The customer acquisition cost (CAC) has become one of the biggest challenges in retail. With the competition becoming increasingly fierce, the saturation of the market and the changes in the algorithms of advertising platforms have increased the cost of acquiring new consumers, which requires more effective strategies to optimize long-term return on investment (ROI).
The rise of digital commerce has intensified this competition for attention and advertising space. Today, retailers compete not only with large players in traditional retail, but also with marketplaces like Amazon and Mercado Livre, that impose high fees for sales on the platforms and invest heavily in marketing. In addition to that, the cost of digital tools, essential for conversion and personalization, also impact the companies' budget, making the situation even more challenging.
What is the result of an equation as complex as this? The final profit margin — the so-calledbottom line —has been increasingly pressured in retail, as managers seek to balance investments in growth with operational efficiency. Logo, brands face high operational costs, greater competition and a constantly changing consumer, what hinders the maintenance of viable operations.
However, it is possible to achieve more profitable margins with strategies that increase conversion and reduce customer acquisition cost. One of the most effective ways to achieve this is the smart combination of paid media and organic strategies, how SEO and content marketing. But at this point, attention is needed: the way these approaches are used makes all the difference in the results. Paid media, when misdirected, it can become an expensive and unsustainable investment.
I like to bring an analogy from the worldfitness: the exclusive dependence on paid ads is like an athlete who uses steroids without a proper training and nutrition routine.Growth can be rapid, but not sustainable, and the cost in the end is quite high. In retail, this translates to excessive investments in Google Ads and sponsorships on social media, without efficient control, resulting in a high CAC and compromising profitability, both in the short and long term.
On the other hand, organic marketing is a long-term strategy aimed at solid growth, efficient and sustainable. Invest in SEO, relevant content and organic ranking allow attracting qualified customers without the high costs of paid media, reducing CAC and generating a continuous flow of leads, which results in a more efficient conversion – like that person who decides to change their lifestyle and adopts a consistent exercise routine and a healthy diet.
In summary, when we talk about a market as competitive as retail, a model of investment focused on efficiency and sustainability is the key to constant and profitable growth. For that, managers must be aware that personalized communication, use of data and automation to optimize the consumer journey, in addition to retention strategies, how loyalty programs are essential to reduce waste in advertising campaigns and maximize thebottom linein a balanced way. The search for profitability can be challenging, but with the right methods it is possible to be achieved and expanded.
