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1、2About CatalystCatalyst is a performance marketing agency,serving some of the largest brands in the world.Omnichannel marketing services include paid search,SEO,digital commerce,and advertising solutions across programmatic,social platforms,Amazon,Instacart,and advanced analytics.As a part of the Gr
2、oupM and WPP agency portfolio,Catalyst focuses on driving more impactful acquisitions through integrated,full-funnel performance marketing strategies.These strategies extend beyond short-term KPI goals to fuel longer-term growth,drive deeper consumer relationships,and achieve enterprise-level object
3、ives.Learn more at About XaxisXaxis is the outcome media company and GroupMs advanced programmatic business.Xaxis helps global brands achieve the outcomes they most value from their digital media investments.Xaxis does this by combining innovative AI technology,advanced omnichannel solutions,data-dr
4、iven creative,and worldwide programmatic expertise to transform digital media into real business outcomes.Learn more at 348537ContentExecutive SummaryIntroduction Converging Forces Have Created a New Retail ParadigmSection 1The Rise of Retail MediaSection 2 Capitalizing on the Retail Medi
5、a Opportunity Section 3 The Strategic Importance of Retail MediaSection 4 The Current State of Retail Media InvestmentSection 5 The Continuing Omnichannel OpportunitySection 6 Key TakeawaysMethodology4The Retail Paradigm Putting things simply:Shoppers want simplicity,convenience,and better offers.Br
6、ands want to build closer relationships with shoppers based on their growing data footprint,but are challenged by fragmentation of touchpoints.Retailers want to capitalize on advertising and media investments as a revenue source after seeing their partners and competitors succeed.Retail media answer
7、s all these desires.Advertising on ecommerce sitesand using retailers data to target shoppers outside of these platformsgives retailers access to brands marketing budgets.It allows brands to personalize their communications with buyers,and to understand how effective those communications are for fut
8、ure campaigns.And it shortens the customer journey,often down to just one site,while allowing brands to reward customers with offers based on their potential long-term value.Welcome to the new retail paradigm.This report is a companion to the previous 2022 Catalyst/Xaxis study,The Retail Paradigm:Th
9、e Evolution of Consumer Shopping.There are many stakeholders in the increasingly complex retail ecosystem,but the three most important are the brands,the shoppers,and the retailers themselves.Over several years,some key trends have developed and converged to dramatically reshape the relationship bet
10、ween these three groups.Executive Summary5The Retail Paradigm:Executive SummaryThe first Retail Paradigm report looked at how shopping has evolved as the pandemic accelerated new consumer behaviors and market offerings.This one looks at how brands are responding,the barriers they face,and the furthe
11、r actions they need to take to thrive within this new paradigm.The main finding is that marketers have embraced advertising on ecommerce sites and are investing in their use of retailers data for offsite targeting,with the added bonus of mitigating the disappearance of third-party cookies.Almost fou
12、r out of every five marketers surveyed for The Retail Paradigm:How Brands are Investing in the Future of Shopping agree that retail media is strategically important for their company.The research,produced in partnership with London Research,also found that:Retail media is significantly ahead of all
13、other channels except social media in terms of marketing budget growth this year.The increased spend on social can be partly attributed to retail media.Shoppable mediathe ability to click on a link in a social post,web page,or video and be taken to a pre-filled ecommerce basketis another area that i
14、s booming.Marketers are responding to consumers fluid and flexible approach to shopping by increasingly moving to outcome-based budgeting and focusing on what works.The risk here is that short-term performance tactics are easier to measure than long-term brand-building,exacerbating the drift away fr
15、om brand marketing,which remains essential for long term success.The strategic importance of retail media,combined with the complexity of the retail media ecosystem,increases the reliance of brands on their agency partners for guidance and investment in this emerging space.Three-quarters of brands r
16、ecognize that retail media is shortening the customer journey and changing the role of search.However,they have yet to fully capitalize on the implications of these changes,especially in the way retail media can directly link advertising to purchase.Greater understanding will undoubtedly lead to gre
17、ater investment.The Retail Paradigm:Executive Summary6This report is based on a survey of 333 U.S.marketers working for brands and agencies.Marketers eligible for the survey represent companies(or clients)both selling physical products and investing in retail media advertising,with at least$50m in a
