How have online shopping habits changed since the start of the Covid-19 pandemic? And what should marketers expect from hot retail media trends such as social commerce and virtual reality?
Trends around online shopping were top of mind for 170 e-commerce leaders that gathered in New York on March 24 as part of ShopAble, the day-long conference organized by Skai with sponsors including Amazon Ads and Criteo.
ShopAble 2022 focused on what Skai considers “digital’s hottest ad channel”: retail media.
Retail Media Beyond Amazon
Amazon certainly dominates retail media spend, with brands spending more than $31 billion—believed to be 75% of all retail media dollars—to advertise on the platform in 2021.
However, the rest of retail “is not sleeping,” said Nich Weinheimer, General Manager of Strategy at Skai, in his welcome address.
More than a dozen other retail media networks have launched in recent years, Weinheimer said, and cited a prediction from the consulting firm McKinsey that retail media spend outside of Amazon will likely double or triple in the coming years.
In a pre-conference survey, brand leaders told Skai that they predicted their ad budgets would increase on Walmart.com, Target.com, and Instacart in the upcoming year. Even so, Weinheimer said, e-commerce leaders continue to struggle to understand and measure return on investment in a way that is meaningful to their organizations.
Because many retail platforms lack the detailed metrics offered by Amazon, Elizabeth Marsten, Senior Director of Strategic Marketplace Services at performance marketing firm Tinuiti, said she expects brands to continue to keep budgets “fluid” between retailers in the years ahead, to keep options open between platforms.
Brands will likely not move advertising away from Amazon, she said, but marketers may diversify their paid search and social spends among a wider array of retail platforms.
Shopper-Centric Approach to Marketing
Throughout the conference sessions, speakers returned to the idea that shopping is transforming. The Covid-19 pandemic accelerated online grocery shopping, and marketers have been surprised at the acceleration of social commerce, expected to become a $1.2 trillion industry by 2025.
While industry attention focuses on the growth of “omnichannel,” Skai’s VP of Client Success Jim Wasenius urged brand leaders to think of omnichannel as customer-first rather than channel-first.
“The shopper should be at the center of the experience,” Wasenius said. “We’re trying to create a unique path for consumers so that they have a consistent experience.” That holds true whether the shopper is online, in a physical store, streaming media, or shopping on a site such as Amazon.
Amazon may have changed the focus of online shopping from price comparisons to convenience, Wasenius said, but he believes that the future of shopping is for marketers to create “experiences.”
It might still be clunky to shop on a newer platform such as TikTok or use virtual reality tools in the home improvement and fashion spaces, Wasenius said, but it is up to marketers to keep their customers at the forefront of innovation.
Wasenius lead a discussion on omnichannel and innovation with Rory Foster, Director of Direct-to-Consumer Innovation at Procter & Gamble, and Katia Colston, Senior Director of E-Commerce Sales at Central Garden & Pet.
“Omnichannel is very close to our heart,” Foster said of the P&G approach to marketing. “We want to be where the consumer wants to shop for our goods.”
Colston said that Central Garden & Pet is coming up with ways to innovate for a new generation undertaking gardening and home improvement projects.
Innovating for consumers means keeping up with trends such as social commerce. But it doesn’t always mean doing everything in-house; Colston noted that it is important to find innovative technology partners that can help connect products with customers.
Both Colston and Foster still see a role for traditional in-store shopping. Colston treasures shopping with her teenage daughter as it allows them to share an experience in a way that online shopping does not. Foster echoed that sentiment, saying that categories where “touching, feeling, and seeing” remain important are still best served by an in-store experience.
While ShopAble speakers acknowledged that the Covid-19 pandemic has posed both a huge challenge and opportunity to brand marketers, there is still a feeling of optimism around retail media and a curiosity about how trends such as virtual reality and social shopping will continue to change how we all shop in years to come.