77% of brand marketers are investing more in retail media in comparison to 2019, according to the Path to Purchase Trends Report 2020.

What was already a fast-growing trend exploded during the pandemic, as consumers adopted digital habits and as retailers’ e-commerce platforms took on all new importance. But while brands are investing more shopper marketing dollars into retail media, 23% still view it as a money grab and 39% say it is equally effective as other digital media. This tells us that there are many challenges to be overcome in order to realize retail media’s full potential. To understand the obstacles and opportunities of this accelerating trend, the Path to Purchase Institute hosted a webinar, sponsored by Inmar, on the topic of Leveraging Retail Media.

To gain a holistic understanding, the webinar featured a panel of experts from both the brand, retailer and solution provider space, including:

• Jennifer Reiner, Sr Director Omnichannel Marketing and eCommerce at Del Monte Foods, Inc.
• John Ostman, Sr. Director eCommerce & Digital Strategy, Jack Link’s Protein Snacks
• Brian Messerschmitt, VP, CPG Media & Marketing, Albertsons Companies
• Aaron Kechley, General Manager, Media & Data at Inmar Intelligence

A dynamic roundtable discussion, Peter Breen, Editor-in-Chief of Consumer Goods Technology EnsembleIQ, posed 10 questions to gain a deeper understanding of the state of retail media. Below is a brief synopsis of the panel members’ responses.

1. How important is retail media at your business right now and how has that changed over the course of the last year or so?

REINER: “Retail media is now truly integrated into the planning process.”

Del Monte had already brought retail media into focus before the pandemic as an early-mover in the space. Reiner started working with their agency to evaluate retail media networks over four years ago so that they could begin to assess it as a possible media investment when they go to build their national brand plans. As they’ve been building that process, Reiner says that assessment of retail media is now truly integrated into the planning process, particularly when planning key initiatives and new item launches.

OSTMAN: “Movement has expedited both in our understanding of the market and how important it is.”

When everything started shutting down due to Covid, retailer media not only become more important to the Jack Link’s business, but the view of what it is quickly evolved. Ostman says that partnerships with retail media teams have become critical to Jack Link’s as the business gains a new understanding of what retail media is. As understanding of the market and its importance grows, they want to leverage retail media in as many places as possible along the consumer journey.

MESSERSCHMITT: “Albertsons Performance Media is about building our CPG brands as much as it is about building the Albertsons brands across banners.”

Messerschmitt explained that retail media is as equally important to their business as a retailer at it is to their CPGs partners, particularly as people consume more digital media. Albertsons has shifted a lot of their own media into the digital performance marketing space because similar to their CPG partners, they see the benefits of hyper-targeting and closed loop measurement. On the brand side, Messerschmitt says that conversations with CPGs, as well as their budgets, are shifting away from traditional media and into digital performance media because they see the power of first-party data and closed loop reporting. As CPGs increasingly begin to evaluate retail media, he wants to ensure that Albertsons is offering the best tools and capabilities to maximize their experience.

2. Is retail media only a shopper marketing tool or is it more than that?

REINER: “We look at retail media where it makes sense.”

While the majority of Del Monte’s retail media funding is coming from shopper marketing and e-commerce, the business looks at retail media where it makes sense and does not view it as a pure shopper marketing vehicle. Now when they do a product launch, the brand teams consider whether retailer media is a better investment than national because it offers a unique opportunity to develop an integrated plan with the retailer that builds on the new item distribution and allows them to drive conversion and directly measure the impact.   

OSTMAN: “It is absolutely more than just a shopper marketing tool.”

While currently, retail media is functioning in parallel with traditional shopper marketing at Jack Link’s, at the same time, his team is working to redefine what shopper means and what it will look like in the next two to three years.

MESSERSCHMITT: “It’s a business and brand building tool.”

Messerschmitt defines retail media as both a business building and brand building tool. He says it’s not about bucketing it into one department or another, but diving in deeper with CPG partners to understand their strategic goals for the year and the best tools and capabilities to jointly accomplish those goals.

3. What are your overall impressions of retail media so far?

REINER: “It’s truly the gold standard.”

Reiner is a big proponent of retail media because she views it as the gold standard in terms of being able to have the first-party sales measurement data. Results have been mixed so far, depending on what retailer they’re working with and how well the campaign was initially set up.