18、nnual company revenues,and$2m in annual marketing budget for digital media.For selected charts we have compared this years findings with the results from a similar survey of brands carried out for the 2021 Catalyst/Xaxis Closing the Gap Adopting Omnichannel Strategies for Stronger Brand-Consumer Con
19、nections report1.The report includes insights from a range of individuals working for brands,agencies,and retail platforms.Additionally,it draws on the findings from a survey of 2,000 consumers carried out in March 2022,featured more prominently in The Retail Paradigm:The Evolution of Consumer Shopp
20、ing.1 Closing the Gap:Omnichannel Strategies for Stronger Brand-Consumer Connections,Catalyst and XaxisThe Retail Paradigm 7Nora Abrego Director,Lead Generation,Catalyst,Part of GroupM Antoinette Chan Senior Product Marketing Manager,Xaxis Doug Chavez VP Strategic Partnerships,WPPKerry Curran Execut
21、ive Director,Performance Strategy&Growth,U.S.,GroupMJohn Denny VP eCommerce&Digital Marketing,CAVU Venture Partners Kelley Drake Senior Director,Marketing Communications,XaxisSofia Escasena Marketing Manager,Xaxis Alice Fournier VP Global Digital Development and Chief Digital Officer,WD-40 John Karl
22、 Head of Client Development and Growth,Catalyst,Part of GroupMJerome McLeod Product and Innovation Manager,Xaxis Brittny Schoeneman Director of Programmatic Commerce Solutions U.S.,Xaxis Michael Schuh VP of Media Strategy,Kroger Precision MarketingKristina Smith Head of D2C,Big Island Coffee Roaster
23、s Benjamin Sylvan GM,Retail Data Partnerships,The Trade DeskRich Tan Director of Revenue Management,OrgainAcknowledgementsCatalyst,Xaxis,and London Research would like to thank the following people for their input into this report.8The Retail ParadigmThe partner report to this oneThe Retail Paradigm
24、:The Evolution of Consumer Shoppingexplored consumers attitudes to the retail experience.It found that post-pandemic shopping behaviors are still fluid and flexible:Shoppers are returning to physical stores,but they are not abandoning the behaviors that made their lives easier during lockdown.The ro
25、le of search engines is changing because they are no longer the default starting point for customer journeys.The ritual of the big weekly shop is being replaced as consumers adopt a variety of new collection or delivery options.Saving money is the single biggest factor in consumer choice,as the cost
26、-of-living crisis starts to bite.More consumers(including two-thirds of 18-34s)say they are buying directly from brands more often since the start of the pandemic.Consumers have become even more accepting of retail media in the past year.In particular,the proportion of over-55s saying theyre recepti
27、ve has increased by 22%to 72%.Introduction Converging Forces Have Created a New Retail Paradigm A new retail paradigm has emerged.The rise of ecommerce accelerated by the pandemic,the impending demise of the third-party cookie,the growth of retail media,and the cost-of-living crisis are just four of
28、 the forces driving the emergence of a new relationship between shoppers,retailers,and brands.9The Retail Paradigm:Introduction Converging Forces Have Created a New Retail ParadigmThe result of these changes is a dramatic shortening of the customer journey.The entire buying process,from discovery to
29、 purchase,is increasingly happening on a single platform,whether thats an ecommerce site such as Amazon or Walmart,a search engine like Google,or a social platform such as Instagram empowered by shoppable media.What is retail media?Retail media can be defined as the advertising that appears within a
30、 retailers properties,or that uses retailer-owned data to target prospects and customers outside of those properties.The idea of promoting products to shoppers using in-store displays and product trials is long-established,but the digital equivalent actually emerged a decade ago,when Amazon launched
31、 Sponsored Products and Sponsored Display.This is a convergence of shopper marketing and ecommerce strategies.Since then,Amazon has continued to develop its offerings,while other retail giantsincluding Alibaba in China,Target,and Walmart in the U.S.,and Carrefour and Casino Group in Francehave follo
32、wed suit.The other side of the retail media offer first launched in 2013,when Amazon unveiled a DSP-based audience extension tool using its shopper data and premium publisher-partner relationships.Since then,other retailers have introduced retail media networks,including Target with Roundel and Walm
33、art with Walmart Connect.These platforms help brands reach their consumers at scale using retailer data for targeting,optimization,and online/offline measurement.10For the retailers,this is like discovering a goldmine under the grocery aisle.They can turn data theyre already collecting into a new re
34、venue stream.Meanwhile,shoppers get more relevant communications and more targeted promotions.Everybody wins.Pandemic-driven changes are here to stayThis report,based on a survey of more than 300 marketers across the U.S.,confirms how brands view these changes(Figure 1).Almost three-quarters(70%)agr
