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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
Part 2 - Growth Beyond Amazon: Tapping into Retail Media's Broader Opportunities
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[00:00:00] Kiri Masters: Let's address the elephant in the room. Amazon dwarfs every other RMN controlling more than 70% of all retail media spend. In my opinion, Amazon deserves this in many ways. They invested early and heavily and [00:00:15] continue to lead with innovation.
[00:00:17] They made all their media buying programmatic from the very beginning. So the planning, buying, and reporting is transparent and immediate. So there's a lot to love about Amazon advertising, but there is also a whole [00:00:30] world of retailers out there that brands can and should be tapping into.
[00:00:34]
[00:00:35] Kiri Masters: Today I'm again joined by Cody Berg, EVP of Connected Commerce and Retail Media Services at ACOA Group. Connected Commerce at ACOA Group is the [00:00:45] sponsor of this series. Welcome back, Cody
[00:00:47] Cody Tusberg: Kerry. Good to be with you again.
[00:00:48] Kiri Masters: Cody. Last week we talked about how brands are from Mars and retailers are from Venus, and why brands need to understand internal retailer dynamics to get the most out of those relationships [00:01:00] today.
[00:01:00] Let's dig into the world of retail media outside of Amazon. So tell me why should brands look beyond their top 3, 4, 5 channels?
[00:01:10] Cody Tusberg: Yeah, I think it's important. I mean, to your point, Amazon and Walmart dominate. You know, they were early [00:01:15] movers in retail media, but shoppers don't live in a single ecosystem.
[00:01:18] You know, our, our. Data shows that the average household shops six to eight different retailers each month, if you can believe that. And if you're only investing in the top two or three, you're actually missing where your shoppers are actually spending. Plus, [00:01:30] some of these other retailers offer better wholesale margins, so these growing channels can be more profitable overall, and retail media is actually a lever that brands can use to accelerate that growth.
[00:01:39] Kiri Masters: That's a really interesting point. Just to dwell on that for a second, I've heard this before as well, is that [00:01:45] for a brand, they might actually have better terms with other retailers and they might be actively trying to grow that business beyond just, you know, shoveling more dollars into the open mouth of, of Amazon.
[00:01:56] Ambient Noise: Yeah.
[00:01:57] Kiri Masters: So we know that brands typically work with only [00:02:00] five or six retail media networks. Various studies , have replicated that once we've got Amazon and maybe Walmart really locked in on the media side, how do you evaluate.
[00:02:12] Which of the next tier retailers [00:02:15] deserve investment? What kind of signals are you looking for as a partner to your client?
[00:02:19] Cody Tusberg: Yeah. Well I think you have to first of all look at the overall relationship and how that retailer fits into your overall growth plan. If you look 1, 2, 3, 4, even five years out, [00:02:30] we invest in certain retailers for very specific reasons.
[00:02:33] Retailers, you know, outside of Amazon, you know, you're working with a very captive audience that shops at that retailer or chooses that retailer for a very specific reason, and that creates nuances that are also differentiated. You can [00:02:45] find retailers that you can invest in that might be the best place to launch a new product.
[00:02:49] You might find that you're gonna have a lower cost to acquisition. You might find that your retail media investment is actually more incremental at another retailer outside of maybe the big three [00:03:00] or four that are there. Mm-hmm.
[00:03:01] Kiri Masters: Let's talk about operational complexity, and
[00:03:05] something I hear a lot from brands is that they don't have much of an appetite to extend because they perceive the effort to be, you know, expanding to retailer number 11, almost as [00:03:15] much effort as working with one of their, . Larger retailer partners.
[00:03:20] Ambient Noise: Mm-hmm.
[00:03:20] Kiri Masters: Why is it so difficult to extend beyond retailer 5, 6, 7?
[00:03:25] Cody Tusberg: Well, it's, you know, you're, you're, again, you're working with a whole other set of information that. That comes in, [00:03:30] and when you start to stack these things together, it requires more horsepower, more people, or more tools and technology. One of the reasons that we built our organization the way that we did is because we can scale very effectively across those different ecosystems, whether that's just simply through knowledge [00:03:45] and understanding exactly how those retailers operate, or whether it's the investment that we can make at scale in technology solutions that just frankly, drive a more efficient outcome while still maintaining better results.
[00:03:56] Kiri Masters: So Amazon has closed loop attribution, but [00:04:00] many other retailers don't, and they are sometimes criticized for grading their own. Homework you just mentioned measurement. How should brands approach measurement and prove ROI when the data isn't as clean?
[00:04:13] Cody Tusberg: It is a great point.
