Connected commerce: tips to turbo-charge retail media

Merkle UK’s director of eCommerce Maria Traill reveals best practice for delivering connected commerce experiences that continue to meet changing consumer expectations and deliver best business results

Connected commerce: tips to turbo-charge retail media

When it comes to commerce and retail media there’s a lot of buzz at the moment, and rightly so. 

With customer expectations continuously on the rise, it’s important that brands can reach customers wherever they are, across multiple touchpoints, in order to win and maintain their loyalty. Retailers are creating opportunities for brands to do just this, by creating ad placements across their websites and apps, appearing on search pages, product pages, and more. Alongside access to valuable retailer data, increasing upper-funnel touchpoints and growing measurement solutions mean it’s an area ripe with opportunity. Harnessed in the right way, brands can create meaningful, connected commerce experiences that meet customer expectations and drive long lasting relationships. 

Amazon has been particularly successful in expanding the advertising side of its business over the past ten years, recently revealing for the first time the revenue generated: $31.2bn for 2021. That’s more than YouTube and on par with the global newspaper industry. While it has undoubtedly created attractive opportunities for advertisers, Amazon credits much of its success to its principle of customer obsession. A focus on customer-first advertising was a key driver to its success, and brands should seriously consider pivoting towards the same outlook. 

It’s not only Amazon. In the UK, most of the top retailers now offer various on-and-off-site solutions, with ITV recently announcing a partnership with Dunnhumby and Boots Media Group to bring targeting and measurement solutions to its video-on-demand (VOD) platform. This type of media is becoming an increasingly more prominent element of an advertiser’s media mix.McKinsey reportsthat 70% of advertisers see significantly or somewhat better performance from retail media than other channels, and that 82% intend to continue increasing their retail media spend over the next 12 months (Commerce Media: the new force transforming advertising, July 2022). 

Yet, as is often the case with opportunity, there are also challenges. The specifics may be new and while they require commerce nuance and expertise, the principles of best-in-class media still hold true. Keep the consumer and their experience at the heart of your strategy, and you’ll be heading in the right direction to nurture their loyalty. 

Advertising should be all about the consumer

Advertisers might have different teams managing Amazon, third-party retailers, or D2C, but they must break down those silos and truly put the consumer at the centre of their strategy to ensure one, consistent brand experience. The commerce landscape and consumer journeys themselves are complex, fragmented and overlapping, but while the number of digital interactions is on the rise (70% of consumers visit 2-4 websites on their buying journey, 12% visit 5+, according to channeladviser’s 2022 Online global consumer behaviour report), consumers only see one brand. 

At Merkle, we’ve had numerous clients asking how to break down these silos and present themselves as one brand, both on and offline: collaboration is key. Different departments and teams need to work together to succeed — and this goes beyond media. Brands need to ensure they’re aligning the total consumer experience, not just in media but at every potential touchpoint, be that across the different sites they can purchase from or even in-store. As shown in the linked case study, it’s likely brands will need to adopt new technology solutions to aid in this.

Welcome both retailer and first-party data 

That consistent experience should be powered by data. Retailers such as Amazon, Tesco, and Boots are offering advertisers access to consumers’ shopping and purchasing behaviours through valuable retailer first-party data. Over 70% of UK brands cite this access to retailers first party data as a reason for working with retail media networks, as shown in Merkle’s 2022 Retail media research report.

Marketers can use this data to reach existing customers and protect their brand by mitigating brand switching, find new customers purchasing complementary categories, or adopt a conquesting strategy and target competitor purchasers.This is particularly enticing for FMCG brands, which often lack the level of first-party data D2C brands have. 

Retail media allows them to reach consumers more accurately and target more precisely than before, delivering a better experience for consumers, and stronger media performance. Brands should test opportunities offered by retailers, understanding more about how their consumers behave, how performance differs across different sites and different products, and feed these insights back into planning. What other categories and products are your customers purchasing? What other items are customers viewing alongside your product? How do purchasing behaviours differ across retailers? The more data you have about these customer behaviours, the more likely they are to feel understood, and therefore increase their loyalty to your brand.

Whilst making the most of this, brands should also seek to prioritise direct relationships and their own first-party data collection where they can, and where there’s a clear value exchange. D2C won’t be right for every brand, but environments can still create an experience and provide another way to build relationships with consumers. Yet brands must be clear on what consumer challenge their environment solves. If brands are asking consumers for data, they must be clear on what consumers receive in exchange. Every interaction a consumer has with a brand presents an opportunity to collect data, not just for the sake of collecting, but to use to better understand their consumers and crucially to power future, more personal experiences.

Measure up and embed experimentation

A robust measurement strategy has always been important due to its self-fulfilling nature: you’ll drive more of what you measure and optimise towards. While retail media offerings bring valuable closed loop measurement solutions, they’re not a magic solution. Advertisers still need to work to prove incrementality and bring together fragmented data sets – 37% of brands (Merkle’s 2022 Retail media research report) are not currently comparing performance across retail media networks. In part this is due to a lack of standardisation and common definitions across an industry that’s still very much in its infancy despite its fast growth. We’ll see this change over the next 12 months, and in the meantime, brands should ensure they have a strong KPI framework, with media KPIs laddering back up to true business outcomes, and that this is validated through consistent testing. 

With ever-changing consumer expectations driving different behaviours, and increasing inventory, formats and data available to advertisers, constant experimentation is a must. There’s no “one size fits all” approach, so brands should adopt a data-led test-and-learn philosophy to understand what works best for their consumers and creates the best experience, striving for progress, not perfection. There’ll be missteps along the way, but brands should take the opportunity to learn from these. Even failed tests present an opportunity to refine and improve the consumer experience. 

Prepare for game-changing results

Just as the commerce media landscape is ever changing, so are consumers’ expectations. Brands need to focus on delivering against these by keeping consumers at the heart of everything they do and breaking down silos within their business. Customer loyalty is no longer just about points programmes, it’s about understanding your customer, how they behave, and personalising your advertising to be recognisable as one brand across multiple channels.

Retail media is set to continue to grow; it’s an industry set to be worth $6 billion in the UK alone by 2025. At Merkle, we’re helping brands tackle the challenges of this fast-growing but nascent industry with the same core principles we apply to all media, adopting a customer-centric, data-driven approach to connected, personal experiences.


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