Retail Media Networks and Retailer Data
Nick Minnick is the VP of Strategic Partnerships here at Chicory, the contextual commerce advertising platform.
Following our shopper marketing glossary (find part 1 and part 2 on our blog), we’d like to explore how retail media networks and retailer data work. Many new retail media groups like Target’s Roundel (launched in 2016) and Kroger Precision Marketing (founded in 2017) have launched within the past five years, making it critical to understand the role they play for CPG and food brands, how to leverage their capabilities and insights and how they can expand shopper marketing options off-platform.
In part 2 of our shopper marketing glossary, we defined retail media network as:
A retailer-owned media agency that facilitates advertising in-store and/or within retailer-owned sites and apps. Some examples include Walmart Media Group, Kroger Precision Marketing and Roundel (Target). While retail media has always been a fixture in CPG marketing, many major retailers have recently created their own media groups instead of working through third-party agencies to offer CPG brands advertising and marketing opportunities. While retail media networks are typically associated with on-platform opportunities, we may see them expand to support off-platform contextual commerce tactics.
Various internal and external shifts, such as phasing out third-party cookies, decreasing print circular investments and increase in ecommerce and web traffic, have incentivized retailers to monetize their own media and data themselves and directly foster relationships with their CPG and brand partners. As a result, more retailer data than ever before is coming into play, meaning first-party data that brands historically lacked is unlocked.
But what exactly is retailer data? It’s actually pretty simple. Retailer data is typically collected from store loyalty accounts (which shoppers are usually incentivized to use because they offer exclusive member-only discounts or coupons). Anything that a shopper purchases using a scanned loyalty card or through a loyalty account can be fed into a targeting or measurement algorithm. This can apply to in-store purchases as well as online purchases, along with device location.
Generally, there are two ways that brands can use retailer data:
Targeting (pre- and during a program): Like retail media networks, brands can use retailer data, such as data collected from loyalty cards, online purchase history and store credit cards, to target shoppers. Targeting a known bagged salad buyer with an ad for a new salad dressing product is more likely to result in a purchase than targeting a shopper who hasn’t purchased bagged salads in the past 26 weeks.
Measurement (post-program): Brands may also use retailer data to analyze the effectiveness of a certain program across audiences like active, new, lapsed and return shoppers. On-platform media tactics like sponsored search and sidebar ads on a retailer’s website, always use a combination of targeting and measurement tactics using retailer data. This way, brands provide the investment and targeted product(s) and retailers use their shopper data to target shoppers and measure the program’s success.
However, there are many ways to use measurement to gauge the campaign impact at the retailer, brand and category levels. Here are three of our top real-life examples from the Chicory network to help you visualize measurement using retailer data.
New and Lapsed Shoppers for the Retailer
Shopper marketers agree that on-platform tactics like sponsored search and in-store trade promotions are a no-brainer to reach shoppers who are in that particular retailer’s market. But those on-platform tactics generally only reach those who are already retailer customers. On the other hand, off-platform tactics like contextual shoppable advertising within recipes, which closely connect inspiration to purchase, are exceptionally effective methods to drive new shoppers, who have not been customers at particular retailers. A study commissioned by Chicory for a particular shoppable media campaign found that the standard lift across all promoted retailers was above the 14.94% benchmark. This demonstrated that Chicory’s contextual media drove new shoppers to each of the promoted stores at higher rates compared to audiences who weren’t exposed to Chicory’s media. Varying by store, lift ranged from 22.31% all the way to 40.57%. Using a contextual commerce strategy in off-platform environments, brands can demonstrate support to their partner retailers by driving new retailer customers, while also promoting their own brand and products. Additionally, this is an option for smaller brands with smaller budgets that can’t compete with large national corporations that have heavy investments for on-platform opportunities.
New and Lapsed Shoppers for the Brand
In a more traditional sense, contextual media is a proven tactic to find new and lapsed buyers for the brand. Chicory worked with a major pasta sauce brand to drive sales among new and lapsed shoppers of the brand. In partnership with Chicory and Kroger’s 84.51°, the brand used a new recipe strategy that presented their brand on all kinds of “quick and easy” recipes within the 5.4 million recipes in Chicory’s network. While Chicory used contextual targeting strategies within our own network, we utilized 84.51°’s valuable retailer data to measure the campaign’s success. As measured by an 84.51° sales attribution report, the campaign drove 1.63x in ROAS, with a quarter of buying households comprising new and lapsed shoppers of the brand. 14.6% of those shoppers were comprised of new shoppers and 9.60% were lapsed. In this instance, retailer data was able to measure granular program effects, including how many valuable new shoppers were brought to this brand, without requiring retailer data for targeting purposes. It’s this creative mix of contextual commerce tactics and measurement using retailer data that ensured the success of this campaign.
Drive Household Penetration During an Occasion
A household name soft drink brand wanted to reactivate lapsed shoppers and drive household penetration among Kroger shoppers during the fall tailgating season. To do so, they worked with Chicory to target classic game day recipes and insert shoppable ads within the content that resonated most with its tailgating consumers. All ads targeted shoppers within zip codes where Kroger and Kroger's banner stores were located and a commerce-enabled CTA drove shoppers to Kroger.com product pages. Using recipe content to extend the reach of their messaging outside of the retailer’s ecommerce site, the campaign drove $680K in sales at stores, with over 25% ($170K) of those sales attributed to lapsed buyers by the 84.51° campaign analytics team. Results also included 6.81x ROAS, with 13.9% of total sales attributed to new shoppers and 25.6% attributed to lapsed shoppers. In this instance, this household brand already had a strong foothold among its users but was able to increase household penetration in key DMAs.
Brands need to leverage the value of working with retail media networks and retailer data in order to ensure that their campaigns are accurately measured and that results are easily quantifiable. While on-platform tactics will always remain a large part of shopper marketers’ toolkits, off-platform opportunities expand targeting and campaign options, while still demonstrating support to partner retailers.
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