By Victor Roca, Director of Ads and Retail Media at Glovo
The retail landscape might be more varied than ever, but it’s still tethered to one common goal: knowing what customers want. It’s something that has challenged retailers for centuries. It used to be that a friendly neighbourhood shopkeeper or market seller would know their customers like the back of their hand. Then, in the early 20th century, American psychologist Daniel Starch changed the market research landscape with the Starch Test – going door-to-door to ask homeowners which magazine and newspaper ads they responded to.
From marketing segmentation to customer behaviour to web analytics, a lot has happened in the 100 years that followed, but the challenge remains the same: how can retailers truly understand their customers? Keeping up with changing shopping habits is a serious challenge that skyrocketed with Covid and hasn’t stopped in the years since. This has meant that many of the shopper types marketers swore by are now anyone’s guess. In fact, today’s consumers are digitally savvy, value-conscious and want to feel appreciated and heard. But that’s not to say they are a one-size-fits-all; the range of possibilities is forever evolving. So, with this in mind, how can today’s marketers keep up?
The expectations of an evolving marketer
A challenge for today’s marketers is not just reaching the customer, but proving the effectiveness of their techniques through return on investment (ROI) and return on ad investment (ROAS). Yet with not just one, but many, moving targets it can be harder than ever to hit the bullseye.
What brands need is access to a tool that informs them about very specific consumer behaviour so that they can ensure a healthy hit rate with their marketing spend and rest assured that the messages they’re putting out into the world are being heard. While we eagerly await mind-reading to become a marketing reality, brands and agencies will have to rely on the next best thing – real-time purchase information.
Why real-time purchase information is a game-changer
Real-time purchase information is the data from customer interactions and purchases that typically stems from and powers retail media. Data is cultivated through direct transactions with customers as they purchase, giving marketers a new depth of insights including what customers buy when it’s raining; what they are interested in drinking when the football kicks off; how purchases differ on a Saturday morning compared to a weekday; and everything in between.
Today this information, and retail media, should be a part of every brand or advertiser’s marketing strategy. That’s because, as the above suggests, this information not only helps brands understand their customers, but at any given moment too; allowing marketers to target them based on numerous types of segmentation.
Further, when it comes to retail media, people don’t come to browse – they come to buy. This approach ensures brand visibility at the most opportune moments, and gives them a better chance of seeing return from high intent purchasers. Which means that marketers are working with much richer data, and are able to use it to influence decisions at the moment of purchase with far more effective results and ROI/ROAS.
It’s not just first-party data that marketers stand to win from this strategy either. By utilising retail media, the modern marketer has a range of game-changing tools at their disposal, with in-depth access to and knowledge of:
- High intent purchasers
- Trackable campaign performance
- Full marketing funnel options
- Performance-oriented assets
It’s not an exaggeration to say that retail media can have as profound an impact on consumer relationships as the Starch Test and other milestones, and give marketers unparalleled access to the minds and behaviours of shoppers everywhere.
Changing tools for a changing consumer
With the rise of AI, the companies that held back on getting hands-on with the new technology suffered a lag in experiencing its benefits. In most cases, productivity soared among their competitors and, as the technology continued to evolve, they had to play catch up. The scenario is the same for retail media which is why brands can’t afford to stand still.
The tools are already evolving. For instance, post-checkout ads have become a popular asset in the q-commerce space, especially when their click-through rates (CTR) are so high. Now is therefore a prime time to get to grips with retail media and start experiencing its benefits. As costs for advertising space increase, brands will inevitably be met with more competition for available impressions – eventually causing the currently high level of ROAS to fall.
But remember that this is one area that rewards a ‘test and learn’ approach and the sooner brands and agencies get started, the better; especially when no minimum investment is required. The alternative is continuing with a ‘Hail Mary’ consumer outreach approach that often lands more by chance than by strategy, and can be significantly more expensive.
Retail media is the missing link for marketers. But it won’t just fall in their laps – brands and advertisers need to do their homework and get hands-on and, most of all, ensure their horizons are open to knowing their customers more than ever before.
