88% consumers prefer retail media for new products & brands: Report

A new report from Amazon shows that 84% of Indian consumers are actively looking to explore new brands and products, signaling a major opportunity for digital-first businesses. The study highlights that new customers contribute significantly to brand revenues, accounting for an estimated 66% of revenue on average across categories. The study also showed that 88% consumers prefer retail media to try new products and brands.

The report notes that growth brands rely more heavily on new customer acquisition, with 68% of their revenues coming from first-time buyers compared to 58% for established leader brands. Smaller and challenger brands in particular face what researchers call a 'double jeopardy,' where they not only have fewer customers but also lower repeat purchase rates, making continuous acquisition critical for growth.

Consumer behavior also indicates that brand exploration is not limited to festive periods or launches, though spikes do occur. The study found a 3% rise in new customers during festive sales and a 10% increase in the month following a new product launch.

The report also distinguishes between two cohorts of new customers, those new to a brand (N2B) and those new to a category (N2C). While N2B customers dominate in established categories such as grocery and beauty, N2C customers form a larger share in emerging categories like luxury beauty, furniture, and personal care appliances.

The report suggests a three-pillar strategy: ‘Educate’ customers about their needs and how the brand can address their needs. ‘Connect’ with them by building relatability and credibility among the relevant consumer cohort. ‘Drive action’ by building visibility when customers are close to the purchase or need a reminder to buy.

The study shows that shoppers are more influenced by consistent visibility (57%) than discounts alone (43%). Brands using all three tactics (Educate, Connect, and Drive Action) see up to 39% incremental sales growth compared to those focused on a single strategy.

According to the report, retail media has emerged as a preferred channel for trials of new brands, with 88% of consumers saying they rely on these platforms for discovery due to ease of transactions, access to reviews, and product range.

According to Amazon, successful strategies to win new customers hinge on addressing challenges such as a lack of awareness, low understanding of product benefits, and trust deficits and the final push to buy your product.