35、ee the pandemic significantly changed consumer behaviors,and a similar proportion(75%)believe the changes are here to stay.This is especially exciting for CPG brands.They are particularly conscious of the demise of the third-party cookie,since their market distribution model relies on retailers rath
36、er than direct to the consumer.This means they have little or no first-party data to fall back on.Partnering with retail media networks not only gives them a new way to target potential buyers using detailed shopper data,but it also provides a more direct link between advertising and purchase,and a
37、way to test campaigns and products as a result of the shortened customer journeys.“The open internet opens up who marketers can reach,allowing them to find all of a retailers buyers wherever they consume media vs.only those who buy on the retailers ecommerce platform.Theres going to be a lack of ric
38、h audiences as the third-party cookie goes away,so advertisers will turn to retail media to help them find high-value audiences across the web.”Benjamin Sylvan,GM,Retail Data Partnerships,The Trade DeskThe Retail Paradigm:Introduction Converging Forces Have Created a New Retail Paradigm1138%36%21%29
39、%43%21%32%43%18%33%44%16%34%43%16%35%37%20%35%38%20%36%34%19%37%37%18%Figure 1To what extent do you agree with the following statements relating to the evolving online customer journey?The Retail Paradigm:Introduction Converging Forces Have Created a New Retail Paradigm Strongly agree Partially agre
40、e Neutral Partially disagree Strongly disagreeOur customers are increasingly buying our products directly via shoppable media(i.e.,clicking through and purchasing directly from social media adsThe Covid-19 pandemic has significantly changed customer behaviorShoppable media is a significant opportuni
41、ty for our brand or brandsOur customers and prospective customers are using search engines differently due to the evolution of retail platforms(e.g.,Amazon)We are investing in direct-to-consumer(D2C)as well as digital retail platformsRetail data about consumers is more valuable and more timely than
42、cookie-based dataThe shifts in consumer behavior weve seen over the last two years are here to stayThe customer journey is becoming shorter and more immediateWe are closely monitoring the way consumer habits and behaviors are changing10%4%7%6%7%5%6%5%5%1%1%1%1%1%2%1%2%2%12In addition,almost three-qu
43、arters(72%)agree that the consumer journey has grown shorter,and that shoppers are using search engines differently(72%).And more than three-quarters(77%)agree that retail data about consumers is more valuable and more timely than cookie-based data.Combine all this with the continuing growth of ecom
44、merce,and the increasing consumer acceptance of retail media marketing found in the first Retail Paradigm report,and it becomes clear that the nature of retail is set for dramatic change.The Retail Paradigm:Introduction Converging Forces Have Created a New Retail Paradigm“Online adoption role signif
45、icantly in the last two years because of Covid,resulting in the acceleration of ecommerce shopping.Now manufacturers have to re-evaluate how they go to market with their shoppers and consumers.That means establishing their digital presence where shoppers are looking,having engaging content,answering
46、 the most common consumer questions/needs,and aligning their in-store and online strategies accordingly.It has obviously made manufacturers relook at the playbook they are using.”Rich Tan,Director of Revenue Management,Orgain13The Retail ParadigmAlthough the growth in ecommerce is unlikely to contin
47、ue at the rate seen during the height of the pandemic,predictions are that it will remain significant.GroupM projects global ecommerce sales will grow by 19%in 2022,to$6.2 trillion,before slowing down slightly to 16%in 2023,and 15%in 20242.On the customer side,the first Retail Paradigm report found
48、consumers across all age groups plan to spend more time on all the retail sites included in the survey,with the youngest age group(18-34)being the most enthusiastic about ecommerce.Half of these consumers expect to use Amazon and Walmarts websites more than in the past in the next 12 months.This is
49、backed up by the research for this report.Two-thirds of company respondents(68%)expect their online sales to increase over the next 12 months,compared to only 4%who expect a decrease(Figure 2).The Rise of Retail MediaSection 1The most powerful force behind the growth of retail media is the growth of
50、 ecommerce itself.The more people shop online,the bigger the audience for retail media advertising.2 Emerging Stronger,Building Brands in a Transformed World,GroupM14The Retail Paradigm:The Rise of Retail MediaFigure 2As a proportion of your overall sales,do you expect your online sales to increase
51、or decrease over the next 12 months?“These retailers represent something very interesting and unique because theyve become publishers.And the traffic to these sites will continue to increase where a lot of other publishers are dealing with a decline in monthly active users,because paywalls have gone
