Off-Site Advertising: It's Time for Retailers to Make First-Party Data More Actionable

By Sean Buckley, Chief Revenue Officer, Magnite

Sean Buckley is Magnite’s Chief Revenue Officer and is responsible for sales, customer relationships and partnerships globally. Sean joins Magnite from the acquisition of SpotX where he held the position of Chief Operating Officer where he oversaw and drove SpotX’s broader business objectives including the overarching company vision. He was responsible for operations, sales, partnerships and marketing for the company.

Over the past two years, retailers have broadly seen e-commerce sales spike and, at the same time, consumers are spending more time with online entertainment and content, particularly on streaming TV. In line with capturing consumer attention and dollars where they are, brands are also investing more advertising budgets in digital media. These concurrent trends present a new revenue opportunity for retailers to leverage their valuable consumer shopping data to expand their digital media offerings off-property and capture some of the $50 billion in projected ad spend for 2023.

The Power of Shopper Data in a Digital Environment

Retailers have always occupied a valuable position in the advertising funnel and the shift to digital presents an additional avenue to work with brands. We’ve already seen in-store marketing tactics like aisle end caps translate into digital on-site ads on retailers’ owned and operated websites. The definition of retail media is expanding to encompass more than the advertising of products on a retailer’s site.

There’s an even bigger opportunity in the near future for retailers to bring in incremental revenue by offering shopper data for use in off-site advertising. In other words, retailers can separate shopper data from their websites, apps and other consumer touchpoints and offer that to brands to power their advertising on channels and formats like streaming TV, mobile, audio and display.

Retail data is prized for its ability to drive outcomes for both brand and performance-driven advertisers. Macroeconomic uncertainty will result in marketing and advertising budgets being under increased scrutiny and pressure to prove their effectiveness. Retail data enables closed loop sales measurement which solves for this, particularly for CPG companies who historically have lacked this level of analysis and insight.

Looking into 2023 and beyond, retailers are sitting on the potential to unlock highly relevant consumer insights for use in advertising.

Activating with Privacy, Scale and Efficiency

Once retailers have made the decision to make the most of their valuable data assets, the question is how to do so. In today’s advertising world, programmatic advertising commands the majority of digital ad spending. Programmatic advertising uses automated technology for buying ads and has evolved over the past several years to be a standardized and efficient way to buy and sell advertising. Sell-side platforms (SSPs) help media owners and publishers monetize their content. SSPs can also help retailers onboard their data to make it accessible for advertisers.

While retailers vary in size, specialty and the maturity of their media businesses, they all have one thing in common: protecting their shopper data is the top priority. Retailers should look for SSPs that offer robust data protection without the need to create a restrictive “walled garden” or a siloed workflow. Retailers are able to keep their data safe because user data is anonymized and no personally identifiable information (PII) is included in the programmatic exchange. Additionally, retailers can selectively choose which marketers can activate campaigns and control the types of advertiser-side data collection to ensure there is no data leakage.

Scale is another factor that retailers have to consider, especially for small to mid-sized companies. By working with a scaled, established SSP, retailers can simplify activation for advertisers, allowing them to run campaigns in their preferred demand-side platform (DSP) and seamlessly align with existing workflows. Looking at it from the advertiser’s perspective, it is much more efficient to run a campaign through a platform that is integrated with many retailers rather than navigating a unique workflow for each retailer individually. Reducing friction to onboarding advertisers will increase the number of budgets a retailer can capture and accelerate the speed of getting campaigns infused with retail data up and running.

Looking into 2023 and beyond, retailers are sitting on the potential to unlock highly relevant consumer insights for use in advertising. Each retailer will make many decisions along this journey. Programmatic advertising offers the flexibility, scale and control that retailers need to safely, strategically and efficiently open up a new revenue stream to build their retail media businesses.

The State of the Retail Industry 2023

JAN 2023

07/05/2024 15:52:34

AI Helping Retailers Secure Continued Success Amidst Ongoing Industry Challenges

By Gary Saarenvirta, Founder and CEO, Daisy Intelligence

Gary Saarenvirta, Founder and CEO, Daisy Intelligence

Gary Saarenvirta is the founder and CEO of Daisy Intelligence and a pre-eminent expert on autonomous AI. Under Gary’s leadership, Daisy is delivering Explainable Decisions-as-a-Service for merchandise planning and risk management. By actioning the Halo Effect, Gary discovered an opportunity to drastically improve business decision-making with automatable recommendations for retailers and insurers. Gary and his leadership team have established a track record of delivering verifiable financial outcomes for a rapidly growing list of global clients with Daisy’s solutions.

With supply chain issues and the rising cost of living, 2022 brought significant challenges to retailers’ profitability. Though these challenges are expected to persist into this year, retailers racing towards artificial intelligence (AI) adoption are discovering a much-needed respite from these pain points.

AI - which simulates millions of item, price, demand, space, and assortment decisions - is helping leading retailers increase margins and retain customers amidst ongoing industry challenges.

Ultimately, AI technology will be the driving force behind retailers’ success in 2023 – securing their continued survival in this unstable inflationary period.

As aforementioned, the industry will continue to feel the impact of supply chain issues and inflation – resulting in a lack of product, difficulty filling shelves, and rising costs that will affect retailers’ bottom line.

These challenges will be most greatly felt when making promotion and pricing decisions. Products promoted in the past may no longer be viable due to a lack of availability or rising costs. We are already seeing our customers shift to promote staples – e.g., oil and rice - in larger sizes as the unit cost is now lower than the smaller options. With retailers trying to avoid passing price increases onto consumers, they will also be forced to become increasingly strategic about pricing - deciding where they can invest in products.

