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Despite knowing physical stores are key for discovery, brands favor digital ads because they are easier to activate and measure. The historical lack of rigorous, digital-like measurement for in-store media, not a strategic oversight, has been the primary barrier to investment in the most powerful discovery channel.
Leaders incorrectly dismiss live shopping's potential by comparing its initial sales to massive channels like Walmart. This mirrors early skepticism towards e-commerce. The strategy is not to match existing channels today, but to invest in what will become a dominant channel tomorrow.
When viewed through a holistic lens that includes all in-store sales, digital screens and audio frequently show a higher return than online ads. This is because the vast majority of retail revenue still occurs in the physical store, so by ratio, investments targeting that environment naturally deliver superior performance on a dollar-for-dollar basis.
While inconsistent measurement across retail media networks is a problem, brands shouldn't wait for an industry standard. Instead, they should define their own measurement methodology and bring it to RMN partners. This allows brands to leverage proprietary consumer insights for a competitive advantage, rather than leveling the playing field with a universal standard.
The expectation of one-to-one attribution, conditioned by digital metrics like ROAS, is ill-suited for the complex, "messy" physical store environment. This approach oversimplifies shopper behavior and ignores numerous contributing factors like price, placement, and promotion, leading to flawed analysis.
The evolution of retail media is moving beyond online assets (1.0) and off-site targeting (2.0) into "Retail Media 3.0." This new phase focuses on capturing and measuring in-store physical experiences, integrating them into the digital ecosystem to create new demand rather than just intercepting existing intent.
In a volatile market, pressure mounts to focus only on short-term performance marketing. However, brands can't neglect brand building because strong brand awareness and relevance are what make lower-funnel tactics like retail media more efficient and effective in the first place.
If a brand's media plan heavily favors bottom-funnel channels and looks the same as it did years ago, their measurement is flawed. This indicates they are over-crediting demand capture channels and ignoring the impact of upper-funnel activities that create initial interest.
Contrary to the belief that Gen Z is purely digital, data from 18,000 consumers shows they highly value in-store discovery. They will visit a physical store to find new items but will often complete the purchase online later. This re-frames brick-and-mortar's role from a point-of-sale to a top-of-funnel marketing channel.
The primary obstacle to scaling in-store media isn't a lack of measurement technology, but a fundamental disagreement between brands, retailers, and agencies on what success looks like. Different teams use separate scorecards and KPIs, creating friction and preventing a unified investment strategy.
Retail Media Networks are competing against digital-only giants like Amazon but aren't fully leveraging their key differentiator: the physical store. By failing to introduce measurement frameworks that capture the immense value and sales volume of their brick-and-mortar locations, they suppress their own valuation and growth potential.