How should we measure retail media in 2024?

From ROAS to reach, engagement to impressions, there’s no shortage of ways for suppliers to measure the impact of their media investments. When it comes to retail media, though, the focus tends to be on one metric more than any other: sales. And, while that’s not a problem per se, it does mean that the many other benefits that retail media delivers can go unnoticed. So why is that the case?

In recent years, a lot of the buzz around retail media has centred mainly on the ecommerce side of things – and for good reason, too. As well as a global pandemic that kept shoppers at home, we’ve also seen a cost of living crisis that has prompted millions to seek out value wherever they can find it. In one of our recent consumer studies, for example, we found that 44% of Kiwis now search online for the best deals before deciding where to shop^[1].

In combination, these factors have only helped to boost what was already a growing trend towards online shopping. As a result, some commentators expect the value of New Zealand’s grocery delivery market to grow from around $881m in 2023 to more than $1.65bn by 2028^[2].

Suppliers tend to go where their audience is, of course, which has led many brands to start exploring the opportunities presented by digital retail media. Inevitably, that has also helped to intensify the idea that sales performance is the best way to measure the impact of a retail media campaign. If you can draw a direct line between someone clicking on a web banner and adding the featured product to their basket, after all, why wouldn’t you?

This kind of “closed-loop” approach to measurement is undoubtedly compelling, and one of the most appealing things about retail media as a whole. It does, however, tend to ensure that the focus remains squarely on the sale when – in reality – retail media can play a role across the entirety of the marketing funnel. Across awareness, consideration, and retention, retail media can now help marketers meet a variety of different goals.

This is particularly true in grocery, where the opportunities to engage and influence tend to be that much broader. That applies to the combined physical and digital presence that most grocery retailers have, but it’s also relevant when we think about the sheer range of creative opportunities that exist in the grocery space; suppliers can now tap into everything from content marketing partnerships through to sponsored digital recommendations.

While that diverse environment might lead to questions about which channels are the best for specific objectives – winning back lapsed customers, for instance, or rewarding loyal ones – it also drives a much bigger one too: how should suppliers define success when it comes to retail media today?

Measuring beyond the sale

Today, retail media is a truly full-funnel opportunity. That’s true not just from the perspective of the various channels that advertisers have access to, but in respect of the data-driven insights that can help them find more of the right shoppers at each stage of the funnel, too.

Take Foodstuffs Precision Media, for example, one of New Zealand’s largest retail media networks, built in partnership with dunnhumby. Precision Media gives brands immense flexibility when it comes to audiences – as well as giving suppliers access to an audience of 2m New World and Pak’n’Save shoppers, for instance, the retail media network also uses insights from 200m annual transactions as the basis for deep audience segmentations.

As a result, if suppliers want to raise awareness for their products with millions of Foodstuffs customers via store media like point-of-sale and flanners, then they can. If they’re more interested in converting the 10,000 people who are most likely to respond to a sponsored product recommendation on the New World mobile app, then they can do that too. Precision Media offers huge reach and laser-focused targeting in tandem.

The key point here is that, with the right insights and the right channels at their disposal, suppliers can use retail media to drive awareness, consideration, and loyalty as well as sales. While “retail media” might be a convenient catch-all term, the truth is that it’s not a singular proposition; it’s one that gives suppliers the ability to meet a variety of different objectives.

That fact has two specific implications. Firstly, there’s the fact that retail media should be of interest to a range of different disciplines across supplier marketing teams and agencies alike; used effectively, it can be just as relevant for shopper and brand marketers as it is for those who focus solely on performance. Secondly, it also means that retail media now needs a much more nuanced definition of success.

Context matters

As with any form of advertising, the only “right” way to evaluate the performance of a retail media initiative is within the context of the overarching objectives. If a campaign is designed to reward loyalty and encourage retention, for instance, then we can’t measure its impact in the same way that we would for one designed to drive sales. Those goals are fundamentally different (even if they are connected across the longer term).

One of the major advantages to an advanced retail media offering like Foodstuffs Precision Media is that it gives advertisers the opportunity to understand performance across multiple dimensions. While that includes critical metrics like sales uplift and return on advertising spend (ROAS), it also enables deep insight into a media programme’s impact on things like engagement, reach, and behaviours.

What does that mean? Simply, that brands and agencies can now define success in relation to what they were trying to achieve. Rather than having to take a generic view of performance, or wrestling with metrics that give them only part of the answers they’re looking for, they can instead focus on measuring what really matters – whatever that happens to be.

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^[1] Dunnhumby Consumer Pulse – New Zealand Edition, September 2023

^[2] Grocery Delivery - New Zealand – Statista. Figures converted from USD.