The customer acquisition cost (CAC) has become one of the biggest challenges in retail. With increasing competition, market saturation, and changes in advertising platform algorithms, acquiring new customers has become more expensive, requiring more effective strategies to optimize long-term return on investment (ROI).
The rise of digital commerce 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, which impose high fees for sales on their platforms and invest heavily in marketing. In addition, the cost of digital tools, essential for conversion and personalization, also impacts companies' budgets, making the situation even more challenging.
What is the result of such a complex equation 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. Logos and brands face high operational costs, increased competition, and constantly evolving consumers, which makes maintaining viable operations difficult.
However, it is possible to achieve more profitable margins with strategies that increase conversion and reduce customer acquisition costs. One of the most effective ways to achieve this is through the smart combination of paid media and organic strategies such as 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 poorly targeted, can become an expensive and unsustainable investment.
I like to bring an analogy from the worldfitness: Relying solely on paid ads is like an athlete using steroids without a proper training and nutrition routine. The 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 social media sponsorships, 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, efficient, and sustainable growth. Investing in SEO, relevant content, and organic ranking allows attracting qualified clients without the high costs of paid media, reducing CAC and generating a continuous flow of leads, resulting in more efficient conversion – like that person who decides to change their lifestyle and adopts a consistent exercise routine and a healthy diet.
In short, when we talk about a highly competitive market like retail, an investment model focused on efficiency and sustainability is the key to steady and profitable growth. For this, managers must be aware that personalized communication, data usage, and automation to optimize the customer journey, as well as retention strategies such as loyalty programs, are essential to reduce waste in advertising campaigns and maximize thebottom linein a balanced way. The pursuit of profitability can be challenging, but with the right methods, it is possible to achieve and expand it.
*Renato Avelar is a partner and co-CEO ofA&EIGHT, an ecosystem of high-performance end-to-end digital solutions.
