Unlocking Retail Media 3.0: Measurement and Innovation

[00:00:19] Hello and welcome to Season 4, Episode 5 of The Retail Razor Show.

[00:00:25] I'm your host, Ricardo Belmar.

[00:00:26] And I'm your co-host, Casey Golden.

[00:00:28] Welcome to Retail's favorite podcast where we cut through the clutter to give you sharp insights

[00:00:34] on the retail industry and commerce technology.

[00:00:37] It's a show for e-commerce specialists, store operations leaders,

[00:00:41] customer experience officers, and everyone else in retail and retail tech alike.

[00:00:46] Ricardo Belmar And with this episode,

[00:00:48] we'll be adding media managers and ad buyers to that list, hint, hint.

[00:00:51] Casey Golden Well, that's one way to give it away.

[00:00:53] Ricardo Belmar I couldn't help it.

[00:00:54] Because of course today we're hitting on one of my favorite retail topics,

[00:00:58] retail media.

[00:00:59] Casey Golden And I'm excited that we don't have just one,

[00:01:02] but two incredible guests today that will help us focus in on what's become the big mystery

[00:01:08] and biggest hope for retail media.

[00:01:10] Certainly by brands buying all those ads.

[00:01:13] And of course, I'm talking about one of my favorite topics, measurement.

[00:01:18] Ricardo Belmar That is so true.

[00:01:20] It's the little things like closed loop attribution, tracking in-store consumer behavior,

[00:01:24] and mapping back to those crater-led campaigns that every retailer and brand want to activate.

[00:01:29] Casey Golden I'm also looking forward to talking about other

[00:01:31] metrics that advertisers need to make these RMN investments meaningful, especially in store

[00:01:38] where you need new technology to help you track results.

[00:01:41] Ricardo Belmar Yeah, we'll see how we've come a long

[00:01:43] way from those early basic digital signage days that were not too long ago.

[00:01:48] You know, we're talking about technologies around spatial computing, AI, and so many

[00:01:52] other modern tech that we're going to hear about.

[00:01:54] Talk about cutting through the clutter today, right?

[00:01:56] Casey Golden 100%.

[00:01:57] So let's not keep everyone waiting in suspense.

[00:02:01] Today we're talking to Andrew Lipsman, independent analyst and consultant,

[00:02:06] founder of Consultancy Media Ads and Commerce, otherwise known as

[00:02:11] retail's foremost expert on all things retail media.

[00:02:15] Plus James Bauer, CEO and founder of Venvy.

[00:02:19] Venvy is delivering cutting-edge spatial AI for audience enrichment and audience measurement.

[00:02:26] Yes, this time we not only have the benefit of the analysis viewpoint,

[00:02:33] but we've got a retail tech founder who's actually solving for the questions we're asking

[00:02:39] about.

[00:02:39] Andrew Lipsman It's like we have a two-for-one special today.

[00:02:41] Casey Golden I love two-fers.

[00:02:45] Let's just get to the conversation.

[00:02:47] Andrew Lipsman Okay, let's do it.

[00:02:56] James Bauer I can't express just how much I have been

[00:02:58] looking forward to this session today.

[00:03:00] Retail media is evolving in so many ways, expanding in so many areas.

[00:03:04] This is a conversation we knew had to happen sooner rather than later on the show.

[00:03:10] So let's welcome our two guests today, Andrew Lipsman,

[00:03:13] our favorite expert on retail media and James Bauer, CEO and founder of Venvy.

[00:03:20] Welcome, Andrew and James.

[00:03:22] Andrew Lipsman Great to be here.

[00:03:22] Thanks for having us.

[00:03:24] Thank you so much for having us on the show.

[00:03:26] It's really exciting.

[00:03:27] Casey Golden It's really exciting to have you both here

[00:03:28] with us today.

[00:03:29] So let's level set a bit first and talk about where we are today in retail media.

[00:03:35] We've been watching the past, what, 18 to 24 months is the whole explosion

[00:03:39] and creation of so many retail media networks.

[00:03:42] Andrew, you've been on the show multiple times before and we've talked about that.

[00:03:46] Lately, we've seen things like expanding, obviously from online to in-store,

[00:03:50] we'll talk about that, even to outside networks that are getting tied in,

[00:03:54] things like connected TV streaming.

[00:03:56] If we think of today as retail media 2.0 maybe, where do we stand?

[00:04:01] How would we characterize it?

[00:04:03] Andrew, I know you've called this era digital advertising's third big wave.

[00:04:07] So let's start with your perspective on this.

[00:04:10] Andrew Lipsman Yeah, well, one way to just frame

[00:04:12] retail media and its evolution is kind of eras and they're overlapping eras,

[00:04:17] but I've called them retail media 1.0, 2.0 and 3.0.

[00:04:20] 1.0 is most of what we've lived up to this point in time.

[00:04:24] It was online ads, think of your standard Amazon sponsored product ad,

[00:04:29] driving an online sale, nice tight closed loop conversion.

[00:04:33] Things were easy.

[00:04:35] Certainly we're seeing the progression of that to a lot of other retailers online today.

[00:04:40] But now we're quickly progressing into retail media 2.0,

[00:04:45] which is characterized by the ads moving up the funnel and into the store.

[00:04:50] What I mean by that is it's offsite ads, including display and video,

[00:04:55] social ads, streaming TV and in-store ads.

[00:04:59] And now we're also getting better at attribution and being able to attribute sales,

[00:05:02] not just to the online conversion but also in-store conversions.

[00:05:06] And then the last piece of that, and I know we'll unpack this a bit more,

[00:05:09] 3.0 gets to sort of the highest level of media in my opinion,

[00:05:13] experiential media and product samples.

[00:05:15] And we begin to start thinking about attribution, not just online and in-store but over time.