52、 up and so forth.Theres no paywall here.Theres a constant stream of people coming in,spending a decent amount of time because theyre shopping.”Doug Chavez,VP Strategic Partnerships,WPP IncreaseStay the sameDecrease68%28%4%15The Retail Paradigm:The Rise of Retail MediaRetail media growth follows the
53、ecommerce boomAccording to eMarketer,Amazon will account for 39.5%of all U.S.retail ecommerce sales in 20223.In comparison,the next 14 largest ecommerce firms together account for 31%of the market.Unsurprisingly then,Amazon also dominates the retail media sector.In 2021 it accounted for some$32bn a
54、year,10%of the U.S.digital ad market4.Its now the third largest online advertising property in the U.S.,behind only Facebook and Google.But,as noted in the introduction,competition is increasing,with other major players making a push in this sector,including Walmart,Target,and Kroger.Below them,a ti
55、er of specialist stores and platforms are starting to experiment with retail media.The retail media market,which was worth$31.5bn in 2021,is forecast by eMarketer to reach$50bn in 2023.This is reflected in marketers budgeting plans for 2022(Figure 3).3 Amazon US Ecommerce Market,eMarketer4 The Rise
56、of Retail Media,Colin Lewis16Figure 3Has this year seen an increase or decrease in your budgets for these advertising and marketing channels?More than 10%increase 1%-10%increase No change 1%-10%decrease More than 10%decreaseThe Retail Paradigm:The Rise of Retail Media28%35%29%6%2%Ecommerce and retai
57、l media 21%35%30%12%2%Digital in-store advertising16%38%39%6%1%Digital out of home(DOOH)27%44%22%5%2%Social media advertising20%36%36%7%1%SEO(organic search)/PDP optimization16%44%31%6%3%Affiliate marketing23%38%29%9%1%Mobile advertising19%39%33%7%2%Video,including ad-funded video on demand(AVOD)15%
58、37%35%10%3%Connected TV(CTV)/over-the-top(OTT)13%41%36%8%2%Audio/podcast/radio22%42%25%9%2%Online display advertising17%37%34%9%3%Paid search15%32%43%8%2%Esports branded in-game ads/experiences13%32%38%12%5%Traditional/linear TV22%35%34%8%1%Influencer marketing16%45%28%8%3%Addressable TV(ATV)14%41%3
59、2%11%2%In-store/shopper marketing11%31%45%11%2%Out of home(OOH)17Figure 4Is your company investing in shoppable media(e.g.,allowing consumers to buy directly from a social media ad)?This shows retail media and social media significantly ahead of all other channels in terms of marketing budget growth
60、.Both have seen over a quarter of marketers increasing their spend by more than 10%.At the same time,although a third of marketers(35%)have increased their spend on retail media by up to 10%,a higher proportion(44%)have increased their spend on social media by up to 10%.However,even this may be expl
61、ained by the retail media boom.Social media is one of the main channels for the sub-category of shoppable mediathe ability to click on a link in a social post,web page or video and be taken to a pre-filled basket either on the platform or on an ecommerce site.As Figure 4 shows,almost three-quarters
62、of research respondents(70%)are investing in shoppable media,with a further quarter(26%)planning to.The Retail Paradigm:The Rise of Retail Media70%26%4%Yes,we are doing thisNo,but we are planning to do thisNo,and no plans to do this18The Retail ParadigmConsumers fluid,whatever works approach to shop
63、ping post-pandemic(covered in the first Retail Paradigm report)is driving a new era of flexible,agile marketing(Figure 5).Four out of five respondents(82%)agree that their marketing budgets are fluid and based on whats working,while three-quarters(75%)say they set aside budget for emerging marketing
64、 channels even where the likely ROI is unknown.Capitalizing on the Retail Media OpportunitySection 2Figure 5Do you agree with the following statements relating to your budgeting and planning for marketing and advertising?41%40%14%32%43%17%36%46%12%38%43%13%40%37%19%Strongly agree Partially agree Neu
65、tral Partially disagree Strongly disagreeWe are focused on providing personalized and relevant advertising for consumers across all channelsWe are confident we are getting value from our overall marketing and advertising spendOur marketing budget planning is fluid based on whats workingWe set aside
66、budget for emerging marketing channels even where the likely ROI is unknownOur marketing budget has become more dynamic and real-time based on evolving consumer behavior5%5%4%4%7%1%2%1%19The Retail Paradigm:Capitalizing on the Retail Media OpportunityThis finding is reiterated by the results shown i
67、n Figure 6.More than half of brands(53%)are now taking an outcome-based approach to their marketing budgets,a slight increase from 20215.Meanwhile,the proportion budgeting purely based on sales targets has halved in the same period.The chart also shows that the proportion of brands basing their budg
68、ets on the previous year has doubled from 2021 to 2022.This likely reflects the conditions that are driving the adoption of outcome-based marketing.At a time of so much uncertainty,a fluid,omnichannel strategy based around whats working is increasingly seen as the new normal.Figure 6What best descri
69、bes how you calculate your marketing and media budgets?5 2021 data is from the 2021 Catalyst/Xaxis Closing the Gap report.We base budgets on the previous year,with adjustments made based on performanceWe decide budgets based on outcome-based marketing,focus on achieving specific and unique KPIs for
