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.

The traditional buyer journey is being upended as users turn to AI search for direct, synthesized answers, bypassing top-of-funnel discovery on brand websites. The marketing focus must shift from traditional SEO to a new discipline of influencing AI recommendation engines to ensure brand inclusion.

Marketing is polarizing to two extremes: hyper-scalable, AI-driven digital content and deeply personal, analog experiences like pop-ups or community events. The middle ground—print, billboards, banner ads—is becoming obsolete.

For grocers, the primary value of in-store media isn't just selling ads to brands. It's a strategic lever for inventory management. By using targeted digital messages to accelerate the sale of slow-moving products, grocers can improve inventory turnover, which in turn strengthens their negotiating position with CPG suppliers.

Salesforce data shows that AI searches are nine times more likely to result in a sale compared to social media traffic. This stark difference highlights that consumers using AI for shopping exhibit significantly higher purchase intent, establishing AI-driven search as a superior conversion channel for e-commerce.

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.

As AI separates brands from the point of purchase, B2C marketers must learn from industries used to intermediaries. They can adopt CPG strategies for being top-of-mind without controlling checkout, and B2B tactics for influencing customers who complete most research before direct engagement.

The role of physical stores is shifting. They are crucial for omnichannel strategies, turning returns into valuable data collection and exchange opportunities. Furthermore, AI search is being deployed on associate devices to power "endless aisle" discovery in-store.

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.