We’re in a moment of time where AI is the only solution to succeed in this difficult moment of business.

Furthermore, with the switch from in-store to online that occurred over the course of the pandemic, consumers will continue to grow ecommerce channels. This poses an additional challenge to retailers’ profitability as we know ecommerce is not profitable for brick-and-mortar retailers. In fact, the more they sell online the less profitable they are due to the costs incurred picking, packing, and delivering orders.

However, the upcoming recession will provide an opportunity for retailers to recoup customers. Consumers will be forced to become more conscious of spending habits - eating out less and buying more in store. With consumers increasingly relying on retailers to provide the right items at the right prices, retailers that invest in promotions and discounts will win in the recession.

Trends in AI Adoption

The retail industry has already displaced banks as the number one spender on AI – and the race to invest in the technology will only continue as we enter this year.

Retailers are facing more work than ever before – and with the cost required to source and hire new staff, tackling these challenges with more people is no longer feasible. Smarter decision-making with intelligent automation is key.

Our customers are already turning to automate more processes as opposed to hiring more staff. We’re in a moment of time where AI is the only solution for the growing workload. Every position is being stretched and retailers simply don’t have the resources they used to.

Being smart in the execution of merchandise plans is invaluable to achieving profitability in today’s retail environment. With AI providing impactful decisions for promotions all the way to assortment planning, it offers the guidance necessary to succeed in this difficult moment of business.

Conclusion

It goes without saying that being a retailer in today’s industry is tough—and with persisting industry challenges it becomes an increasingly daunting position. However, the outlook is not so grim.

Retailers already leveraging AI automation will discover increased customer traffic and margins – paving the way to their success this year; and with the bulk of retailers already investing or planning to invest in AI, many will soon realize similar success.

The State of the Retail Industry 2023

JAN 2023

07/05/2024 15:52:34

Rethinking Product Journeys and Consumer Engagement

By Scott Pearson

VP, Sales and Marketing, Jesta I.S.

Scott Pearson, VP, Sales and Marketing, Jesta I.S.

Scott Pearson has 30 years of experience in retail and retail technology, ranging from retail management, Director and VP level positions in high-touch retail, and VP, COO and CEO experience in the retail software industry.

Scott is an accomplished retail executive with a track record of success. He has brought many products to market ranging from clienteling, POS and OMS solutions. He has served as a visionary and respected consultant in supply chain, omnichannel, omni-engagement and customer-centric initiatives.

Scott looks for opportunities to engage with retailers and understand their business needs, and approaches these relationships with a common end goal of moving the needle for the retailer, whether in supply chain, operations or engagement.

The trends I am closely watching in retail should further propel technological adaption in 2023 to address the global supply chain and overall customer engagement. Getting products into the consumer’s hand in a more efficient manner continues to be a priority for many, driven in large part by the change in the role of the physical store, and current challenges in the supply chain.

There’s a push to nearshore sourcing to get merchandise into the consumer’s hands more rapidly. Last-mile delivery processes are being incorporated to fulfill orders as well.

Fulfillment is no longer just warehouse delivery, but also in-store fulfillment through BOPIS and BOSS. As a result, OMS, fulfillment optimization, and routing engines are now providing real dividends.

Additionally, rich analytics are helping to answer questions like “How can my planning and allocation be executed more efficiently?” Brands are looking at ways to leverage AI and machine learning to streamline supply chains and ensure they are meeting the needs of consumers where and how they choose to engage. It's not just about inventory in the store or warehouse, but how to address engagement across channels.

Unifying retail is critical to success, providing a single, 360-degree view of the customer, product, transaction, and process, as well as programs such as loyalty and promotions.

Omnichannel Customer Engagement

The typical consumer has interacted with a brand online multiple times before they consider making a purchase. While they engage online initially, they often wish to experience the product, try items on, feel them, and engage with them directly. The brick-and-mortar store continues to provide these capabilities, as well as the expertise of a highly trained associate. So, the marriage of online and in-store encourages new and innovative ways to engage and satisfy consumers across channels.

A case in point is the incorporation of the social media influencer to engage the consumer on behalf of a brand, perhaps eventually extending to a common marketplace where the influencer can market multiple products across brands.

While not yet adopted broadly, there is also a movement towards VR, AR, and the metaverse, with the ability for the consumer to shop, or co-shop, in the virtual store. While not for all, Gen X and Z are more inclined to experiment with virtual shopping and drive this evolution.

Enabling Technology: Unified Commerce

How do you successfully engage customers? Do so in a unified manner? Deliver a consistent brand experience across channels, and ensure customer satisfaction?

Addressing these challenges relies on the digitization of retail. Often thought of in the context of digitizing a brand’s assets for e-commerce, this concept goes much further than that.

Unifying retail is critical to success, providing a single, 360-degree view of the customer, product, transaction, and process, as well as programs such as loyalty and promotions. This supports a common approach to engagement online, in-store, on the consumer’s mobile device, and even a customer service portal. This can only happen once a brand has all their assets in a form that can be easily interfaced and integrated with an ever-changing technology landscape.

Our global clients are recognizing the need for a unified set of assets and processes that support engagement and commerce through a broad enablement platform. Such a platform will allow brands to extend their overall efforts of getting the right product to the consumer, through the right channel in the most effective manner.

Replacing an existing ERP used to be thought of as a major and unnecessary challenge, but now brands are recognizing the need to support transformation through an enablement platform that supports the changes that are occurring and those to come.

The State of the Retail Industry 2023

JAN 2023

07/05/2024 15:52:34