[00:04:14] You know, [00:04:15] the data is not only not as clean, it's fragmented. It's differentiated. Um, things like attribution windows are generally gonna be different. The industry, I think is doing its best to work towards some level of standardization, but you also have to realize that what success [00:04:30] looks like at one retailer may be different than what success looks like at a different retailer.
[00:04:34] That's why we're gonna leverage the media metrics, for example, that are there in front of us. We're gonna use those to optimize things like media, but how we measure actual outcomes. You know, it's gonna come down to. Did we sell more stuff? [00:04:45] Did we sell more stuff than we did last month or last year? And that comes down to was the investment actually incremental?
[00:04:51] And sometimes when you're working with, let's say, a less sophisticated retail media network where you may not even have access to some of the KPIs that we've grown to love at a Walmart. Or an [00:05:00] Amazon, this is where you need to work. You know, either internally or work with a partner that just frankly understands good old fashioned marketing, good old fashioned measurement, and the fact that, you know, the ultimate objective is to move more shipments, to move more , pos, and to put more product on the floor.
[00:05:14] Kiri Masters: What about these [00:05:15] brands, uh, that might be smaller or they have limited resources, what's the smartest way to activate across multiple smaller RMNs without recreating the wheel each time?
[00:05:26] Cody Tusberg: Yeah, I think it's really important to understand what your internal cost to [00:05:30] serve. Is across those retailers, most of the time what you're gonna end up finding is, you know what we talked about a little bit earlier.
[00:05:36] It's just too hard to do that internally. I think this is where partners come in and you're gonna find partners out there, um, including partners like us that are very. Good at [00:05:45] this. They're very good at scaling across multiple retail media networks, not only from an activation standpoint, but from a strategic activation standpoint.
[00:05:52] So I would highly encourage brands that are out there to look for a great partner if they don't have the capacity internally.
[00:05:58] Kiri Masters: Yeah. And, and as a little [00:06:00] preview to our, uh, part three of this series, we're definitely gonna be diving deeper into managing a multi retailer RMN stack. So stay tuned for that one.
[00:06:10] But Cody, we, we talked in the last episode about the org chart. Within a [00:06:15] retailer, including the merchant org and the retail media org, and how they're not necessarily always on the same page. What are some best practices that brands should be baking into JVPs. With retailers that might have that kind of internal dynamic.
[00:06:28] Cody Tusberg: Yeah. I think it's really [00:06:30] important that you do bring retail media into that JBP conversation early, like we touched on in our last conversation, you know, but what we see today is sometimes it's thought of as an afterthought, right? You know, keep in mind that some retailers, not all. We'll, you know, give you below the line credit for, [00:06:45] incremental merchandising support.
[00:06:46] If you commit to media upfront, you know, that's a nuance that you'll see at some retailers. It's not always true across the board, but you have to understand how these investments are being measured. You know, we've actually seen brands unlock secondary displays or better feature placement by retail media into the [00:07:00] trade conversation.
[00:07:01] You know, it's about understanding. Success looks like internal for that retailer team that you're working with and creating a win-win situation.
[00:07:08] Kiri Masters: There is an argument that some retailers are using a stick model more than a carrot model to bring in retail media dollars. As in, [00:07:15] you know, there's a penalty for not spending, right?
[00:07:17] How true is that today? And if it is, how should brands navigate it?
[00:07:22] Cody Tusberg: Yeah, I think it exists in some cases. Theoretically. It may still exist in other places, I'd say, but the trend is really shifting [00:07:30] toward models or spend unlocks incremental value. You know, when you do encounter a stick scenario, the key is to reframe those conversations.
[00:07:37] You know, it's bringing it back to center and realizing that we're investing here. How do we make this work harder for both of us? You know, that's where connecting [00:07:45] trade media and merchandising becomes critical. At the end of the day, merchants and retailers, they want important selection for their brands, for their consumers to consume.
[00:07:54] So by leaning into that, creating a mutual win-win across the board, you're gonna. Essentially avoid that [00:08:00] stick model, you may encounter it, but it's all about how you navigate that, how you negotiate through that. And again, like I mentioned before, what are those win-win scenarios that we can lean into?
[00:08:08] Kiri Masters: We'll, we'll wrap it up there today, but in our next conversation, which is the last one in this series, we're gonna talk about how to actually [00:08:15] optimize, manage, and measure a multi retailer RMN stack. So I'll see you then, Cody.
[00:08:21] Cody Tusberg: We're looking forward to it. Kiri. We'll see you soon.
[00:08:23]