The way Chris Riedy sees it, this is either a very exciting time to be in the consumer packaged goods (CPG) industry, or a really scary time. What’s creating these two views of the industry is the fact that it is undergoing a tremendous amount of evolution that creates new opportunities, but the playbooks that used to work are much less effective today.
Riedy, who is Chief Revenue Officer at Ibotta, points to one significant development that is spurring this evolution: the consumer today has much more choice. As consumers take an omnichannel approach to shopping, it’s no longer enough for CPG brands to get distribution at the right grocery store, on a good aisle, and with good shelf placement.
That’s because consumers are now making multiple stops at multiple retailers or skipping the shopping trip entirely and using delivery services instead. This environment has made brand loyalty increasingly challenged, according to Riedy.
Ibotta seeks to help brands better reach consumers through its Ibotta Performance Network (IPN), distributing exclusive offers on the cash-back app, as well as various third-party digital properties including Walmart, Instacart, Family Dollar, Uber Eats, and many others. Brands can reach more than 200 million consumers through the Ibotta Performance Network.
Riedy said the goal is to help the CPG drive growth in a profitable way and help retailers drive value to their customers. But at the heart of it is the American consumer, who Ibotta helps find deals at a time when affordability has become a bigger priority.
“Our goal is to make it easier for consumers to find value in the places they already shop, while helping brands run promotions they can measure and learn from,” Riedy said.
In 2021, Ibotta expanded its existing relationship with Walmart through a multi-year partnership, becoming Walmart’s exclusive third-party provider of digital item-level rebates on Walmart platforms.. Last month, it announced a partnership with 7-Eleven, allowing it to make a push into the massive convenience store space.
The Proof is in the Data
One of the developments that Riedy finds most fascinating in this new era is that even the big American heritage brands that are synonymous with their category can no longer be guaranteed brand loyalty. In the past, their market position was so strong that they could keep their prices unchanged or even move them up a little bit without denting that loyalty, but that is no longer the case.
Riedy said that roughly two out of three shoppers will prioritize price over brand loyalty today. Ibotta is trying to help brands navigate this reality by looking at what sort of discount would influence a consumer to buy their product or increase their basket size from one product to two or two to three.
“The important thing is having enough information to understand how different groups of consumers respond to different types of promotions,” Riedy said. “That gives brands a stronger foundation for determining what kind of offer may be effective in driving a desired behavior.”
Ibotta will run the data through models to determine the required discount that would get a shopper to, for instance, try a product they don’t normally buy. Third-party data partner Circana has shown that campaigns run on Ibotta’s Performance Network average a 7X sales lift compared to total store benchmarks.
“If you don't have access to data, it makes it harder to forecast what will happen in the future,” Riedy said. “Having that access to all that data is one of the things that compels brands. Because when we go sit down with them, we're not just saying, hey, it's back to school, so do this thing. We're saying, hey, it's back to school and here's what we've seen from our shoppers over the last few years around this time of year as it relates to the categories you're most interested in.”
If Ibotta delivers profitable growth to the CPG brand, the brand starts to think about promotions much differently, according to Riedy. Rather than being an isolated tactic that brands might do when they launch a product or when something's not moving off the shelves, it instead becomes part of their always-on marketing strategy.
Finding the Right Partners
When Riedy looks at Ibotta’s new partnership with 7-Eleven, he sees a synergistic relationship between the two companies. He notes that 7-Eleven is really interested in driving the digital penetration of its business and driving value to its customers, which is what Ibotta specializes in helping its partners do.
Riedy said the company is currently going through the process of understanding the behaviors and patterns of the 7-Eleven consumer so that it can take the data and build the right offers for a given brand that will drive profitable revenue growth.
“I am really excited about this because of how important the convenience channel is, especially to that sparkling beverage company, that snack company,” he said. “This is a massive, massive opportunity.”
He notes that when brands are looking at potential partners, it’s important they find other brands that are aligned with their goals and have skin in the game, so they win when you win. He points out that Ibotta only gets paid when it sells a product on behalf of a CPG.
“We have a strong alignment just through our business model,” he said. “And then we fully appreciate that in the day we're in today and as we go forward, proof is incredibly important to marketers. You can't just say this kind of worked, or we think it worked, trust me. You must be able to show an artifact of data in a dashboard from a third party.”