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Our do’s and don’ts for the digital transformation of a commerce media offering

The introduction of digital channels to a retail media estate is a more popular topic than ever. This is largely owing to the current, much-needed flexibility that these channels provide, but also links to advertisers’ increasing desire to deliver better targeting, achieve a greater level of personalisation and connect the dots more seamlessly between the different touchpoints that shoppers interact with across the path to purchase.

As a retailer, it’s easy to be enticed by digital opportunities, which at face value can provide a bit of glamour to a world that’s traditionally been dominated by cardboard, but it’s important not to lose sight of your objectives. When delivering digital transformation, no matter how small or large, we propose that you keep coming back to these three golden questions:

  • Will this change enable us to provide a better experience to our customers?

  • Will this change enable brands to better achieve their objectives?

  • Will this change enhance our overall media proposition?

If the answer is no, and we’re not suggesting that the answer will always be as clear as day, then you may need to consider your route forward carefully.

Why introduce digital channels to your commerce media offering?

For brands, digital channels offer a more granular level of targeting and a greater opportunity to deliver highly branded content (vs. templated POS). They offer the ability to deliver dynamic and reactive creative to increase shopper engagement, as well as campaigns that are more connected across the total path to purchase. A further benefit of digital is the ability to achieve quick turnaround bookings and last-minute creative changes - more important than ever since COVID-19.

For retailers, digital channels create large volumes of valuable inventory at a relatively low cost, given there are no associated print and production costs. This also ties into the fact that they offer a more environmentally friendly solution, generating no cardboard wastage. Moreover, digital channels enable retailers to increase their average campaign compliance, as well as transparency on compliance levels with brands, not to mention better reporting.

For shoppers, digital channels provide more timely, tailored and relevant messaging. They help create an engaging experience for shoppers, with a personal touch. Moreover, they deliver value to shoppers through reactive messaging (e.g. John ‘Louis’ celebrating the arrival of the royal baby) or convenience messaging (highlighting key in store promotions & bespoke directional messaging according to store format).

In summary, the introduction of digital channels to a media estate, done well, can deliver value to all parties. But beware - done poorly and it has the potential to be damaging to the shopper experience, detrimental to the retailer P&L and over-priced or overly-complex for brands.

Here are Threefold’s top do’s and don’ts when it comes to digital transformation in commerce marketing.

Our top do’s:

  • Do: complete detailed, cross-market due diligence before either engaging a new supplier or creating a new owned channel. Where necessary, create an RFP process, involve procurement, and engage an impartial, expert party.

  • Do: execute a series of test & learn campaigns before rolling out any new channel at scale. Select the right brand partners for trials – you’re looking for an open, fair, willing and proactive party.

  • Do: roll out a new channel on a phased basis, to allow for continued learnings to be implemented.

  • Do: package your channels carefully: where there is limited availability or high desirability, create packages to ensure incrementality over cannibalisation.

  • Do: carry out the right benchmarking analysis to ensure that the pricing of these channels strikes mutual value both for the retailer and brands, and reflects market value.

  • Do: ensure that if you plan to introduce a CMS platform to automate your on-site advertising, you carefully consider the benefits of reach (network vs. private marketplace) and control (how much say you have in when, where and how ads are served, including whether non-endemic brands have a place). Also ensure that you gain complete clarity on data sharing and usage with a third party supplier.

  • Do: consider personalisation opportunities, in cases where the data is available. As we move to a cookieless world, brands will increasingly look to retailers to leverage their rich, first party data sets.

  • Do: consider how digital can play a role in delivering the ‘experience’ that shoppers will be looking for in the future, when they are able to return to store freely.

Our top don’ts:

  • Don’t: try to launch everything. There are so many digital channels that could be incorporated within a commerce media offering. Be choiceful and stay true to what will actually deliver value to your customer base.

  • Don’t: flip too much investment away from in-store in a knee-jerk reaction to COVID-19. Remember the volume of your bricks & mortar sales and the increasing importance of omnichannel sales.

  • Don’t: make the mistake of focusing on in-store and e-commerce and not considering the bigger picture – notably off-site and proximity channels. These are the channels that will enable brands to deliver truly integrated marketing campaigns. How data is shared is really important here.

  • Don’t: forget to consider depreciation of assets when considering pay out for channels that might require an upfront capital investment, e.g. digital screen ownership.

  • Don’t: overestimate channel occupancy in the first year – without clear performance analysis, brands may be reticent to invest at first.

In summary:

Done well, the introduction of digital channels to a media offering can enable retailers to reap some serious benefits. One of Threefold’s retail partners has gone from attracting £0 supplier investment in digital to a third of all spend now being accounted for by digital channels. And when you look at year on year growth of supplier income, every single penny is incremental, not to mention more profitable. Shoppers are benefitting from a more engaging and tailored experience, and it’s working for brands too - the highest performing channel for ROI in this retailer is digital.

So in conclusion, if you can engage the right partners, strike the right mix, and launch expertly, then the introduction of digital channels to a retail media estate has the ability to deliver truly transformational results.


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