OSTMAN: “There has been great sophistication and speed in terms of the analytics being exposed.”

Ostman is impressed by the data that’s being collected from retail media and the speed at which it being exposed to the brands, and overall, is pleased with the progress they’ve been able to make. He believes that as trust is built through transparent data sharing, notions of money grabbing will fade.

4. Where are you with capabilities development?

MESSERSCHMITT: “We see the next step as focusing on partnering with CPGs on a much deeper level.”

Messerschmitt says that they have introduced several new tools and that CPGs can expect enhanced measurement capabilities from them, including improved granularity, incrementality and real-time availability of the data. Separate from the media though, he sees the next step as focusing on partnering with the CPGs on a much deeper level than they have before to understand what they are missing and how they can improve what they have. “My goal is to be the best in the space, and I’m only going to get there with the help of our CPG partners.” They are now working on building 12-month rolling plans that leverage marketing and merchandising.

5. How do you define retail media?

OSTMAN: “Retailer media is a way to connect with the consumer in a more targeted way and in a deeper fashion to understand what the consumer wants and move further down the path of personalization.”

KECHLEY: “To us, the fact that it’s powered by retailer data is the key detail and that there’s trade credit happening in the investment.”

6. What is the greatest benefit of working with retailer media networks?

REINER: “The targeting enabled by that first-party data.”

Reiner sees the greatest benefit of retail media as the targeting enabled by the first-party data and the measurement that it offers, which national media cannot deliver. She explained that the measurement is filling a void and believes that there’s even more targeting sophistication to be had.

OSTMAN: “Getting into that golden circle of closed loop attribution.”

Similar to Reiner, Ostman finds that the most valuable aspect of retail media is the targeting and data, and sees retail media as not just providing data on a single media placement, but supporting that “golden circle of closed loop attribution.” Ostman explained that in one scenario, they were able to show the value of their digital media spend not just via a lift online, but through a resulting halo effect of brick-and-mortar sales. With these provable results in-hand, Ostman explains that it’s opening new discussions with senior leaders. 

MESSERSCHMITT: “The targeting and measurement rooted in that first-party data.”

Fitting with the consensus, Messerschmitt agrees that as Albertsons works to offer new tools and capabilities to their partners, the greatest benefit is the first-party data, the closed-loop measurement and the ability to use that measurement to optimize your mix. He explained that their capabilities allow brands to precisely target an audience and access reporting that not only tells you who purchased from exposure to the media, but how much of that was incremental. According to Messerschmitt, with retail performance media, brands no longer have to triangulate or go to creative lengths to prove that their shopper dollars work—they can now legitimately prove.

7. What challenges have you encountered thus far?

REINER: “You have to set the program up the right way out of the gate.”

Reiner explains that the biggest challenge is figuring out how to build the most effective and efficient plan, especially since the brand is not the one directly implementing the campaign and doesn’t have full control over it. She explained that one of the ways to overcome this is education, because many shopper teams are only just beginning to learn the nuances of media planning and buying, and often don’t ask the right questions or select the right audience, media placement or targeting parameters. Communicating the correct plan details in the onset is essential. Additional ways to address the planning challenges include establishing transparency with the retailer into objectives and putting the customer at the center. When the customer is at the center and everyone is working towards mutual goals, then you’re better able to develop an effective plan that can be optimized against.

MESSERSCHMITT: “There is lots of education to be had on both sides.”

At Albertsons, challenges have been seen in the varying levels of understanding on both sides. Messerschmitt believes that it’s critical to get both sides to see the value and get aligned on objectives, which means bringing everyone into the same room to talk about joint business planning.

8. Is retailer media working in tandem with traditional tactics or replacing to some degree?

REINER: “It’s molding together and choosing which will work best for your brand and objective.”

Del Monte has been shifting a lot of their marketing mix into digital the past five years, but Reiner noted that it’s important to be flexible and see where the shopper is consuming their media. Before the pandemic, the business stopped advertising in print, but the pandemic prompted people to start reading magazines again, so you really have to be flexible and adapt to current media consumption behaviors. Reiner says it’s not national vs. retail—it’s molding together and choosing which media will work the best for your brand and objective.

