Study defines the value of retail media investment

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BOSTON — E-commerce was the top retail growth driver in the U.S. even before COVID-19. And with this year’s digital acceleration, winning in retail long term now requires that brand manufacturers win online first. And, of course, no discussion of e-commerce is complete without reference to the proverbial 800-pound gorilla in the room: Amazon. The e-commerce behemoth has doubled its profits since the start of the pandemic and became, according to CNBC, “the default retailer and an essential service for many consumers at the height of the coronavirus crisis.” In short, e-commerce is now at the center of consumer engagement and customer experience initiatives for brands across industries.

The result has been an overhaul in how retail leadership at major brands approaches commerce across the board, including digital shelf optimization, proactive profitability management, supply chain agility, demand generation and retail media investment.

Focusing in on that final area, the Digital Shelf Institute, a commerce community for manufacturers, will release a new study on December 16 looking at the full, holistic impact of retail media investment. “The Full Revenue Impact of Retailer Ad Platforms” is authored by Digital Shelf Institute Executive Forum members Chris Perry, digital commerce consultant and former vice president and advisor at e-commerce provider Edge by Ascential, and Molly Schnothal, former digital business head at Mars and current vice president of community marketing at Salsify. The report is based on detailed conversations with several e-commerce and retail leaders and innovators at billion-dollar-plus brands and aims at providing a better understanding of where, exactly, retail media spend shows its impact.

It is an area of commerce experience management that has been traditionally undervalued, especially at larger legacy brands, according to Perry.

“Big brands generally find themselves in a catch 22 that prevents them from appropriately investing in retail media,” said Perry. “They haven’t had great visibility to retail media impact on their business and brands, because brand marketing teams and agencies have not historically been incented to invest sufficiently in retail media to generate a measurable impact. This report will help digital and e-commerce leaders make a forceful case for more substantial investment in retailer ad platforms, given that spend’s appreciable impact across other channels.”

So how should brands measure their retail media spend efforts? The report offers nine areas of value:

Media Value: Running retail media campaigns helps brands to achieve traditional media metrics like reach, frequency, awareness and engagement across a targeted audience. Brands that have invested sufficiently to measure retail media impact have seen results comparable to those of Google, Facebook and even Super Bowl TV ad campaigns.

Online Sales Growth: Naturally, running targeted retail media and product search campaigns on a retailer’s site will generate a return on ad spend (ROAS) in direct sales. On across consumer goods categories, the average ROAS in direct sales on Amazon for product search campaigns is $3.00 to $7.00 for every dollar spent.

Offline Sales Growth: Both brands and retailers have measured up to a range of $7 to $11 spent in-store for every dollar spent online generated by retail media campaigns. Visibility to such impact requires strategic partnership and data sharing with retailers and/or sufficient retail media investment and consistent media mix modeling analysis. However, the impact is there whether measured or not.

Partner Value: Retail media demonstrates commitment to that retailer and counts as direct investment in a brand’s joint business plan partnership. A manufacturer can leverage this to secure more trade programs, exclusive opportunities, greater distribution and better placement in-store.

Repeat Rate: Driving online shopping behavior with retail media can help increase a brand’s repeat rate as well. Subscription programs like Amazon’s Subscribe & Save drive automatic repeat at much greater frequencies than manual shopping. Additionally, Perry notes that his firm has found that 73% of online grocery shoppers start shopping off their past purchase history, making them less likely to defect to something new presented to them on their path to purchase ­in-store.

Social Validation: Retail media drives conversion, which drives more sales, which drives more online customer reviews. Customer reviews are a critical decision factor for new shoppers in the consideration phase in their buying journey both in-store and online.

Digital Visibility: Winning the digital shelf requires a number of strategies. However, by driving more traffic, conversion and reviews with targeted retail media and search campaigns, a brands’ product sales and search ranks increase driving greater organic visibility, as well as inclusion in retailer-driven merchandising featuring top-selling brands.

Offline Placement: Digital leadership and demand generation helps to influence offline placement as well. Retail buyers today actively look to top-sellers on their growth platforms (i.e., e-commerce) to determine what products to bring into store to ensure they have the optimal, highest-demand assortment.

CPA Efficiency: By investing early on in retail media for digital leadership today, a brand is able to establish presence and relevancy, as well as customer loyalty that helps to lower the cost of acquisition in the long-term.

“Quantifying all of these hidden benefits is the challenge in today’s open loop, fragmented marketplace of multiple data shareholders,” said Perry. “However, the benefits are real and are happening at scale. The brands who can overcome their own biases and barriers and lean in strategically to retail media today will continue to gain share and dethrone the market leaders who find themselves unable to do the same.”

Download the full report December 16, along with a supplemental media spend impact calculator on the Digital Shelf Institute’s website at



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