[00:05:21] So going into in-store activations, as we move towards retail media 3.0,

[00:05:29] how important do you think experiential media

[00:05:32] and in-store activations will be for brand engagement?

[00:05:35] I don't think it's essential, but I do think it's important.

[00:05:39] When I think of realizing the full potential of retail media,

[00:05:43] it is the ability to be full funnel in reaching consumers online,

[00:05:48] offline, across all these different touch points.

[00:05:50] And in an ideal world, you can actually lead them to consume the product,

[00:05:56] experience the product by virtue of a product sample.

[00:05:58] That works best in consumer packaged goods and beauty.

[00:06:01] It doesn't necessarily extend to a lot of other categories,

[00:06:04] but other categories do have different types of experiences

[00:06:07] that you may be able to have in a physical store.

[00:06:10] But to me, that's the best form of media that you can have.

[00:06:13] To actually experience the product.

[00:06:15] And if it's a first time use of that product,

[00:06:18] it can actually convert somebody from being a non-consumer to a consumer.

[00:06:23] And if you get them purchasing that with a level of frequency,

[00:06:27] there is that value that exists over time.

[00:06:30] So that really is where the return on ad spend

[00:06:33] or return on marketing spend can really stack up

[00:06:35] and what I think a lot of brands should be aspiring to.

[00:06:38] And James, that's kind of why you got into business, isn't it?

[00:06:43] Yeah, I was going to say just from the things

[00:06:45] that I'm hearing from retailers and brands,

[00:06:48] it seems like the experiential element

[00:06:50] is really catered towards certain strategies.

[00:06:53] So it's not something that you need to get every marketing campaign with.

[00:06:58] But when you're looking at specific strategies

[00:06:59] like product discovery or new product rollouts,

[00:07:02] there's no better thing than having that product tangibly in your hands.

[00:07:06] So I'm with Andrew on that one.

[00:07:08] Are there any particular metrics you're focusing on

[00:07:11] to gauge the effectiveness of these integrated campaigns?

[00:07:14] I mean, everybody's wanted to be really measuring physical experiences

[00:07:19] like we do e-commerce.

[00:07:21] But as it relates to the in-store piece, certainly.

[00:07:24] I think that the premier metric is incrementality.

[00:07:27] And incrementality for me being an outsider to the industry coming in

[00:07:31] and working to bring technology to unlock things

[00:07:34] that people have been working on for a long time.

[00:07:35] I've seen many different measures of incrementality,

[00:07:39] and I tried to make it down to the most simplest form for me,

[00:07:42] which was inside the store.

[00:07:44] It's actually quite simple.

[00:07:45] You can take the people who experience, you know, experience.

[00:07:49] And then you can take the people that didn't

[00:07:50] and you can measure how they interacted in space

[00:07:54] if they saw that product, if they converted that product.

[00:07:58] Ultimately, this will have to be a little added little context

[00:08:00] when we talk about what we do and how it works inside the store.

[00:08:03] But as far as measurement goes, you can really take the group of control,

[00:08:08] which is not experiencing

[00:08:09] because the measurement is now capable of doing a one-to-one level thing

[00:08:14] and take the group that did experience it and measure the delta.

[00:08:17] That's how I've come to understand incrementality,

[00:08:19] although I know it may not match everybody else's view of it.

[00:08:24] We love incremental revenue.

[00:08:28] Everyone's got a different version of incrementality,

[00:08:31] but test versus control is pretty standard.

[00:08:33] And, you know, when I was talking about RetailMedia 1.0,

[00:08:37] it's retail media's value is predicated on closed loop measurement.

[00:08:41] And so that's, I think, a big part of what James and Venve are doing

[00:08:45] is bringing closed loop measurement into the physical store environment,

[00:08:48] something that's never really been executed on in a compelling way to date.

[00:08:53] So that's a big driver

[00:08:54] and obviously being able to do incrementality with those measurements as key.

[00:08:58] The quickest way to get brands to invest more in media

[00:09:01] is to prove sales effectiveness.

[00:09:04] But that's only part of the equation.

[00:09:06] And I'm a big believer that there's also this branding value

[00:09:09] that we can very easily look past and ignore.

[00:09:13] And I think that we need to account for that as well.

[00:09:15] So I kind of go back to the future here

[00:09:18] and I think about traditional media measurement,

[00:09:20] which is really about reach and frequency,

[00:09:24] GRPs, the things that we historically measured in TV,

[00:09:27] impressions, how many people do you reach,

[00:09:29] how many times and kind of understanding that campaign delivery,

[00:09:33] because everyone who you reach in a store might not convert today.

[00:09:38] You will see that performance,

[00:09:39] but some of that value is going to manifest over time,

[00:09:44] over additional trips and over trips in different stores.

[00:09:47] Yeah, I think that's one of the things that there's always been

[00:09:49] a desire to better track measure and therefore monetize that benefit,

[00:09:54] because there's so much traffic, particularly for the larger retailers,

[00:09:58] but so much traffic or as measured as foot traffic in and out of the store,

[00:10:02] even compared to eyes that you have coming to your e-commerce site, right?

[00:10:06] Whereas we know what the tools are there.

[00:10:08] I think everybody has an understanding of how you're going to use that

[00:10:12] in that medium, but how do you translate that?

[00:10:15] I'd like to kind of explore a little bit what have been the missing pieces

[00:10:18] technology wise in the store to help with that.

[00:10:21] And I say that just because I remember in the early days of digital signage in stores

[00:10:26] where the promise was always being given as,

[00:10:30] oh, well you're going to be able to create an ad network and give it

[00:10:32] all of your suppliers and all your brands that are in the store

[00:10:35] and get ad space on those screens.

[00:10:37] But there were never any tools to measure any of that.

[00:10:40] So you were kind of, what were you offering?

[00:10:42] Really all anybody was offering at the time was this blind faith that

[00:10:45] because you put something up a screen,

[00:10:48] all the foot traffic that came to the store was going to see it

[00:10:50] and would somehow be influenced by it.