OSTMAN: “We’re taking a total customer investment model.”

Jack Link’s is doing what fits their organization, which for them, is working with traditional tactics and retailer media in tandem. He says that while he sees the tactics moving towards digital and the budgets moving towards e-commerce, they still are planning in conjunction with their shopper teams. The investment in retail media has moved them towards a Total Customer Investment model, where the focus isn’t on department labels, but planning and working together around the goals of the customer—morphing together as one to go into the marketplace and meet the consumer.

9. What impact has retail media had on the collaborative process?

OSTMAN: “The way we operate internally and with our retail media partners has to be transparent.”

For Jack Link’s, maximizing the benefits of retail media depends not only on collaboration with retailers, but collaboration between internal team as they realize the need for top to bottom alignment. The impact on the collaborative process has been seen with increased alignment between senior leaders and customer teams. “If we don’t have alignment from top to bottom, then we’re not going to win.”

MESSERSCHMITT: “We want to work together in a highly integrated way to continue to facilitate joint business planning.”

At Albertsons, the impact on collaboration has been seen in the way they engage CPG partners. Messerschmitt explained that retail media is bringing CPGs teams into the room with them to talk about joint business planning and that marketing and merchandising are increasingly becoming part of an integrated plan. They are having more test-and-learn and partnership discussions, and making joint business planning key to their retail media business model.

KECHLEY: “Retailer-CPG collaboration is going to dynamically change as the workflows become more automatable.”

Kechley explained that because digital tactics are more readily automatable than physical, this means that the workflows and communications surrounding them will become increasingly streamlined. As the planning and analysis of retail media becomes more shared and transparent, the more collaborative retailer-supplier planning will become.

10. How are you measuring retail media success and how do you want to be?

REINER: “We need a model that will allow us to look at the sales results more holistically.”

Retail media success at Del Monte is mainly measured by sales lift, the incrementality and the ROI, but campaigns for new items have more flexibility, and can be measured via a variety of metrics, such awareness, category growth and buyer retention. As retail media progresses though, she’d like to be able to harness a model that will allow her to garner longitudinal insights on the sales impact in order to support future evaluation and optimization. Being able to measure not just at a campaign-level, but at a holistic level is what she’d potentially like to achieve.

MESSERSCHMITT: “It’s not media or shopper.”

Messerschmitt measures retail media success in three ways—as a sales tool that drives business for both sides, as a customer experience driver that delivers a more personalized and useful experience, and as a means of mutual brand growth and equity.

OSTMAN: “Success isn’t in the big headlines, but in the test-and-learning—the small, winnable moments.”

Ostman explained that the measurement of retail media success looks different with emerging brands. For emerging, it’s about measuring awareness and category growth, but with legacy brands, like Jack Link’s, it’s about share of voice and digital shelf metrics. The three key metrics though are household penetration, category growth and incrementality as new tactics come online. He also emphasized that while a lot of times leaders want to hear about ROI and ROAS, there’s a lot to be said about the smaller wins that occur through test-and-learning.

Meeting the Future of Shopper Marketing Head-On

With 50% of retail media funding coming from shopper marketing, it is clear that as retail media evolves, so too will the shopper marketing practice. The digital playbook has arrived and with it, new opportunities to not only reach the consumer in a more targeted and personalized way, but to measure, analyze and optimize at a higher degree of sophistication than ever before. As Reiner emphasized though, you can only optimize against a good plan. Key to retail media success is being able to lay down an effective plan and share it with retail partners in a clear and efficient way. This calls for virtual planning tools that can unite internal teams and outside partners around real-time campaign planning, budgeting and creative information.

While Cierant’s shopper marketing optimization system (SHOPT) is known for supporting traditional tactic planning and execution, today, the system offers a suite of tools specifically designed for digital, including dynamic image resizing that allows you to seamlessly scale tactic artwork for different channels and formats. In addition, the system supports collaborative media planning through virtual calendars with advanced share permissions and budgeting workflows that integrate and measure JBP goals. Email marissa@beshopt.com to learn how SHOPT provides the collaborative planning needed to align your teams around a single source of retail media truth.

To view the Path to Purchase NOW webinar on-demand, visit: https://event.webcasts.com/viewer/portal.jsp?ei=1412537&tp_key=423fc86d83.