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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
Dark Search, Broken Signals, and What Comes Next for Retail Media
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[00:00:00] Kiri Masters: Every major retail disruption follows the same pattern. There's a constraint in the old system that gets removed. The customer wins and the profit engine that powered the incumbent [00:00:15] breaks. If you look back at the biggest disruptions in retail clerk service, grocery giving way to self-service, supermarkets, main street shops getting wiped out by Walmart bookstores losing to Amazon.
[00:00:27] They all follow the same patterns
[00:00:29] [00:00:30] There is a specific way that the customer wins in those scenario, whether that is getting their goods faster and cheaper, getting better assortment, getting delivery, and there is a new profit engine that is delivered by [00:00:45] the disruptor. That could be labor efficiency, scale buying. A marketplace or specialization, and I think we're watching this pattern repeat right now, and the profit engine at [00:01:00] risk is some existing forms of retail media.
[00:01:04] In this episode, I'm going to bring together a number of different. Themes and ideas that I've shared in previous episodes. If you're tuning in for the first time, [00:01:15] this might all be new for you if you're a long time listener. Some of these concepts might be familiar,
[00:01:20] but I think it's helpful to bring these all together.
[00:01:23]
[00:01:25] Kiri Masters: As I've shared before, aI enabled shopping poses an [00:01:30] existential threat to some formats of retail media. Here's the short version. When shoppers use chat, GBT, or Perplexity or Gemini, to research and narrow their options down, before visiting a retailer's site, [00:01:45] the retailer loses the browsing behavior that makes their ad business work.
[00:01:50] Fewer signals, fewer ad surfaces, and a fuzzy measurement story. I shared recently how I came to acquire a new [00:02:00] hairstyling tool cold, the shock, glossy, and my purchase journey looked pretty different to how it's looked in the past. I hashed out all of my options with chat CBT.
[00:02:10] I picked a retailer based on price and delivery, [00:02:15] and I arrived on that site having already decided on the exact skew. The retailers still got the sale, but they lost everything that happened before the sale, and that's the part that their retail media business is built on.
[00:02:29] We are now [00:02:30] calling this dark search. That is the growing share of shopping research that happens inside LLMs that's invisible to retailers. Nikki Baird, who is the VP of Strategy and Product at Aptos, who also writes a [00:02:45] great newsletter that is a little more skeptical on AI, enable commerce a link up to it in the show notes.
[00:02:51] She picked up the concept. This week and shared her own experience. Nikki had been shopping for specialty dog [00:03:00] food for her dog, who was a large breed older dog on a specific diet formula. Her usual brand was getting pricier and harder to find, so she asked chat GBT to recommend alternatives with similar recipes That she [00:03:15] could get more easily. Chachi BT gave her five options. She didn't follow its retailer links. She went to the retailers where she gets free shipping and searched for those brands by name. She ended up buying [00:03:30] her original brand at PetSmart after finding it in the store, but her intent was actually to switch to a new brand Purina,
[00:03:38] as Nikki said, who knows what my intent was? Only chat. GBT. [00:03:45] Amazon didn't know PetSmart, didn't know neutral, didn't know, and that is dark intent. And as she wrote, any retailer saying that it doesn't matter if all that activity happens on a platform LLM and not on their site because they [00:04:00] get the sale in the end is deluding themselves.
[00:04:03] So what should retailers and media buyers actually do?
[00:04:07] I've got four things to share with you. One is go where the inspiration starts.
[00:04:13] The inspiration [00:04:15] stage for many shopping journeys probably still happens outside of the LLM. It could be on social, could be on connected tv,
[00:04:24] it could be in out of home . Retailers still own the transaction data that [00:04:30] proves whether those upper funnel impressions actually worked.
[00:04:33] Travis Klinger, who is the Chief Connectivity and Ecosystem Officer at LiveRamp.
[00:04:39] Shared with me how he believes retail media is going to shift to more offsite, more [00:04:45] CTV, more social. The play here is using commerce audiences to fuel brand building and then closing the loop with real purchase data. Travis expects this to grow. He says, in the past, people would be like, [00:05:00] oh, you use audience for performance marketing.
[00:05:02] I think now you use audiences for all marketing. Miracle Ads is the only retail media [00:05:15] solution designed for both one P and three P Marketplace brands. Why does that matter? Marketplace sellers demand a seamless advertiser experience that still offers full funnel ad formats, and [00:05:30] retailers need a flexible solution that allows you to scale your media business.
[00:05:35] Learn more@miracle.com. That's M-I-R-A-K l.com.
[00:05:43] Number two, collaborate [00:05:45] on data or accept being blind. If shoppers stop leaving. Clues on retailer sites, commerce media networks need to bring in context from elsewhere other retailers, payment networks, travel platforms, and [00:06:00] clean rooms make this possible without sharing that raw audience data.
[00:06:04] Even Even the biggest grocer, would benefit from combining their replenishment signals with a specialty retailer's high intent category data.
[00:06:13] Number three, [00:06:15] optimize for the new shopper journey. When a shopper lands directly on a product page with their mind already made up, the product detail page becomes a mini homepage. Amelia VanCamp, who is the head of a agentic [00:06:30] commerce at Miracle, the sponsor of this podcast frames it this way. Retailers really have to think about.
[00:06:37] What is your ideal shopper journey coming from an LLM? If the user is landing on a PDP page, what ultimately are you trying [00:06:45] to drive beyond that baseline conversion? This means rethinking what happens on and around that page. Cross sells, sampling, loyalty, enrollment, replenishment, nudges
[00:06:58] without cluttering it [00:07:00] with more pop-up ads that nobody, certainly nobody is asking for. That. Amelia points to Sephora's, uh, trial program and loyalty integration as a model. She also notes that loyalty programs are having a bit of [00:07:15] resurgence in part because. Some LLMs encourage users to log into retailer apps to complete the checkout, which hands back some of the signal that dark search takes away.
[00:07:27] Number four, double down on physical [00:07:30] stores. No LLM can replicate. Physical presence in store remains the most defensible part of the current retail media stack. I've written about this before and I keep coming back to it. Because we're starting to see some really [00:07:45] interesting experiential capabilities that retailers are building out here for retailers with strong physical footprints, this is a natural hedge against digital disruption.
[00:07:56] Wrapping up here, the only real risk [00:08:00] is dismissal. Things are moving fast. Behaviors and technologies that were nascent just a year ago are becoming more common.
[00:08:09] I am not saying that onsite retail media is dead. I'm not saying sponsored [00:08:15] product ads are gonna go away. I am saying that the ground is shifting, and the retailers who treat this as someone else's problem are the ones most likely to get caught out. So you educate yourself, what's your own shopping behavior, and don't throw out the [00:08:30] baby with the bath water, but also don't pretend the bath water isn't getting cold.
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