[00:10:52] And you hoped that you could track that at the point of sale.

[00:10:55] But now I think we have better technology for this, right?

[00:10:58] Yeah. And I can do a little shout out here to Mike Hyatt.

[00:11:02] He's one of our advisory boards.

[00:11:04] He was doing that work at Walmart and at Sam's back in the days when it was kind of

[00:11:08] here's the screen wall, pay that gets here.

[00:11:11] But his vision ultimately, and the reason why he came to work with us

[00:11:15] was that he wanted it all to be connected.

[00:11:17] Screen with the shopping experience with the outcomes,

[00:11:21] ultimately with the loyalty card and then matching into the digital world.

[00:11:24] He had this view of an omnichannel flow that went back and forth.

[00:11:28] So when I spoke about what we were doing, he said,

[00:11:31] this is kind of the piece that was missing for me to accomplish this

[00:11:34] at Walmart and at Sam's.

[00:11:36] So as far as the technology goes,

[00:11:39] we really are at an exciting point in time where you're seeing AI,

[00:11:43] which was like a lot of hype and a lot of energy and a lot of potential

[00:11:47] start to get paired down into what is like functional value propositions.

[00:11:52] You can do almost anything with AI, which is like the coolest thing,

[00:11:55] but also the worst thing about it.

[00:11:57] And so if you don't focus and tear down into something that you know can apply value,

[00:12:02] then you're going to end up chasing 10 rabbits catching zero.

[00:12:06] So for our technology, what we're looking to do is, as Andrew said,

[00:12:10] close the loop on the attribution gap in store as it relates to the video.

[00:12:15] The way we can get that done is in a store change free mix.

[00:12:21] So one of the things that every startup founder does is evaluate the seal.

[00:12:27] They see everything that everybody's done in base to date.

[00:12:31] There's been some marvelous companies and some concepts that really changed the game

[00:12:36] or paved a path for true innovation.

[00:12:39] But one of the limiting factors is that the store is such a curate experience.

[00:12:43] There are people that are very intentional with the way that that space is.

[00:12:47] And when you require complete disruption of that space,

[00:12:51] whether it be through adding sensors, cutting holes, hanging this, hanging that,

[00:12:55] it really breaks that up.

[00:12:56] And there's a barrier to that, not to mention the cost elements.

[00:12:59] So I said when we started this, I said we have to create a thesis

[00:13:03] is we don't change the store.

[00:13:04] And that's a big technological unlock in that we can tape the store as it is

[00:13:10] and map anonymous IDs.

[00:13:13] So when somebody moves into this space to get an anonymous ID,

[00:13:16] as they move through this space, they maintain that anonymous ID moving from camera to camera

[00:13:22] to camera to spaces that don't have camera coverage to the next camera ultimately to the

[00:13:27] checkout all done with what's already in this.

[00:13:31] And that unlocks speed and costs and it unlocks the ability to close the loop

[00:13:37] on any store.

[00:13:38] So when you say anonymous ID five walks in,

[00:13:41] they impressed on screen five that was playing the pizza ad and then anonymous ID five went

[00:13:49] to the pizza after going to the pizza, they checked out and it was in their basket.

[00:13:54] That is the closed loop full funnel of attribution.

[00:13:58] And as I mentioned, I'm not from the industry.

[00:14:01] So my feather was that I took things that looked really familiar.

[00:14:06] I tried and take everything that Andrew told me

[00:14:09] and everything that was standard in other platforms and just apply it to the store.

[00:14:15] There's nothing there's nothing customer prior to her.

[00:14:17] I just wanted to failure.

[00:14:19] Well, I mean, it wasn't that long ago that I had security guards,

[00:14:23] the clicker and counting how many people walked in by every day and just like,

[00:14:26] like click, click, click, click.

[00:14:32] Over the gulf race.

[00:14:34] Yeah, I mean, we've moved pretty fast, I'd say,

[00:14:37] I'd like to say that wasn't that long ago and I'm not that old, but I have seen,

[00:14:41] you know, I haven't seen anybody with a clicker for years.

[00:14:44] How should retailers and brands close the loop on in-store sales with creator led content

[00:14:52] and other digital activations?

[00:14:54] Yeah, I mean, the way that I like to think about it is you have all of these physical

[00:14:58] touch points in the store.

[00:15:00] We're focusing a lot of our conversation around in-store digital media because

[00:15:04] I think we all believe that this is where the future is going and it's,

[00:15:08] I've called it the next major media channel and it's really exciting.

[00:15:11] But you've already got a $25 billion or so industry of shopper marketing.

[00:15:17] So all of these physical installations that are analog today still have value.

[00:15:21] So the ability to bring measurability to anything in the analog physical world is huge

[00:15:26] and you can close the loop on all of that or just measure the activity and the impressions.

[00:15:30] Creator content to me is just an extension of the media.

[00:15:35] I happen to think that it is a more effective and sort of higher form of media.

[00:15:40] Creators are kind of breaking through to audiences in ways that standard media maybe

[00:15:45] doesn't as well anymore.

[00:15:47] So my hypothesis would be that creator content is going to be threaded throughout

[00:15:51] more store experiences.

[00:15:52] It will be effective, but we'll need measurement to prove it.

[00:15:56] And you know, we're not there yet, but I think that's kind of where things are headed.

[00:15:59] So are there any other innovative approaches that I'm thinking of in terms of what retailers

[00:16:05] can do or what the brands who want to leverage retail media networks should think about that

[00:16:10] help them kind of connect the dots, right?

[00:16:12] As you're talking about between both the in-store activations but what other,

[00:16:16] the other digital efforts that they may have as part of that campaign.

[00:16:19] I would call it maybe the vision here from the brand's perspective is they want

[00:16:22] everything connected, right?