70、our businessWe calculate budgets based purely on the sales we want to achieveWe keep the budgets the same year-on-year49%53%12%24%38%19%4%2021 20221%206The Rise of Digital Commerce,WARCThe Retail Paradigm:Capitalizing on the Retail Media OpportunityThe shift towards performance marketingHowever,the
71、risk of budgeting based on whats working is that some outcomes can be measured more easily and quickly than others.This was the point made in the WARC Rethinking Brand for the Rise of Digital Commerce white paper6 last year:“The ease of access to short-term metrics like cost-per-acquisition is intox
72、icating when compared with the relative difficulty and expense of measuring the commercial return on investment in brand-building.”Figure 7 illustrates this drift towards performance marketing.It shows a slight fall in the proportion of companies prioritizing brand advertising in their budgeting(45%
73、in 2021 to 42%in 2022),but a more marked increase in the proportion focusing on hitting sales targets(22%to 27%).Figure 7How would you describe your organizations priority when it comes to allocation of marketing and advertising budgets?2021 2022Sustaining our brand or brands over the long termMakin
74、g sure we achieve our desired outcomes,including brand and sales objectivesHitting sales targets in the short and medium term45%42%33%31%22%27%21The Retail Paradigm:Capitalizing on the Retail Media OpportunityThe risk is companies optimizing themselves out of effectiveness;concentrating too much on
75、harvesting demand and ignoring the need to create that demand in the first place.Retail media can balance the funnel In this context,companies reasons for investing in retail marketing are even more interesting (Figure 8).More than half(58%)say they do so to build awareness or extend their reach.Onl
76、y two out of five(41%)say they do so to drive conversions.But almost three-quarters(71%)do so to improve consideration or increase their share of the category.“Theres been a sea-change in advertising spend during the pandemic.Brand spend has plummeted,while performance spend has rocketed.CFOs and CE
77、Os are very suspicious of brand and much more comfortable with performance marketing.But investing in brand has an exponentially higher return over the long term than focusing completely on short-term performance.So thats a huge opportunity for challenger brands to do it differently.And its really a
78、 combination of the two;mid-and upper-funnel brand-building combined with lower-funnel demand capture.”John Denny,VP eCommerce&Digital Marketing,CAVU Venture Partners22Figure 8Why are you investing in retail media?The Retail Paradigm:Capitalizing on the Retail Media OpportunityIn other words,retail
79、media is currently seen as an upper-middle funnel activity,which is encouraging in terms of rebalancing the brand vs.performance debate.However,one of the key attractions of retail media is that it enables the entire consumer journeyfrom awareness to transactionto take place on the same site,and the
80、refore creates a great opportunity to join up demand creation and sales performance data.71%58%41%Grow consideration/increase share of categoryBuild awareness/expand reachDrive conversions/sales23The Retail Paradigm:Capitalizing on the Retail Media Opportunity“As the first Retail Paradigm report sho
81、wed,consumers are open to advertising on retail sites.They want to see product alternatives,which opens the door for brands to gain consumer consideration.This gives marketers the opportunity to integrate key consumer conveniences and perks into their ad copy and creative.”John Karl,Head of Client D
82、evelopment and Growth,CatalystMarketers certainly know this opportunity exists.Figure 1 shows almost three-quarters agree the customer journey is becoming shorter and more immediate,while a similar proportion agree their customers are using search engines in a different way.The fact that brands have
83、 yet to translate this into an understanding of the full-funnel capability of retail media suggests that their thinking around the channel is still underdeveloped,and that in the longer term,they will right-size their spending across awareness,consideration,and conversion.24The Retail ParadigmEven i
84、f many brands strategies around retail media are still developing,there is no question of how seriously they are taking the opportunity it offers.Almost four in five respondents(78%)agree retail media is strategically important for their company,while almost three-quarters(73%)have changed their ope
85、rational setup to maximize the retail media opportunity(Figure 9).This appears not to be a simple case of embracing the latest trend;a similar proportion(78%)base their retail media investment on a solid understanding of consumer behavior.Brands are also backing up their belief with investment.Just
86、under three-quarters(73%)have shifted budgets into retail marketing from other channels,while a slightly larger proportion(77%)have created new budget for the channel.This means the vast majority of advertisers have done both to support their ecommerce media investment.The Strategic Importance of Re
