In the latest installment of our series centered on the evolution of Retail Media, we sat down with Martin Steinorth, Head of Digital & Technology at Havas Germany, for insights on the importance of an omni-channel experience on the customer buying journey.
In your opinion, what has been the catalyst for this explosive growth of retail media?
The growth of retail media has been propelled by the preference for e-commerce among customers and the strong professionalization and data maturity of online retailers. Commerce platforms are continuously expanding into new business areas, such as marketplaces. Retail Media Networks (RMNs) possess the capability to leverage their own buyer data, providing advertisers with an unparalleled opportunity to enhance their ad performance compared to traditional digital ads. By tapping into RMNs, brands can significantly boost their Return on Ad Spend (ROAS) by reaching new audiences right at the point of purchase and capitalizing on the platform’s scalability, all while maintaining full transparency through the closed-loop analytics offered by RMNs. This development proves advantageous for customers as well, as sponsored products seamlessly integrate into search results, creating a personalized experience.
Retailers are becoming media owners. How will this impact brand strategy and media planning?
The ability to advertise products directly on retailer platforms provides brands with the opportunity to integrate their campaigns much closer with the point of purchase. It enables swift performance experiments with various targeting options and creatives. This will compel brands that have adhered to a traditional marketing approach to transition towards more performance-oriented strategies. To fully leverage the benefits offered by retail media, brands will have to evolve their strategies for media planning, create content that resonates within this context, and thoughtfully allocate their budgets to capitalize on the potential that retail media holds.
What opportunities do AI and CX data offer brands in the customer journey?
RMNs leverage AI to analyze customer interactions and purchases, utilizing this data to develop predictive models of future buying behavior. This allows RMNs to introduce new targeting possibilities and optimize ad performance even further. Customers will benefit from receiving more relevant product suggestions that genuinely feel and are personalized, as opposed to traditional product placements. By integrating CX performance indicators into Generative AI, brands can automate creative production processes and generate content and asset variations to publish throughout the customer journey and across different platforms. For example, Henkel, a German multinational company for consumer and industrial goods, uses AI trained on billions of user behavioral data points to assess the effectiveness of ad creatives before they are published – resulting in a greater customer orientation. This, along with other use cases, show that the combination of CX data and artificial intelligence can generate more engaging and personalized customer experiences, providing brands with a significant edge in a competitive market.
What kind of retail experiences do GenZ and GenA value?
Both GenZ and GenA are adept at navigating the digital world and are highly likely to initiate their retail experiences online, whether influenced by social media or driven by specific needs. In addition to brand authenticity and genuineness, providing a seamless shopping experience with quick checkouts, convenient payment options, prompt shipping, and hassle-free returns is especially important to GenZ.
Brand loyalty is diminishing among both groups, particularly among the Alpha generation, which prioritizes aligning the brands they choose to match with their personal values. Although still children, the oldest Alphas are soon transitioning into adulthood, moving away from kids’ brands and habits. A study by Razorfish, “Exploring Generation Alpha”, revealed that 43% have tablets before the age of 6, and 51% learn about brands through YouTube. To attract the attention of Alphas, brands should engage in meaningful dialogue, foster a sense of community, and offer platforms for interactions. For example, delving into gaming platforms like Roblox, which combines gaming with social aspects or leveraging the opinion leadership of content creators.
How can brick and mortar locations evolve so that they remain relevant in a digital world?
In order for brick-and-mortar locations to remain relevant in the age of digital shopping, they must enhance the overall customer journey and seamlessly integrate into the Omni-Channel experience. Today's buyers check for in-store availability before going to a physical store, and once there, they seek a product experience and added value that cannot be replicated through digital means or without the necessary technology. The physical act of holding and experiencing a product still provides a unique sensory experience that is difficult to replicate in a virtual setting.
The recent X Index report “Hyper Experience”, an international annual CX study conducted by Havas, has also revealed that customers are unwilling to compromise between efficiency and pleasure when it comes to brick-and-mortar experiences. Brands that offer easy and convenient access to their products, coupled with an emotional experience – such as through pop-up stores or participation in events – acknowledge the importance of these physical experiences in the purchasing process.