[00:16:24] If they can create a campaign that drives people to physical spaces, starting in a

[00:16:30] digital experience, they know that flow is working.

[00:16:32] They know that to your point that the measurement is there to prove that it didn't.

[00:16:36] Are there any, maybe the question is what are we doing right now to get there,

[00:16:40] to help us get there?

[00:16:41] I think that may be a little bit of a parallel here, but I think that when you say

[00:16:45] the brand wants everything to be connected, I think that everything for the retailer's

[00:16:49] perspective has to be focused on the transactional nature and the value of

[00:16:55] the loyalty card because when a shopper opts into that loyalty card, they're

[00:17:00] expecting benefits back to them.

[00:17:02] And when you look at, I read the book on Walmart and the way they brought in

[00:17:07] e-commerce, it was almost two houses and they were in perfect competition.

[00:17:12] And what we're seeing now is quite a far cry from that approach.

[00:17:15] But at the center of those two houses, to bring them together, you need the loyalty

[00:17:20] card because that's sort of the piece that connects fluidly between two mediums.

[00:17:25] And so to that end, the approach is to make that happen.

[00:17:27] You're already seeing it happen at the register and you're seeing it happen

[00:17:31] digitally.

[00:17:32] You need to reverse it backward from the register to the shopper journey inside

[00:17:36] the store to capture that last piece.

[00:17:38] And there's a number of ways you can get that done and there's sort of

[00:17:42] meal data sets that can almost supplement that.

[00:17:45] And if you look at an example would be like put a single camera on a single

[00:17:49] screen, you can count the password by in front of that screen.

[00:17:53] That's a piece of information that can see that story at the transaction

[00:17:58] level, like the loyalty level.

[00:18:00] But the way I see it, we're in an awesome opportunity here to use retail

[00:18:06] media to build a platform for innovation for a lot of time.

[00:18:09] Retail media has created a different level of revenue and margin profit for

[00:18:16] these retailers in that they can put the innovate in that space.

[00:18:21] And so when I say looking to digitize the physical store, we can do a lot.

[00:18:26] And that foundation is built on digitizing the entire space, collecting

[00:18:30] the data on the entire journey, connecting them to the register,

[00:18:34] connecting that to the internet.

[00:18:35] That's how it all can come together.

[00:18:37] And just to build on James point about the loyalty card data, right?

[00:18:41] Every great retail media network has that first party data foundation.

[00:18:47] So that loyalty card is essential.

[00:18:49] And if you think again about this idea of full funnel marketing

[00:18:53] for retail media, you ideally are trying to reach consumers across as

[00:18:58] many touch points as possible to persuade them, create awareness about

[00:19:02] the brand, create affinity.

[00:19:04] But eventually once you've got them in the store, move them down to the

[00:19:08] bottom of the funnel and get them to convert.

[00:19:10] But you don't just want that one time purchase, right?

[00:19:12] You want that purchase over time.

[00:19:15] So what are the ways now that they've converted that you can connect to

[00:19:18] them after the fact as well and reinforce the value of the brand.

[00:19:22] So if everything is connecting back to that loyalty card, you can actually do

[00:19:26] this full funnel on the front end and on the back end.

[00:19:29] And I think that becomes a really powerful mechanism to create that

[00:19:34] repeat purchase.

[00:19:36] So just to set a little bit of a baseline when we're talking about

[00:19:39] conversion, because that is 100% the key here is being able to track

[00:19:44] that conversion.

[00:19:45] What are some general stats from my world?

[00:19:50] You're lucky if your e-commerce store is doing 2.3% conversion rate

[00:19:55] online, you can dislocate your shoulder to pat yourself on the back for that.

[00:19:59] But in store, we're very used to 30-35% conversion rate goals being hit every

[00:20:06] single day in a physical store.

[00:20:08] So there's a huge contrast between e-com conversion and digital or

[00:20:13] in physical conversion.

[00:20:15] But the intention to buy is much higher for the physical because you

[00:20:20] actually had to go and walk through the door.

[00:20:22] And I would think it's very easy to say that maybe so many ad dollars

[00:20:27] have been spent trying to get that 2.3% to 10 or to 15, rather than trying

[00:20:34] to move that 30 to 35 or to 40.

[00:20:38] But this kind of changes that.

[00:20:40] And I know when I was at a brand, I didn't have a lot of insights

[00:20:45] to other people's KPIs.

[00:20:47] It was a lot of dinners.

[00:20:48] We've gone a couple years without a lot of dinners.

[00:20:52] What are some of these KPIs and see these baseline metrics from

[00:20:56] that we're looking at to start saying, do I need this?

[00:21:02] Is this worth me chasing with this new type of tracking?

[00:21:06] How much lift are these brands should be looking at as an

[00:21:11] opportunity for incremental?

[00:21:12] Are we talking, are we looking at, are people getting double digit increases?

[00:21:17] Is this where 2% is a ton of incremental revenue?

[00:21:23] Just kind of curious.

[00:21:24] You know, where's the baseline on in general?

[00:21:29] Because I come from a very specific silo.

[00:21:34] I would start by saying, you know, if you're seeing 2.3% online at 35% in store

[00:21:41] and the investment still goes online, I think that's a signal of there's no trust there.

[00:21:47] People see that number and they say, well, I can't validate that.

[00:21:51] And I see that number.

[00:21:52] I don't know what was the root cause of that.

[00:21:55] And therefore they don't invest there.

[00:21:56] And I think that that's a symptom of not having the proper fidelity

[00:22:00] measure is what we're trying to bring to this so that there is trust.

[00:22:04] This is something that I've talked with retailers, brands and media

[00:22:08] platform with screen providers about ones that if you put $10 in to the internet,

[00:22:13] you're going to know exactly what you get out of it.

[00:22:16] Put $10 into the store, you're not going to know.

[00:22:19] And even if it can be painted as a picture, if there's no trust there,

[00:22:24] then the investment is not going to be there.

