Collapsing the Funnel: GroupM’s Lavin on The Evolving Role of Retail Media
AMENIA, NY — The US market for commerce media is maturing rapidly, with clients no w focusing on more asking questions beyond basic education. They are seeking ways to prove the effectiveness of their spending and drive incremental sales across retailers.
Measuring the impact of commerce media investments has become a key challenge for brands. They want to understand how their spending is driving incremental purchases from existing customers and attracting new consumers to their brand.
"The ask is really for us to sort of implement a way of measuring and a way of looking at all of the data and their sales data holistically to ensure that we're driving incremental purchases and incremental consumers for them," says Lauren Lavin, Executive Director, NA Commerce, in this video interview with Beet.TV.
Overcoming Measurement Challenges
Lavin acknowledges there are many pain points in the current landscape, with brands needing to spend certain amounts with retailers who often have significant leverage as manufacturers. She says agencies like hers play a role in providing objective analysis and feedback to both retail partners and brands.
"It's our job to make sure that we are looking at it as objectively as possible and making sure that we are providing feedback to the retail partners on how they can provide better metrics and measurement and improve their ad products," Lavin says.
Agencies also have a responsibility to utilize tools, technology, and data to examine everything holistically and provide neutral investment advice to brands based on their specific objectives.
Collapsing the Funnel
Traditionally, retail media focused on capturing intent at the point of purchase when someone was searching on-site. However, with the wealth of data now available, brands see opportunities to drive awareness among people who may not be ready to convert immediately but are considering a purchase in that category.
"I think that as the retail media networks have sort of also developed a lot of other channels and new ad products for brands to invest in, I think that the way of thinking is really that we can sort of collapse that funnel," Lavin explains.
The emergence of shoppable upper-funnel ads is enabling brands to drive both awareness and conversion simultaneously.
The Power of Retail Data
Retailers possess vast troves of first-party data on consumer browsing and purchasing behavior, which is becoming valuable for brands. However, Lavin cautions that the cost of accessing this data can be prohibitive, especially for non-endemic brands.
"You're paying a premium for that data. And so I think that there are times, especially for non-endemic brands, so there need to be very choiceful about when they're sort of willing to pay that price for some of that retail data," she says.
Brands must carefully consider whether the insights gained from retail data are unique and justify the extra cost for their specific use case.
Lavin is excited about the prospect of everything becoming addressable and shoppable. She believes we are approaching a tipping point where brand media and commerce media will merge, and all media will become commerce-enabled.
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