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Welcome to a new week. Black Friday may be starting early this year, but don't forget Halloween. Americans are ready to do the time warp, statistically speaking. Spooky season participation rates are expected to be back to 2019 levels, according to the National Retail Federation. While many can agree on their love of frights, favorite candy is a matter of regional preference. According to Instacart, Eastern states tend to prefer peanut M&Ms and Twizzlers, while Western states tend toward Reese's Peanut Butter Cups and Red Vines. Digital shelves are being stocked accordingly.
Here's a look at what's on the schedule in ecommerce and retail this week:
Here’s where retail, ecommerce and CPG leaders are gathering this week:
DTCx Retain: Direct-to-consumer leaders gather in LA for three days of learning from founders, hands-on workshops and giveaways. Keynotes and panel discussions will feature leaders from LOVE Wellness, Gorgias, True Classic Tees, Klaviyo, Liquid Death and more. Virtual attendance available. Oct. 19-21
Supply Chain Visibility Summit: GSI US presents a virtual event to educate industry leaders on gaining visibility into digital supply chains. Topics include: Creating greater efficiencies and resilience, strengthening trading partner relationships and acquiring new customers. Oct. 20, 1-3:30 p.m. EST.
Modern Retail DTC Summit: What does DTC marketing look like in a changed landscape? That's the question that will be explored in Miami by leaders of Stitch Fix, Levi's, Poppi and more. Follow along at the Modern Retail Twitter account for takeaways. Oct. 17-19
Path to Purchase Institute Live: Top brands and retailers like Kroger, Mondelez and General Mills gather in Chicago. The event features curated sessions, an expo showcase, networking and more. Focus topics include retail media, BevAlc, omnishopper and more. Oct. 18-20
The focus of this week's data on the economy turns to housing. This is a key area both for the home goods industry, and the consumer economy as a whole at a time when the Federal Reserve is making moves to cool demand to bring down inflation. Last month, Chairman Jerome Powell said that the housing market will likely need a “correction” to get supply and demand back into balance.
- New residential construction will be reported by the US Commerce Department. Wed., Oct. 19, 8:30 a.m.
- Existing home sales will be reported by the National Association of Realtors. Thurs., Oct. 20, 10 a.m.
Third quarter earnings season swings into full gear with a number of bellwether brands in consumer goods, tech and more. Here’s a look at reporting companies relevant for ecommerce and retail:
- Mon., Oct. 17: Bank of America
- Tues., Oct. 18: Netflix, Albertsons, Johnson & Johnson, Hasbro, Omnicom
- Wed., Oct. 19: Procter & Gamble, Tesla, Prologis
- Thurs., Oct 20: Snap
- Fri., Oct 21: American Express, Verizon, Simply Good Foods
Trending in Economy
Retail media networks must drive sales incrementality, a new report from the Association of National Advertisers states.
Retail media networks are creating a new layer to the relationship between brands and retailers, and a new report indicates that brands in particular are still navigating the growing pains.
The last two years brought fast growth of retail media networks, as retailers recognized the value of providing advertising opportunities through ecommerce marketplaces that grew rapidly during the pandemic, and the value of the first-party data they possessed in a world where third-party cookies and IDFA are becoming less valuable tools. For a historically low-margin business like retail, digital advertising also presents an opportunity for a high-margin business line of 50-70%.
Brands have proven to be eager adopters as they sought new ways to reach customers in this environment, as well. According to eMarketer, ad revenue from retail media networks will reach $52 billion in 2023 and $61 billion in 2024. Over the next two years, retail media will account for one in five digital ad dollars spent by marketers. The spend is only expected to grow. According to a survey from the Association of National Advertisers (ANA), 73% of brands said they expect to be spending somewhat or significantly more on retail media in the future than they do today.
However, this proliferation has also created “more marketing decisionmaking complexity for advertisers,” ANA CEO Bob Liodice said in a new report.
The need to navigate multiple networks and still-developing tools to maximize the opportunity presented by retail media is leading to a multitude of approaches. Layer on top of that the fact that brands are both selling goods and advertising through retailers, and it’s clear the landscape is being reshaped.
A recent report from the Association of National Advertisers uncovered the areas where fault lines may emerge under the surface:
- Reluctant buyers: 88% believe they are somewhat or heavily influenced by retailers to buy advertising on retail media networks.
- A multitude of players: 56% said they are currently working with five or more different retail media networks.
- Differing goals: Two-thirds of respondents see driving conversion as the most important investment. Only 12% indicated the most important objective was “to invest for future brand growth,” and 7% cited “to drive awareness.”
The results underscore key areas where relationships between brands and retailers can be strengthened.
Sales vs. growth. Retail media must be able to drive both conversions of a single sale in the lower funnel, and brand equity growth in the mid- to upper-funnel.
As one respondent put it, "The jury is still out on if the RMNs are truly driving sales incrementality."
This also has implications for how a brand is budgeting retail media. Some brands are shifting dollars from shopper marketing, brand marketing, and trade spending, which could put the emphasis on short-term sales. But as another respondent put it, "There is concern that while attribution shows RMNs are driving brand sales, they are not necessarily driving brand growth. This is especially concerning where incremental RMN spending is being sourced from brand building budgets."
Standard measurement. Brands want to see an improvement in transparency in measurement. They also want results to be measured in the same ways across platforms. Further, brands believe retail media networks are not fully optimized for their KPIs.
This all leaves room for retailers to show they truly understand what brands are seeking from retail media, and show how they are delivering, all while reducing complexity.
As the report put it, “The next phase of growth for RMNs and value creation for brands will be through RMNs assuming shared responsibility with advertisers for driving brand growth, and demonstrating the ability of their platforms to drive incrementality and positive ROAS for brands. In other words, the next stage of growth will be driven by results versus relationships.”