[00:22:26] Yeah.

[00:22:26] The, I mean, e-commerce is so heavily optimized, right?

[00:22:31] Everything is about metrics and when we're in the conversion funnel,

[00:22:34] that's 15% of retail today.

[00:22:36] What about the other 85%?

[00:22:39] Yeah.

[00:22:39] There's a lot more leverage.

[00:22:40] We haven't had the analytics to support that.

[00:22:44] The moment that we do, and that's what James is helping do,

[00:22:48] is I think becomes transformative.

[00:22:51] One of the things I think about a lot in this space is three of the top 10

[00:22:56] biggest companies in the world by market cap, Facebook, Google and Amazon,

[00:23:01] at this point are primarily digital advertising or e-commerce companies.

[00:23:06] Their value is predicated on that 15%.

[00:23:09] How much value is there out there when you have companies that can provide

[00:23:13] that sort of assurance and certainty around measurement for the other 85%?

[00:23:18] It's enormous.

[00:23:19] Like you said, Casey, if I go from 2.8 to 3.7% in e-commerce, that's huge, right?

[00:23:26] That's like a 25% increase in conversion rate.

[00:23:30] That's going from 35 to 35.7% in store and it's the same amount.

[00:23:36] That seems pretty easy off of that baseline.

[00:23:38] I think there's a ton of potential.

[00:23:41] You also asked about what is the impact that we're seeing.

[00:23:44] I've worked with some other folks in the industry,

[00:23:46] done some measurement sales list studies on in-store media.

[00:23:50] One of them with Grocery TV where we looked at a meta analysis

[00:23:53] of a bunch of campaigns that they've run.

[00:23:56] These campaigns are primarily near checkout,

[00:23:58] so this isn't necessarily universal to every digital screen in the store.

[00:24:03] But the campaigns had an average of a 14% sales lift for the brands being advertised.

[00:24:08] One of the things that was really interesting,

[00:24:10] they varied from about a 6% lift to a 33% lift.

[00:24:15] More than half of them were between 10% and 14%.

[00:24:19] I actually really like that consistency.

[00:24:21] Yeah, you're always going to have some outliers on the top and bottom.

[00:24:24] It's always going to depend on things like creative and other stuff.

[00:24:27] But if you see that consistency and reliability,

[00:24:30] if you are advertising in-store, it will drive incremental sales.

[00:24:34] That's a great thing.

[00:24:35] Not just for the brand, by the way,

[00:24:37] it also can be a great thing for the retailer

[00:24:39] because it's about potentially increasing basket size

[00:24:43] and driving that purchase in the store that wouldn't have happened otherwise.

[00:24:47] That's great. Thank you for sharing that.

[00:24:50] It seems like a pretty, in my mind, easy case to make,

[00:24:54] to invest more in the in-store networks that way from a brand advertiser's perspective.

[00:25:00] I see a lot of things written in media about where brands are investing their ad dollars.

[00:25:07] We're seeing a shift.

[00:25:08] I think there's a good document, good stats out there that show

[00:25:11] how much is shifting to these retail media networks.

[00:25:14] But if you just take what you just described as a motivator

[00:25:17] for why there should be more investment,

[00:25:19] what do you think is holding anyone back?

[00:25:22] What's holding brands back from doing that today?

[00:25:24] Because we see lots of forecasts at what point will retail media overtake

[00:25:28] pick your category of advertising in terms of spend.

[00:25:32] But why isn't it happening faster, for example?

[00:25:35] The easy answer is lack of measurement and it's all forms of measurement.

[00:25:38] The secondary answer I think is organizations are siloed and they literally don't have people

[00:25:45] at a lot of companies, brands and retailers who are focused on in-store retail media.

[00:25:50] It's this jump ball because it seems like it should be the domain of the merchandising teams,

[00:25:56] what budgets from a marketing standpoint does it come out of?

[00:25:58] Is it shopper marketing or national media?

[00:26:00] I'm a big believer in Chicana national media budgets.

[00:26:03] So it's just that.

[00:26:05] It is that you have these long-standing companies,

[00:26:10] traditional organizations that are not built for it.

[00:26:13] So they do need to get more integrated in and have more organizational focus around

[00:26:18] the opportunity if they're going to get the most out of it.

[00:26:20] And they both have a lot to gain by the way.

[00:26:22] Retailers, this is the path for a lot of retailers

[00:26:25] to be able to get incremental high margin revenue.

[00:26:29] And this is the chance for a lot of brands to market

[00:26:32] in what I believe is one of the best and most impactful ways that they can market.

[00:26:37] High quality creative experiences, close to the point of purchase.

[00:26:41] Isn't that the holy grail?

[00:26:42] Isn't that what we should be trying to do?

[00:26:44] And one of the things that I've been talking with one of our customers about

[00:26:48] and it was their idea not mine is that they want to unify the sale of

[00:26:56] real estate inside the store against measurement.

[00:26:59] So they have screens, they want to sell their screens against measurement.

[00:27:03] But also they have their end cabs.

[00:27:04] They have traditional product placement on the shelf.

[00:27:07] When you think about it, the way those things operate with media being heavy on

[00:27:12] measurement and traditional merchandising and end cabs, heavy on the transactional

[00:27:17] nature of retail and brand that's been there forever, they don't look quite alike.

[00:27:22] And to put them right next to each other makes the contrast stand out even more.

[00:27:27] So when they're saying, hey, you're going to digitize the whole space,

[00:27:31] which is what we're aiming to do in all of the customer journeys.

[00:27:34] And we sell our end cabs against measurement just like we intend to sell our screens.

[00:27:39] So yes, and that's kind of the goal is when you digitize the space,

[00:27:44] create transparency fidelity, a lot of space can be unlocked.

[00:27:48] It's thought of as merchandising today, but it's also media.

