Retail Media Distinct and Different
Following up on my piece on distinguishing and promoting Distinctiveness and Differentiation, I was asked what research exists and would be needed to apply it to an exploding field: retail media.
Retail media is “marketing to consumers at or near their point of purchase, or point of choice between competing brands or products”. My example throughout this blog is Amazon, where the majority of US consumers start their product search and some consumers purchase the product. Indeed, retail media can be leveraged at different stages of the consumer decision journey
Called the 'third wave in digital advertising', retail media is on the rise:
As the Financial Times writes: “From Woolworths Group in Australia to Canada’s Loblaws, retailers in a range of global markets are with varying degrees of success positioning themselves as compelling ad venues for the world’s biggest consumer brands. The phasing out of third party cookies has had less impact on retailers since they do not need to collect information from users on other websites." Matt Krepsik, CEO of Quotient, commented: “the information that retailers can glean about users is “much more valuable” to marketers than other forms of digital ads. It’s a level up from the social platforms.”
But how does retail media fit into your brand's distinctiveness and differentiation?
Many have commented that retail media is like shelf space, and i am happy to run with this analogy for this paragraph. In offline retail, large brands typically focus on ensuring distinctiveness: you want to make it easy for consumers to find your brand, so you stand out on the shelf with your distinctive assets. Likewise, online retail first focuses on shelf-like recognition and ensuring your consumers do not at the last moment switch brands. Always-on retail ads should be especially useful for promoting and sustaining distinctiveness – which may be a key reason for the high effectiveness we reported for this strategy. Within Amazon ads, Sponsored Products meet audiences when they are actively browsing in your category. For instance, the above Figure shows a Sponsored Ad for Jack & Jill when the consumer searched for 'baby care'. Increasing conversion
However, you can also promote differentiation in offline retail by moving beyond the shelf, offering bright end-of-aisle displays and demonstrations. In online retail, the same Jack & Jill can appear in a Sponsored Brands ad, which allows the brand to go much deeper into its differentiated offering:
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In offline retail, such advertising is likely to reach audiences that have not heard about your brand yet, and before they enter your aisle. Likewise in online retail, Sponsored Brands and Display work especially well for up-and-coming brands to shake consumers out of their inertia and help them consider. In a large-scale study with 122K brands/browse nodes across Amazon verticals, brand awareness
Retail media also shows strong synergy across the online consumer decision journey. For example, Sponsored Ads and Display work together to reduce time to revenue baseline by 24% in Germany (figure below). In addition, as many Amazon shoppers purchase in multiple product categories, brands who want to reach new customers can use Amazon Ads to convert adjacent categories’ shoppers with high purchase propensity effectively. This study builds on our US-based paper in the Journal of Applied Marketing Analytics, and greatly expands my academic publications on online synergy.
Finally, consumers who research at an online retailer, may convert offline (webrooming). In another study collecting off-Amazon sales in ten product categories, we find that for every ten customers who research on Amazon, 17 other research on Amazon but buy off-site. Moreover, customers who research more on Amazon, were more likely to buy, either on Amazon or off-Amazon. To drive the latter part of off-Amazon sales, we recommend using Sponsored Display, DSP Display, Sponsored Brands, Sponsored Products, and an always-on strategy
Future research should (1) quantify the offsite sales impact of non-endemic advertisers, and (2) distinguish the extent to which the advertising message promote distinctiveness vs differentiation.
In conclusion, retail media offers a new channel for brands to promote both distinctiveness and differentiation. However, much research is needed to understand the distinction in this channel, and to provide actionable insights for both endemic and non-endemic advertisers. For instance, Prof Bernd Skiera, Jochen Reiner and Orian Mahlow find that substantially higher sales effects, and lower cost-per-click for Amazon Advertising than reported in past online advertising literature. Does this effectiveness and efficiency benefit also work for non-endemic advertisers? Moreover, how can retail media data best leveraged by brands to reach the right audience at the right time with the right message, with user consent? And of course, how incremental is retail media impact in the channel ecosystem of non-retail offline, search and social media?
Ad-Fraud Investigator & Media Expert, member of Digital Forensic Research Lab cohort "Digital Sherlocks" - Adding some fun when asking unexpected questions you were not prepared to hear
1yRM is not just on-site on- or off-line, but alos the activation of customer profiles on off-site channels. The main benefit if solely done on-site: RM is like a walled garden, brand safe and only addressing real humans, that means that adfraud should be a lesser problem. If reach is fine, I'd invest more in RM than in open web or social media.
Realtor Associate @ Next Trend Realty LLC | HAR REALTOR, IRS Tax Preparer
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What's the balance between advertising and shopper utility? At what point to shoppers look somewhere else and let their Prime memberships lapse?