Many might believe it’s never been easier to connect with people and win in e-commerce. True, e-commerce is big ($6tn in 2022) and growing fast (five times faster than offline, 55% of Gen Z has bought through social). This looks rosy, doesn’t it? But what if not all is what it seems? Underoptimized shopper experiences will soon negatively impact media spend and effectiveness.
Take a moment to think about how you shop today. You might discover a product on TikTok; buy on Amazon, follow on Instagram for content, sign up to a D2C mailing list – you might even tweet a complaint to the brand. Now consider how seamless that experience is within the organization. Quite often there are many teams involved vying for budget to hit different KPIs with different strategies, which can lead to a disjointed experience for the shopper.
To complicate matters further, the lines between what used to be distinct channels are blurring: marketplaces are building social features (like live shopping, influencer reviews, etc.); social media platforms are introducing commerce functionality; retail media networks (RMN) are rapidly growing in importance (each month a new one is created) and effectiveness; and, overall, the scale, scope and cost of e-commerce is outpacing more traditional channels like TV and press.
So, there’s an increasing disconnect between buyer behavior (which is largely channel agnostic and integrated across multiple platforms) and the way most brands operate (which is often not as seamless or well-integrated). And all of this is happening at a crucial moment when a fifth of global retail taking place in e-commerce and retail media investment is growing three times faster than total digital spend, according to IAB Europe.
What concerns me most is that in January 2023, advertiser spend was forecasted to be 11.4% in digital and 39% in retail media by 2024. That’s next year. Or in six months, to be precise. It doesn’t take a leap of the imagination to see how – amid a flurry of interest in retail media – e-commerce is at risk of becoming a colander when it comes to advertising spend. Clearly, advertisers need to address such challenges if they want to create sustainable growth in digital commerce.
In my mind, pivoting quickly to a customer-first rather than channel-first approach is a good start. That’ll help build journeys that combine intuitive content, relevant context and low friction conversion paths, across channels and platforms – underpinned by data-driven and continuous learning mechanisms. Creating what we call ‘connected commerce’ experiences like that should be the central obsession for advertisers no matter where they are on their commerce transformation journey.
RMNs are an important part of these connected commerce journeys as they allow advertisers to leverage shopper data and conversion measurement and reach consumers through multiple phases of the buying journey – using different sponsored product and display ad formats. This brings the ‘point of conversion’ as close as possible to ‘point of consideration’ and, importantly, does so in places where audiences are primed to consider and act on buying decisions.
Capgemini’s research identified that 74% of online shoppers have ordered from an online marketplace, so there’s plenty of opportunity for advertisers to capitalize on the level of customer intimacy created in direct-to-consumer platforms and strive to emulate the brand experience. Indeed, Kantar’s analysis of mobile campaigns running on Amazon found a 450% increase in purchase intent compared to similar campaigns on other platforms.
Credit:-https://www.thedrum.com/opinion/2023/05/25/retail-media-looming-over-e-commerce-ad-spend-and-could-backfire