[00:27:51] Right.

[00:27:51] This is the intersection of media and merchandising.

[00:27:53] That's why one of the things I say to my guidance on how to think about

[00:27:58] in-store retail media is think about it in terms of reach, quality and performance in that order.

[00:28:05] The instinct which I totally get is to go straight to performance.

[00:28:08] The performance is going to be there.

[00:28:10] You're going to measure that without a doubt.

[00:28:12] But the reach and the quality, those are the components of media

[00:28:15] that until we start adopting that lens, I don't think we're going to

[00:28:19] realize the full potential of everything I can do.

[00:28:21] Yeah. And when you think about the arriving of retail media, it came in first digitally.

[00:28:29] And so the second mover advantage was to all the map that was already carved down,

[00:28:33] which was a digital map.

[00:28:35] And these retailers now make the shift into the physical store.

[00:28:39] And there's almost there's a bit of hurdles that need to be jumped between the merchant

[00:28:43] and the retail media team inside the store because store is the ultimate operation.

[00:28:49] There are so many moving pieces.

[00:28:51] And we've been able to create an olive branch between these two groups

[00:28:55] by providing the measurement that shows value of the merchandising team and the things that they do

[00:29:02] and pairs in measurement for the retail media.

[00:29:05] So it can almost be a unifying force when you have an asset that helps both.

[00:29:10] Speaking of a lot of moving parts,

[00:29:13] the actual consumers that are entering these stores,

[00:29:16] what role does anonymization play in your approach to tracking that in-store behavior

[00:29:22] and linking it to digital campaigns?

[00:29:25] I think data, the use of data and ethics is definitely in the conversation when it comes to

[00:29:33] any of our ad companies here.

[00:29:35] How do you ensure that you're respecting consumer privacy

[00:29:39] while still being able to deliver on the value to retailers?

[00:29:43] Yeah, I'm glad we get here because this is always the first question.

[00:29:47] And I love answering the question actually, because this company when I started,

[00:29:52] privacy was at the very first step.

[00:29:55] I said we will never leave ground if that's not taken very seriously and very intentionally.

[00:30:01] And the way we got that done it's by first of all,

[00:30:05] no biometrics inside of anything that we do.

[00:30:08] Biometrics are essentially defined by immutable parts of a body that can persist.

[00:30:16] So you can't change your face.

[00:30:18] You create a data set around somebody's face,

[00:30:19] then you can match it when you come in later.

[00:30:21] Same thing with iris, fingerprints and prints.

[00:30:24] Gate has been included in things like beep up.

[00:30:27] But you can't have that in there because then you're identifying somebody on their appearance.

[00:30:31] So we have no biometrics to wear in our data set.

[00:30:34] Additionally, when you look at the data that we collect,

[00:30:39] there's no information about an individual.

[00:30:43] In fact, the way I describe it is you could spend a lifetime with our data set trying to

[00:30:50] find someone in the data to possibly.

[00:30:54] There is no way to take our data by itself and say that was James Bauer in the store.

[00:31:01] There's no way.

[00:31:01] The connection point at the register.

[00:31:05] So when you take our shopper journey that is totally de-identified, totally anonymous

[00:31:10] and connected to the register,

[00:31:13] we do that connection without any identifying information with T-log register.

[00:31:19] And then we give it all back to the retailer.

[00:31:22] So if you look at our entire stack, our database,

[00:31:26] in our pipeline, there is no way to identify people to collect.

[00:31:31] Now when the retailer has it with their loyalty card,

[00:31:34] they can make a loyalty card, a transaction, a journey.

[00:31:36] But these are relationships that are really established.

[00:31:39] So we didn't want to get into that game very intentionally

[00:31:42] and we have done a nice job of completely staying at it.

[00:31:46] And the privacy things, right?

[00:31:47] They usually it's about trying to identify that person in order to target them.

[00:31:52] I fought these battles coming from the measurement world for years.

[00:31:56] When you're trying to provide aggregate measurement, that's the business model.

[00:31:59] So it is really about taking all of the people, anonymized individuals

[00:32:04] that just get reduced to an ID who are exposed

[00:32:07] and then their aggregate transaction data as a result of exposure.

[00:32:11] So that is the information that's needed to understand if it's working

[00:32:15] and it just doesn't require knowing who that person is.

[00:32:19] How do you see the future of in-store attribution evolving,

[00:32:22] especially with just the advancements in technology and data integration?

[00:32:27] What's kind of on your guys's radars right now on where this is going?

[00:32:32] And if there's any new methods that you're currently exploring that excite you?

[00:32:38] As far as the future here, I think that physical store belongs

[00:32:43] firmly at the center of many retail data strategies.

[00:32:48] Like look at assets that a lot of these retail networks have.

[00:32:52] You can take the digital traffic and you can compare it to the in-store traffic

[00:32:56] and it's going to be quite different, quite staggered in favor of in-store.

[00:33:02] So these stores should be at the heart of the strategy.

[00:33:06] And when that's accomplishable is when that space is digitized,

[00:33:11] measured, understood fidelity that the internet is.

[00:33:14] So when you can take those internet strategies and implement them in your store,

[00:33:19] but that's all contingent on having the data that powers the engine of advertising.

[00:33:25] So unless it's if we're like putting retail back, right?

[00:33:29] Like everybody I see a huge opportunity for merchandise planning and product forecasting,

[00:33:36] pricing. We planned our online business.

[00:33:39] We have always been planning our online business based off of

[00:33:42] what was purchased in physical stores with very little data, consumer data.

[00:33:47] And then as all of these ads have provided these consistent 6X, 10X,

[00:33:56] 4X returns ROAS measurements online that were not able to be done non-digitally.

[00:34:03] E-commerce and all of the things that were able to be measured there started dictating more

[00:34:07] of what was going to be made and what was being forecasted for stores.

