Customer acquisition cost (CAC) has become one of the biggest challenges in retail. With increasingly fierce competition, market saturation, and changes in advertising platform algorithms, acquiring new consumers has become more expensive, requiring more effective strategies to optimize long-term return on investment (ROI).
The rise of digital commerce has intensified this battle for attention and advertising space. Today, retailers compete not only with major traditional retail players but also with marketplaces like Amazon and Mercado Livre, which impose high fees for platform sales and heavily invest in marketing. Additionally, the cost of digital tools, essential for conversion and personalization, also impacts company budgets, making the scenario even more challenging.
What is the result of such a complex equation? The final profit margin — the so-called bottom line — has been increasingly pressured in retail as managers strive to balance growth investments with operational efficiency. Thus, brands face high operating costs, increased competition, and ever-evolving consumers, making it difficult to maintain viable operations.
However, it’s possible to achieve more profitable margins with strategies that increase conversion and reduce customer acquisition costs. One of the most effective paths is the smart combination of paid media and organic strategies, such as SEO and content marketing. But here, attention is required: how these approaches are used makes all the difference in results. Paid media, when poorly targeted, can become an expensive and unsustainable investment.
I like to use an analogy from the fitness world: relying exclusively on paid ads is like an athlete using steroids without a proper training and nutrition routine. The growth may be rapid but unsustainable, and the ultimate cost is high. In retail, this translates to excessive investments in Google Ads and social media sponsorships without efficient control, resulting in a high CAC and compromising profitability, both short- and long-term.
On the other hand, organic marketing is a long-term strategy focused on solid, efficient, and sustainable growth. Investing in SEO, relevant content, and organic ranking helps attract qualified customers without the high costs of paid media, reducing CAC and generating a steady flow of leads—resulting in more efficient conversion—like someone who decides to change their lifestyle and adopts a consistent routine of exercise and a healthy diet.
In short, in a highly competitive market like retail, an investment model focused on efficiency and sustainability is key to steady and profitable growth. For this, managers must be aware that personalized communication, data use, and automation to optimize the customer journey, along with retention strategies like loyalty programs, are essential to reduce waste in advertising campaigns and maximize the bottom line in a balanced way. The pursuit of profitability can be challenging, but with the right methods, it is achievable and scalable.
*Renato Avelar is a partner and co-CEO of A&EIGHT, a high-performance end-to-end digital solutions ecosystem.