87、tail MediaSection 3“The biggest challenge we face at the moment is knowing where to invest and how much,and having the right data on whats moving the needle on that journey.Were not afraid of the investment,but we want to be sure what the investment brings.How do we know whats actually working?”Alic
88、e Fournier,VP Global Digital Development and Chief Digital Officer,WD-402539%39%17%4%1%35%43%16%6%35%38%20%6%1%33%44%16%6%1%28%45%23%4%27%44%21%6%2%The Retail Paradigm:The Strategic Importance of Retail Media Figure 9Do you agree with these statements relating to your retail and ecommerce media inve
89、stment?Strongly agree Partially agree Neutral Partially disagree Strongly disagreeWe base our retail media investment on a solid understanding of consumer behaviorWeve changed how we are set up operationally to maximize the retail media opportunityWeve created new marketing budget for retail media i
90、nvestmentWeve shifted marketing budget from other channels into retail mediaWe are reliant on agency partners for our retail and ecommerce media investmentRetail digital media investment is strategically important for our companyBarriers to retail media investmentGiven the reliance on agencies expre
91、ssed in Figure 9,its surprising to see agencies involved in two of the main barriers to brands investing more in retail media(Figure 10).Two in five respondents(41%)feel a reliance on traditional approaches to planning and buying are holding them back,while just over a third(36%)feel stymied by thei
92、r agencies lack of know-how and enthusiasm around the channel.26The Retail Paradigm:The Strategic Importance of Retail Media This should be seen in context of adoption of both retail media,and of an over-arching omnichannel approach to marketing.The Closing the Gap report found that marketers were b
93、ullish about their progress to a more integrated future,at least in digital,although the assimilation of offline channelsparticularly TVwith online remains a work in progress.The emergence of a new channel means rethinking all these relationships.At the same time,agencies are exploring retail media
94、and building their expertise to reflect their clients increasingly strategic focus.Inevitably,some will be more advanced than others.From this perspective,what Figure 10 shows is that around two-thirds of agencies are already delivering the help and advice their clients need.Figure 10Which of the fo
95、llowing are significant barriers to increased investment in retail media?41%Reliance on traditional media buying and planning31%Company culture36%Lack of agency know-how/encouragement28%Lack of transparency36%Focus on short-term sales27%Lack of business case35%Challenges around measurement and attri
96、bution22%Lack of boardroom buy-in33%Concerns about brand safety7%None of the above27Whats clear is that this is still an emerging sector that shows a long runway to maturity.Brands need to find the right partners now,and have dedicated and detailed discussions of their current and future retail comm
97、erce strategies.Other perceived barriers reflect issues already raised in this report.A third of brands(36%)are worried that a focus on short-term sales(as discussed in Section 2)is holding them back.Meanwhile,the challenge around measurement and attribution for around a third of brands again sugges
98、ts that,while marketers grasp the importance of the retail media opportunity,the detailsin particular the shortened customer journeyare not yet fully understood.The Retail Paradigm:The Strategic Importance of Retail Media “As agency partners,we can help clients navigate and make connections to all t
99、he retail media platforms as well as understand whats happening across all of them if we have direct line of sight.Using our tools,we can give clients answers to how their media is performing and be a strategic guide for their investments.Its about having a partner thats going to help resolve all th
100、e confusion and bring it all together,as much as it is about understanding the specific offerings and unique value propositions that each retailer can offer.”Brittny Schoeneman,Director of Programmatic Commerce Solutions U.S.,Xaxis28The Retail Paradigm Previous sections have discussed how brands are
101、 thinking about retail media;Figures 11 and 12 give a snapshot of what theyre actually doing.Figure 11 shows that advertising on ecommerce sites is significantly more mature than the use of retailers data to power offsite targeting.The high usage of display advertising,sponsored ads,and retail searc
102、h is also consistent with the findings shown in Figure 8,that marketers see retail media as a channel for growing awareness and building consideration,rather than driving conversion.The Current State of Retail Media InvestmentSection 4Figure 11How are you investing in retail media?61%Online display3
103、5%Offsite display/video demand-side platform(DSP)54%Sponsored ads:Amazon22%PromoteIQ47%Retail search18%CitrusAd43%Product detail page optimization(PDP)17%Criteo42%Sponsored ads:Other retailers29The Retail Paradigm:The Current State of Retail Media InvestmentIn terms of where brands are spending thei