[00:34:12] And with it still doing physical stores, still doing 85%, it's almost like we're

[00:34:16] validating and putting retail back where it was supposed to be.

[00:34:19] Like if we could just measure what's happening at 85% of the business,

[00:34:24] the whole business would probably be in a better position to know

[00:34:27] what's interesting, what's selling, what you need more of.

[00:34:30] Can I just share one thought that this gave me?

[00:34:34] Today, a conversion rate in store for a specific brand might be the total amount

[00:34:39] of traffic, right? You have some traffic counting technology when you walk in the store

[00:34:43] and strong percent of people convert for a brand, right?

[00:34:46] Probably a pretty low number in the average brand.

[00:34:49] What does it look like if you have an end cap for that brand

[00:34:53] and now you actually know how many people of the ones who came into the store to subset?

[00:34:59] Maybe 20% of people were actually within proximity of that end cap.

[00:35:03] That now provides the denominator for your conversion metric.

[00:35:08] How much more meaningful is that?

[00:35:10] Now you have all these different parts of the store theoretically.

[00:35:13] You have conversion metrics whether that media ultimately helped influence

[00:35:17] and merchandising helped influence the sale.

[00:35:20] That's right, this is to me where the e-commerce-ization, that's a terrible word,

[00:35:28] control the store starts to come into play.

[00:35:31] Never had those metrics.

[00:35:33] There's so much you can theoretically do with that.

[00:35:36] Yeah, and to create a little tale on that, think about what that means for logistics

[00:35:39] as Casey Klein too, which is if you're putting something on an end cap,

[00:35:45] how much more exposure are you going to get?

[00:35:47] Right now it's just a question mark.

[00:35:50] You put some data behind that and you say, well, how many units should we add there?

[00:35:54] Or even end cap is not equally as valuable from store to store to store to store.

[00:35:59] So if you say I'm going to give an extra 20 units to my end cap stores,

[00:36:03] you're going to end up with lots cited.

[00:36:05] There's going to be extra supply in one and under supplied in another.

[00:36:10] This is the fidelity that we bring that I believe will create the foundation

[00:36:15] of a new intelligence layer for those physical stores that,

[00:36:18] you know, I'm going to take a sound bite of which said, because it was awesome.

[00:36:22] It will see many things in the future, beautiful things that we can start in a very

[00:36:27] simple and easy way, which is measurement for retail media and make money off of it

[00:36:33] and let that be the springboard for innovation for a long time.

[00:36:37] Yeah, I mean there's so much potential from everything that we're talking about here.

[00:36:40] It is really all just based on how and when and in what detail you can define

[00:36:45] the measurements and the attribution to really keep track of everything

[00:36:48] because that's like we said before, what everyone

[00:36:50] really wants to show the effectiveness of that.

[00:36:52] I mean, are there who do you think is ahead in this or maybe soon will be ahead?

[00:36:57] Any thoughts as to any particular, if you want to name names or don't want to name names,

[00:37:02] either way that you're more excited about where they're headed in terms of enabling

[00:37:06] all of this in their store activation.

[00:37:08] Like who's going to be the first to win this battle and win brands over?

[00:37:12] I'll still on behalf of James for a moment.

[00:37:14] I'm not sure who he can talk about, but I will say is I like, first up,

[00:37:22] I think the U.S. needs to look to Europe.

[00:37:24] There's a lot more innovation in Europe.

[00:37:26] First up, more attempts to try and measure some of these things,

[00:37:29] although a lot of the technologies have some of the pitfalls that we've mentioned.

[00:37:33] But in terms of the actual retailers themselves, Tesco is as far as a big retailer

[00:37:38] starting to introduce digital signage at the end caps,

[00:37:42] at different parts of the store, doing it in a high quality way.

[00:37:46] So I think I point to them regularly as a retailer that other large retailers

[00:37:51] over here should start to emulate because I think there are a few steps ahead in this process.

[00:37:56] And as far as retailers, I can't point to any of our customers,

[00:38:01] which really kills me because I just want to sing their song

[00:38:04] or believe in what we're doing and believing in the vision of adding fidelity,

[00:38:09] vision and add fidelity into the stores.

[00:38:11] So I will, I promise that that is an inevitability.

[00:38:15] We're going to get into that.

[00:38:16] We're going to have some really cool sites coming out relatively soon.

[00:38:19] It's really those, I guess there's a few different ways you could look at it for

[00:38:23] retailers. You've got first movers, which everybody's kind of already identified as

[00:38:27] people were carving the path. A lot of that being digital.

[00:38:31] You've got the second movers that like see that and repeat it.

[00:38:35] But then you've got this whole group that are saying,

[00:38:38] okay, we may not add the size of the first movers,

[00:38:43] Walmart's how do we stand out?

[00:38:47] Well, if Walmart is focused on their digital and their 3P platform and their logistics now

[00:38:53] we can stand out by focusing on our physical spaces.

[00:38:57] The shoppers that we create a really deep relationship with.

[00:39:00] I'm from Houston and I love HUB.

[00:39:03] And so going there and those stores weekly,

[00:39:07] that's the deep relationships that some retailers are looking to innovate on.

[00:39:12] So I think that there's a group of retailers that have a mentality in saying

[00:39:16] we can leapfrog the status quo and differentiate

[00:39:19] by using our in-store footprint of shoppers that we've created relationships with.

[00:39:25] I think those are all great points.

[00:39:29] And while I'm talking about all of these and where we're headed,

[00:39:31] I mean any last thoughts either you guys have on

[00:39:35] excites you the most about where retail media is going?

[00:39:38] I'll add just sort of my future vision for where all this goes and what

[00:39:42] is exciting as we get closer and closer to realizing this potential.

[00:39:45] In the initial framing of the conversation retail media 1.0, 2.0 and 3.0.

[00:39:50] The rendering that I have of that is really looking at the evolution of retail media across

[00:39:55] two axes.

