THE STATE OF SHOPPING
Various sessions at Commerce Week discussed a shift in consumer behavior after two years of isolated shopping and the importance of “omni.” An increasing number of consumers have latched onto hybrid shopping for its convenience factor, allowing consumers to shop anywhere, anytime, and by whatever means they choose. Based on insights shared during the “Data-Informed Brand and Consumer Interrelationships” session, 27% of all shoppers are now hybrid shopping, and we see this percentage increasing particularly among Gen Z shoppers at nearly 40%. Within the grocery space, the number of hybrid shoppers has doubled versus the pre-pandemic era, showing this trend in shopping is here to stay.
As shopping habits evolve, it’s table stakes for brands to execute omnichannel strategies and deliver a holistic and seamless experience across all digital and in-store touchpoints. Personalization is key to driving customer retention and reaching and acquiring new buyers as well. However, omni is not only impacting how brands rethink their planning approach, it’s also eliminating silos within organizations and shifting team structures that deliver on holistic, full-funnel activations.
THE IMPORTANCE OF THE FULL-FUNNEL APPROACH
The integrated marketing planning approach was covered across Commerce Week panels. As the effectiveness of performance tactics are more linear to measure, a low-funnel part tends to be exaggerated in marketing plans. Many speakers shared their own experiences that a balanced full-funnel approach is a key to sustainable sales growth for brands.
Identifying the right metrics: Defining the right metrics and an attribution window is a basis for an integrated marketing approach, and overarching business and media objectives. While such KPIs as Return on Ad Spend, Cost per Lead, and Cost per Mile are helpful from a short-term perspective, focusing on Customer Lifetime Value (LTV) measurement allows brands to properly attribute full-funnel media investments. Maximizing the increase in LTV for each ad touch and transaction was mentioned as the strategic goal for the media planning process by several speakers. Predictive and attribution modeling is a space where brands are currently focused.
Having the right balance between brand building and performance: The customer journey is not linear. Now channels are more fluid than ever—retail media capabilities are extending with brand-building options, and traditional upper funnel channels are adding performance and commerce offerings, and it requires advertisers to combine data and expertise to find more relevant customer touchpoints that translate into more sales. Moving more effort to the upper funnel allows brands to bring the right product stories with the right culture at the right moment. Patience is the key factor for building long-term customer relationships.
Unifying the teams: While organizational silos still exist in many companies, integrated marketing planning is helping to bring all teams together and treat brand and performance as one. And this unifying approach goes beyond the brand and includes all partners such as agencies, retailers, influencers, and others. Considering a possible recession, relationships with customers matter more than ever. That is why it is important to reveal the power of a brand and integrated marketing planning, use the right attribution model for media investment measurement, and unify teams to act as one.
RAISING THE ROOF ON RETAIL MEDIA
Retail media was one of the hot topics at Commerce Week. This was no surprise as retail media represents the third big wave of digital advertising—a highly dynamic and fast-growing ad segment based on retailer data.
Full-funnel capabilities: While retail media was beginning with performance tactics, now it includes full-funnel, on-site and off-site capabilities. As retailers own zero- and first-party data for consumers, they offer advanced segmentation and insight-driven audiences. To develop connected commerce marketing, retail media should move from walled gardens to community gardens. It will help to integrate retail media with other digital channels and give brands a strong data foundation across channels, including the ability to set up the cross-channel frequency.
Unlocking growth opportunities: Retailer media networks continue to expand into new products and more locations. The market is highly fragmented, and the key issue for brands is choosing the biggest partners that can streamline the process of integrated media, data, and measurement solutions. To unlock growth opportunities, retailers need to address advertisers’ biggest challenges with measurement. While retailers are constantly developing retail media capabilities, they should help brands to educate internal teams because there is a huge area to grow expertise.
Conversations between retailers and brands: Transparency is central to a successful conversation between retailers and brands. A broader team should participate in JBP to get contributions and commitment from all key stakeholders, and it’s expected that all participants come prepared, having internal meetings before the JBP meeting. In this currently very complex environment, goals can be achieved only by working as one team. Both parts of the team—brands and retailers—should bring resources to figure out how to unlock insights and create value for consumers. To have an open and productive discussion, all metrics need to be aligned and defined in the same way. Attributed ROI is an example of a metric where it is important to clearly understand what is being included and how it was calculated. As such, having a common language helps to create a robust plan and realize it.
This article is part of the Adweek Commerce Week Trends Report 2022 – download the full report here.