio&Mensagem.