[00:39:57] The first one is the media or advertising format.

[00:40:00] And that's going from bottom funnel up the funnel.

[00:40:03] And then we have the other dimension is the method of attribution.

[00:40:08] And that starts with online, then online to offline,

[00:40:11] and then online, offline and lifetime value.

[00:40:14] So over time I see the potential through cleanroom technology to start to bring

[00:40:20] all of these pieces together.

[00:40:22] So there will be a clean room at the center.

[00:40:24] You have these disparate media touch points.

[00:40:26] You have these disparate forms of attribution and you'll be able to

[00:40:29] ingest all of it and make sense of a truly full funnel campaign across time

[00:40:36] and be able to understand the outcome metrics of sales

[00:40:39] and be able to optimize against those things.

[00:40:41] And I think that's going to be really exciting.

[00:40:43] And this is what we're talking about today,

[00:40:46] maybe the biggest individual piece of that holistic equation,

[00:40:50] which is that 85% of in-store sales and all the marketing touch points that are happening

[00:40:55] within that context.

[00:40:57] And then obviously to be able to understand that over time as well.

[00:41:00] That's the big missing piece today is what we're finally on the precipice of solving.

[00:41:04] Yeah, and I couldn't try to follow that.

[00:41:08] I think Andrew understands landscape so clearly.

[00:41:12] But one thing that I am excited about is the collaboration.

[00:41:16] I think that when you look at me, I'm not from the industry.

[00:41:20] I'm here bringing hopefully tools to people who have been in the space for a long time

[00:41:25] that are trying to unlock capabilities.

[00:41:26] I met Andrew after he spoke at NRF, I think in 2022, by cold DMing him in LinkedIn.

[00:41:36] And not often do you find people who respond to that and engage here with you all today.

[00:41:44] And a lot of the learnings that have gone into the product came from Andrew.

[00:41:48] But you have to have an industry and a group of people that are fostering progress.

[00:41:55] And when I talk to people, it could be very easy to disregard what we're bringing

[00:42:01] because we're not from this, we haven't been doing this.

[00:42:04] But people are so hungry to move this forward because they see what Andrew just described.

[00:42:09] They're looking to collaborate, to innovate, to share, to swap notes.

[00:42:16] And so I'm super grateful for people like Andrew, people like the two of you

[00:42:20] to have me on this and all the people that have helped me along the way.

[00:42:24] Because it's a symptom of a healthy industry that wants to move forward.

[00:42:29] It's a really exciting time because the technology is getting there,

[00:42:32] the space is ready to move forward.

[00:42:35] And what we're moving towards is incredibly exciting.

[00:42:41] So just it's a fun time to be in it.

[00:42:44] Well, I'm so glad you've been welcomed with open arms.

[00:42:48] All the rumors are lies.

[00:42:50] We're all like the nicest people in the world.

[00:42:52] Exactly.

[00:42:52] But I think it does come down to the fact that these Frankenstacks are so big

[00:43:00] that we all know that no one person will ever solve the evolution of commerce and retail.

[00:43:08] And it takes everybody to kind of come in and start plugging in new software,

[00:43:13] having these conversations to really find where we can make those changes

[00:43:19] that make the biggest impact and the swiftest return for these insane supply chains

[00:43:27] and customer journeys.

[00:43:30] So thank you so much, both of you, for joining us today.

[00:43:33] Thank you for having us.

[00:43:35] Thank you for having us.

[00:43:36] This has been a fantastic discussion.

[00:43:38] And thank you for also reminding everyone and bringing it back to

[00:43:42] whatever aspect of commerce we're talking about.

[00:43:44] It still comes down to people at the end.

[00:43:46] I think that's a great note to end on on the collaboration, James,

[00:43:49] that you brought up because that's so true.

[00:43:51] We find that in so many of the topics that we bring in on the show

[00:43:54] that it really does come down to that human engagement

[00:43:56] and the impact it has on across all the different things

[00:43:59] that are just supported by the technology

[00:44:01] because ultimately it's not about the tech itself,

[00:44:03] it's about how we use it and those things.

[00:44:06] But this certainly could be one of those discussions

[00:44:08] that we would just carry on for hours on end and never stop

[00:44:11] because there's so many different places and paths we could go down

[00:44:14] to really dig into it.

[00:44:16] Thanks again, James, Andrew.

[00:44:17] This has been a fantastic discussion.

[00:44:20] Thank you.

[00:44:21] Yeah, I hope that our listeners found a few gems

[00:44:23] that they can use to polish up some of their strategies

[00:44:27] and really be the cheerleaders inside

[00:44:29] to bring more of these types of strategies

[00:44:32] and convert digital campaigns into their own businesses.

[00:44:36] Awesome.

[00:44:36] Look forward to staying in touch.

[00:44:38] Absolutely.

[00:44:39] Well, Ricardo, I'd say that this show is a wrap.

[00:44:42] Yes, it is.

[00:44:49] If you enjoyed our show, please consider giving us

[00:44:51] a five-star rating and review on Apple Podcasts, Spotify or Good Pods.

[00:44:57] Remember to smash that subscribe button in your favorite podcast player

[00:45:00] and tune in on YouTube so you don't miss a minute.

[00:45:04] A big thank you out to Good Pods listeners

[00:45:06] for helping us continue to stay in the top three spots

[00:45:09] of the indie management and marketing charts.

[00:45:12] I'm your co-host, Casey Golden.

[00:45:14] Please connect with us and share your feedback on Twitter

[00:45:16] at kccgolden, ricardo underscore belmar and at RetailRazor

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[00:45:29] for full episode transcripts and bonus content.

[00:45:32] I'm your host, Ricardo Belmar.

[00:45:34] Thanks for joining us.

[00:45:35] Until next time, keep cutting through the clutter and stay sharp.

[00:45:39] This is The Retail Razor Show.