Commerce media – What is it & how is it different from retail media?

According to McKinsey, commerce media is using transaction data to gain audience insights to make advertising more effective by improving targeting, deliver relevant shopper/consumer experiences and connect impressions to sale, both online and in ‘physical’ stores.

It is about leveraging large-scale purchase and intent data to draw insights that add value to consumer experiences

Sounds vague and confusing? Read on.

Commerce media covers all possible uses of retail data

Commerce media includes the use of insights generated by (online & otherwise) retail data in the online & on-site retail universe. This covers not only the retailer or the brands sold by the retailer, but also third party service providers who want to increase their ROI on marketing spend. They do this by targeting shoppers in a way that they previously could not do before.

Amazon was an early pioneer in this space and now other retailers are catching up fast.

However, supermarkets and other retailers are fast developing retail media networks of their own (Source: McKinsey).

Commerce media also gives retailers in low margin industries (like grocery & FMCG retail) the opportunity to increase margins by selling these insights along with online/on-site advertising space. We all know that consumers already want personalized experiences and only relevant ads. By leveraging retail media, companies will soon be able to deliver targeted ads and experiences through which shoppers can buy within the context of a TV show or the Metaverse.

Insights generated by retail media networks can help companies deliver the targeted experience that consumers want. This in turn will result in higher ROIs that companies currently generate on their ad spend. Why?

Linking ad-impressions with customers and their purchases at a SKU level

According to McKinsey, it is the the ability to match unique customer IDs and ad impressions to stock-keeping-unit (SKU) sales which is disrupting the entire advertising ecosystem. 

This is evidenced by data on effectiveness as collected by McKinsey below.

Salesbeat has also released a recent podcast on this topic and an interview of the Commercial director of a retail media start-up, here


Other commerce media

While McKinsey, BCG, Accenture and Bain have all written extensively about how retail data can be leveraged for advertisements and marketing, a relatively less explored territory is using this data to optimise promotions and availability in stores.

To learn more about how this can be done, email me on veena@salesbeat.co.

Pantene/Walgreens collaboration to increase sales of Pantene SKUs

In 2013, more than 300 new haircare products were introduced in the U.S. and Pantene was struggling to stay relevant. Consumers were quick to switch to competition and the brand’s key retail partner, Walgreens, was losing confidence. Pantene needed to turn around brand performance at Walgreens to retain distribution, and increase penetration and retention without needed to develop new products under the Pantene brand.

Pantene’s target consumers were women in their late 30s to mid 40s who ‘enjoyed the confidence’ when they looked good. Pantene knew that one of the triggers for shopping for hair care is a ‘bad hair day’ caused by changes in humidity.

As neither women nor Pantene could influence weather, Pantene collaborated with Walgreens to provide daily ‘haircasts’ for women, telling them what to expect of their hair everyday, which Pantene product could help and which nearest Walgreens had it in stock. The daily haircasts were based on forecast humidity levels every day. Pantene and Walgreens used a multi channel approach for this campaign, leveraging social media, digital, mobile and in-store marketing.

Just by tracking humidity levels and making relevant recommendations to manage hair during days with high/medium/low humidity and ensuring that the closest Walgreens always had the relevant products in stock, Pantene was able to successfully out-compete the 300 other new brands and products that had been taking share from Pantene and achieved:

  • a 7% decline in sales vs prior year to a 24% increase in sales vs prior year
  • 10% uplift in sales vs plan for the year

In addition, Walgreens experienced an additional 4% uplift in sales for their haircare category as a whole.

If you are interested in learning more, Mobile Marketing Association has published a case study on this.