104、r advertising budget,Amazon remains the destination of choice(Figure 12).Two-thirds(67%)of survey respondents say they plan to increase their spending with the retail giant.Whats also striking is that,among traditional retailers,only Walmart is attracting anything like a similar level of spending in
105、crease(49%of respondents).And while just over a third of marketers(36%)intend to spend more with Target,the main beneficiaries are all otherwise social media sites.This reinforces the fact that shoppable media has caught marketers attention,as shown in Figure 4,where we saw that 70%of marketers are
106、already using shoppable media,and that a further 26%are planning to.Competition in this space continues to grow with the big names in social media expanding their offerings.For example,late in 2021 Meta announced that Facebook Shops would be expanded to Facebook Groups and News Feeds.TikTok piloted
107、TikTok Shops in partnership with Shopify in summer 2021,and subsequently announced further partnerships with Square,Ecwid,and PrestaShop.And around the same time,Pinterest launched a Shopping List feature that allows users to store all their product pins in one place and alerts them if prices change
108、.30Figure 12Are you planning to spend more or less on your advertising on the following websites and retail media platforms?The Retail Paradigm:The Current State of Retail Media Investment More than in the past Same as in the past Less than in the past67%31%2%Amazon33%50%17%eBay45%39%16%TikTok24%57%
109、19%Instacart51%41%8%Google27%63%10%Best Buy43%44%13%Instagram24%55%21%Home Depot49%42%9%Walmart27%54%19%Pinterest41%50%9%Twitter24%56%20%Costco46%41%13%Facebook27%51%22%Macys36%49%15%Target24%52%24%Kroger“The genius of Amazon is what I call dark matter.Dark matter powers the expansion of the univers
110、e,and Amazon is the same;if it sees that you are a hot product,it will surface you everywhere and you will see sales acceleration like you have never seen.Youve got to have a nimble organization that thinks fast and understands the power of platforms like Amazon,and that Amazon is the center of your
111、 strategy,because its influencing everything.”John Denny,VP eCommerce&Digital Marketing,CAVU Venture Partners31The Retail Paradigm:The Current State of Retail Media InvestmentFigure 13Are you investing in any of the following as part of your retail media/ecommerce advertising strategy?Programmatic c
112、apabilities dominate brands infrastructure investmentLooking further ahead,Figure 13 shows the infrastructure investments brands are making to underpin their retail media strategies.This offers a counterpoint to the findings of Figure 11,as it shows that,while brands are currently investing in on-si
113、te advertising,theyre looking to develop their capabilities on the DSP side of retail media.Once again,Amazon is the dominant force,with over half of respondents investing in its DSP,but its notable that more than a third are investing in Walmarts DSP,and a quarter in Targets.Amazon DSPData manageme
114、nt or customer management platforms(DMP/CMP)Ecommerce supply chain managementData asset management(DAM)Walmart DSPDigital shelf analyticsDemand-side platform(DSP)/supply-side platform(SSP)retail partnershipsThe Trade Desk(TTD)Back-end web infrastructureFront-end web infrastructureAd server technolog
115、yProduct inventory management(PIM)Roundel(Target Media Network)SSPBid management platform52%35%28%44%35%27%43%31%24%39%29%23%36%28%32The first Retail Paradigm report concluded that:“For consumers,omnichannel means adopting whatever mix of in-store and online,or collection and delivery,best suits the
116、ir needs in the moment,and changing whenever things no longer work for them.As a result,the pressure is on marketers to deliver a coherent,consistent experience at every touchpoint,and to be able to respond to every customer interaction,no matter how fleeting.”This,combined with the evidence that Am
117、azon in particular influences every part of the customer journey,shows its imperative for brands to weave retail media into their overall omnichannel strategy(as discussed in Section 3),and to be able to attribute sales in other channels back to activity in retail media.In fact,the research shows th
118、is is already happening(Figure 14).Four out of five respondents(80%)agree they measure the impact of digital retail media on in-store sales performance,with 39%strongly agreeing.The Continuing Omnichannel OpportunitySection 5The Retail Paradigm 33The Retail Paradigm:The Continuing Omnichannel Opport
119、unity Further evidence of this joined-up approach becoming established can be seen from the proportion of respondents who are combining on-and offline data in their loyalty schemes(73%).Figure 14Do you agree or disagree with the following statements relating to your omnichannel retail capabilities a
120、nd strategies?Strongly agree Partially agree Neutral Partially disagree Strongly disagreeWe measure the impact of in-store digital media on in-store sales performanceWe are developing loyalty campaigns based on both in-store and online retail dataWe geo-target prospective buyers on their cell phones
