In a session held by WARC at the Cannes Lions International Festival of Creativity this past summer, J.P. Castlin, an independent strategist consultant, warned about a major shift in the way brands need to think about driving eCommerce growth. Profitability is the new imperative while the industry has instead favoured growth, often without a plan to reach and stay consistently in the black. Castlin went on to explain that pure-play eCommerce players are more than twice as likely as pure-play brick-and-mortar stores to report that they are unprofitable. In today’s uncertain economic situation, the need for solid eCommerce profit strategies become even more critical.
Aside from optimizing fulfilment or moving away from free shipping and other cost savings approaches, eCommerce brands have some opportunities to diversify their revenue streams. The one IAB Canada and its members are very interested in is, not surprisingly, the implementation of retail media offerings. The timing could not be better as the demise of cookies and the added pressure from privacy and targeting complexities in the media supply chain has forced marketers to take a hard look at alternatives. One promising option is leveraging first-party data to sell ad inventory on digital platforms, at scale, and it’s got everyone’s attention.
IAB Canada started reporting on Retail Media spend in our annual Revenue Report with almost $800M (conservatively) captured in the Canadian market for 2021 – it’s only the beginning. Publicis Groupe’s CEO Arthur Sadoun recently predicted that retail media spending will exceed that of TV by 2025. The surge in investment is being matched with greater performance and real incrementality for the brands and retailers are leaning into this space.
Looking at Criteo’s Future of Commerce report, it’s not hard to understand the rationale behind Sadoun’s forecast. The study indicates that “retail media campaigns are delivering impressive results when compared with search and social. 58% of media agency respondents to their survey reported ads are more likely to be relevant to the shopper, while 53% have experienced better sales growth and 51% say audience targeting is enhanced.”
IAB Canada is looking forward to a deep dive on the state of Retail Media at our upcoming eCommerce, Full Circle Shopping virtual event on September 27th. Retail Media thought leaders from Best Buy, Home Depot and Loblaw will share insights on what’s behind the magic of leveraging first-party data while a slate of top tier speakers will discuss the other elements behind effective first-party data strategies and omnichannel marketing in today’s eCommerce marketplace.