Let’s face it, it’s still early innings for the Retail Media and eCommerce space.
Retailers and brands alike have been so focused on adapting their own offering to meet an ever-evolving industry and customer, that the notion of taking time to ideate and create industry standards has fallen by the wayside.
This lack of consistency makes it increasingly difficult for brands to aggregate datasets, compare retailer and channel performance and ultimately, make ROI-driven decisions.
In this blog, we look at the key external factors hindering standardisation, how brands are restructuring to foster cohesion and the role retailers and data providers will play in driving governance and standardisation.
1. Immature, Explosive Market
Retail Media has exploded since 2020. Leading platforms like Walmart, Instacart, and CitrusAds are all big profit drivers, but are completely siloed.
Currently, there is no incentive for retailers to create a universal set of KPIs and candidly, they can move a lot faster without collaboration. Unlike content and imagery standards (GS1*), Retail Media has no governing body driving universal standards – it is often easier for a third party to drive these initiatives.
The variance in KPIs/metrics across retailers is huge. One striking anomaly is Instacart – unlike any other retailer, Instacart defines ROAS as simply adding product to basket. It’s variances like this that make comparing performance/ROI so challenging across platforms.
But there is hope. Walmart acknowledges the need to introduce standardisation as their customers are increasingly asking for this. Tech partners, like us, are helping drive this motion and brands, particularly challengers, know they need standardisation in order to win – so the movement is gaining momentum.
2. Recession Propels Retail Media
Macroeconomic headwinds are actually driving Retail Media. As it’s lower funnel and directly tied to purchase, investment is increasingly being moved here.
Both DTV and Retail Media have been the two headline winners during the recession due to their ability to create such refined targeting and focus on highest margin/profit products.
Particularly highlighted in today’s economy and through the wide adoption of pricing algorithms, price has become commoditised. So the big focus is now on understanding shifting behaviours and how people buy and where they buy. Retail Media is increasingly focused on discoverability – capturing your audience and precisely targeting with the right product and right price. Furthermore, generative AI is helping create even more targeted ads, and this optimisation will only drive more investment into Retail Media.
3. Mastering full-funnel tracking is key
Despite all of the growth, full-funnel measurement remains the biggest challenge. This is why AMC is so attractive to brands, particularly with the death of cookies, as these walled gardens are even harder to track.
How people discover products is also fundamentally challenging. TikTok, Instagram, YouTube and Influencers are increasingly driving product discovery, and we predict this trend will continue to accelerate rapidly and drive brands to place the focus on the audience rather than the channel.
“What brands are asking for is omnichannel, but what they really want is audience” – Melissa Burdick, Co-Founder and President, Pacvue
We believe that this massive transition to more social/influencer-driven sales will drive big brands to focus more on M&A, as they simply cannot be agile enough to stay on the pulse with rapid market and consumer shifts.
This evolution of customer buying journeys is giving advertisers more choice than ever before on which channel and ad type to use to influence a buying decision. It is therefore key for brands to [master full-funnel tracking] to ensure customers see a consistent brand story/image across the buying journey and they understand the true path to purchase.
4. How brands are adapting
We work with some of the biggest brands globally, and are seeing a common transition happening. One of the biggest problems leading to data silos and a lack of standardisation, stems from internal structures. Traditionally, most brands have had dedicated Advertising and Sales teams, but we are now seeing brands creating dedicated Customer teams.
This new team structure provides a much more streamlined view of all customer data, removes silos between internal teams and drives standardisation of metrics and reporting.
5. The role of retailers and data partners
This current state of standardisation is not a surprise or an unknown to retailers. The problem with silos and standardisation is, by their very nature, they do not have a single owner or source of accountability and thus lay dormant. However, retailers are now starting to respond to the growing pressure from brands and see the value in driving common standards that provide greater visibility and integration across the market.
To solve this, retailers are increasingly turning to data partners, like Pacvue, to provide market-wide, agnostic guidance and insight. Pacvue Co-Founder and President, Melissa Burdick, sits as an advisor to Instacart, helping keep them on the pulse of customer trends, market shifts and customer buying habits. This symbiotic relationship between data partners and retailers is key to ideating around what a gold-standard, universal reporting structure would look like.
6. Identify and resolve your data silos
Data silos are predicated on teams controlling and isolating data. The first step in solving data silos is identifying them (Deloitte, 2022). Be the data hero with our customised report – helping you to understand and resolve where data breaks exist, where teams and platforms are not syncing and where there are clear opportunities to unify data sets and drive standardisation.
Speak with one of our experts to receive a customised Data Silos report with actionable insights and recommendations.
1GS1 Standards: https://www.gs1uk.org/standards-services/standards