121、 while they are in-store or close to a storeWe geo-target prospective buyers through digital out-of-home advertisingWe measure the impact of digital retail media on in-store sales performance39%41%14%5%1%36%42%16%6%35%38%20%6%1%30%42%17%9%2%28%42%21%7%2%34The Retail Paradigm:The Continuing Omnichann
122、el Opportunity Closing the gap between customers perception of value and customer lifetime valueWhile customer acquisition is important,at a time of economic uncertainty retention is arguably even more so.The first Retail Paradigm report found that four out of five shoppers(81%)are more cost-conscio
123、us with their shopping than they were before the pandemic,and that peoples principal considerations when choosing a shopping site or app for the first time are the ability to save money(19%)and free shipping(14%),above trust in the brand(11%).The companion report also found these were the key driver
124、s of loyalty to a retail site,even though saving money arguably doesnt constitute loyalty at all.Reward programs were cited as the main driver of loyalty by just 7%of shoppers.However,when asked what prompted a repeat purchase,over a third(37%)said rewards/loyalty points or discounts.This suggests t
125、hat loyalty programs go some way to alleviating consumers price concerns and validates the decision of almost three-quarters of marketers(73%)who said they were developing loyalty campaigns based on both in-store and online retail data.“The consumer shift towards convenience and flexibility(as outli
126、ned in The Retail Paradigm Part 1)is being met with speed and investment from across the ecosystem.Everything is or will be shoppable and traditional categories will continue to expand outside of traditional channels(i.e.,.com)and products(i.e.,NFTs)to reach consumers wherever they are.That is why a
127、n omnichannel approach is so essential to success today.”Kerry Curran,Executive Director,Performance Strategy&Growth,U.S.,GroupM Nexus35The Retail ParadigmKey Takeaways Advertisers believe pandemic-inspired behavioral changes are here to stay.This reflects the finding of the first Retail Paradigm re
128、port that consumersand particularly younger consumersexpect to exhibit more of the shopping behaviors that made their lives easier during lockdowns.Over a quarter of marketers are increasing both retail and social media spend by more than 10%this year.The majority of brands have created new marketin
129、g budgets and shifted budgets to support ecommerce media investment.However,the full potential of this new ecosystem has yet to be realized.Customer shopping journeys are increasingly more likely to begin and end on retail sites,with almost three-quarters of brands agreeing customer journeys have gr
130、own shorter with the rise of retail media.Yet advertisers are most likely to see retail media as a channel for increasing consideration when they should be thinking full funnel.Brands interested in strengthening consumer understanding and enabling better sales attribution now have access to even mor
131、e insights via the huge amounts of data collected by retail media networks and platforms.However,the increase of shoppable consumer touchpoints has also created more data fragmentation,requiring a more advanced,omnichannel measurement framework.Section 636 Advertisers must rethink the role of search
132、 in this new customer journey beyond just the search engine.Search now includes social,retail,and ecommerce platforms,and anywhere there is a search box.The holy grail remains tying online and offline activity to sales,and back again.Today,thats increasingly possible on a single retail media network
133、 or platform.The next step is to see across channels,networks,and platforms to understand how each influences the other.Now is the time for proactive conversations about retail strategy between brands and their agency partners.Retail media needs a seat at the table in full-funnel planning,and retail
134、 insight and strategies must be integrated into a comprehensive marketing strategy.This is a complicated,evolving paradigm.There is no one-size-fits all for a brand.To ensure long-term success,marketers must take the time now to understand the new ecosystem,establish swim lanes,build and test strate
135、gies,and identify what drives loyalty.The Retail ParadigmKey Takeaways(continued)MethodologyThis research is based on a survey of 333 U.S.marketers working for brands and agencies.Survey respondents represent companies or clients both selling physical products and investing in retail media advertisi
136、ng,with at least$50m in annual company revenues,and$2m in annual marketing budget for digital media.The survey was conducted in April and May 2022.In some charts we have compared this years findings with the results from a similar survey of brands carried out for the 2021 Catalyst/Xaxis Closing the
137、Gap Adopting Omnichannel Strategies for Stronger Brand-Consumer Connections report.The report is a follow-up to the The Retail Paradigm:The Evolution of Consumer Shopping report,based on a nationally-representative survey of 2,000 U.S.consumers carried out in March 2022.More information about the methodology for these reports is available on request from Catalyst and Xaxis.38