For those of you who have watched your retail media ROI slip a bit over the past year, there is most likely one cause: the rise in ad costs.
Some industry reports about Amazon ads show that CPCs are rising quickly and 50% year over year.
Even though the channel is fairly new, competition is rising quickly, and marketers know that the old way of doing things isn’t enough. As a result, marketing organizations know that they need to rethink their approaches and strategies to maintain performance in retail media.
Winning strategies will rely more on finding ways to connect unique data with powerful media to meet the full circle of marketing needs and win every shoppable moment.
At Skai, we’re calling this new way forward Connected Commerce Marketing.
Rethinking retail media—evolving to Connected Commerce
We spend a lot of time speaking with clients, prospects, and industry experts on this topic. Only by knowing where retail media is going can we develop the next generation of innovative technology to support practitioners in their efforts.
While the retail media marketers are considering how they plan to evolve, they are rethinking how they organize their teams, their strategies, and how they measure success.
Rethinking silos
The Old Way: Offline/Online.There are disparate online and offline marketing programs. Sometimes we’re able to integrate & measure these efforts together, sometimes we’re not. But we do what we can.
The Connected Commerce Way: Omnichannel. Omnichannel is no longer an “ideal”; it’s a necessity. Our customers are seamless, omnichannel shoppers influenced by online and offline signals/media during their purchase journeys. Whether the actual transaction happens digitally or within brick and mortar doesn’t matter to us—just that it happens.
Rethinking strategy
The Old Way: Experienced assumptions and reactive tactics. Being “data-driven” is the gold standard for decision-making. Which data (and how much) is less important, just that we used some kind of data in our choices.
The Connected Commerce Way: Intelligent. Data-driven, predictive, & validated. We need intelligent insights illuminating decision-making at every stage of the operation to be more proactive & predictive. It will require new datasets that we don’t necessarily have today, but we’re going to get it, get good at it, and we believe it will be our competitive advantage.
Rethinking channels
The Old Way: Channel-centricity. The bulk of our operations is siloed teams managing different publishers or retailers. This may not be ideal, but it works.
The Connected Commerce Way: Consumer-centricity. We will align with the customer, even if it means doing things differently than before.
Rethinking influence
The Old Way: Branding. We can’t influence online shoppers once they enter an online retailer to purchase, so building up our CPG brand to carry that influence into the store is the role of marketing.
The Connected Commerce Way: Full-funnel, relevant, & consistent. Retail media has opened up new, full-funnel opportunities. Now we need to take on the full-funnel playbook and get savvier with how we nurture consumers through their purchase journeys—including within online stores—and not just rely on branding alone.
Rethinking measurement
The Old Way: Traditional attribution. It’s hard to figure out what’s working and what isn’t. Attribution modeling gives us a granular understanding of marketing performance.
The Connected Commerce Way: Incrementality to understand the true impact. New policies and regulations are limiting the viability of attribution. As a result, other measurement approaches are needed, such as incrementality testing.
Are you looking to evolve your retail media program? Talk to us.
As part of Skai’s intelligent marketing platform, our Retail Media solution empowers brands to plan, execute, and measure digital campaigns that meet consumers when and where they shop. Built with best-in-class automation and optimization capabilities, our unified platform allows you to manage campaigns on 30+ retailers including Amazon, Walmart, Target, and Instacart all in one place.
Retail media is now the third-largest digital advertising channel in the U.S. It is forecasted to reach over $30 billion domestically this year, or one in eight digital ad dollars, and $100 billion worldwide by 2024. To get a better understanding of the trends driving this channel, Skai and BWG Strategy surveyed mid-level and senior-level decision-makers who spend a key portion of their week involved in retail media.
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