Amazon, Walmart return to basics

Plus: Another wrinkle for retailer-supplier price negotiations This edition is made possible by LTK APRIL 8, 2024 How do you integrate in-store advertising with off-site and connected TV? How is Google navigating retail media? Learn the answers to these questions and more at our virtual summit on May 3rd. [Sign up today]( Was this email forwarded to you? Sign up [here](. TOP STORY [Amazon, Walmart Connect’s recent moves signal a return to basics for in-store retail media]( [Amazon is ditching Just Walk Out]( in favor of Dash Carts. Not only will the move satisfy customers’ desire for familiar technology, but it’s also creating more [ad inventory](. [Walmart Connect]( also emphasized its in-store retail media potential last week, with a focus on expanding familiar strategies like sampling and TV screens. This back-to-basics approach might spark more in-store retail media ad spend. In-store [retail media]( spend is growing quickly. Just $370 million will go to US in-store retail media ad spend this year, or 0.7% of omnichannel retail media ad spend, but by 2028, that figure will more than double to $1 billion, per our March 2024 forecast. In-store retail media spend is comparatively low despite a massive audience. There’s limited space and limited inventory. The need for robust equipment makes it difficult for retailers to test and learn. [Measurement]( of in-store ad effectiveness is difficult. “There's a big financial investment for retailers who want to make these part of the in-store shopping experience, and a lot of them aren't very tested or proven just yet,” said our analyst Sarah Marzano on our “[Behind the Numbers: Reimagining Retail]( podcast. Story continues below. Shoppers are also hesitant about new in-store tech. “Some of the buzzy, really high-tech ways that we can bring retail media into physical spaces are likely to be at risk of being the most disruptive to the customer's experience,” said Marzano. “Do you want to put something in front of the customer that they don't know how to use?” [Walgreens’ 2022 test of Cooler Screens]( which showed ads on cooler doors, was unpopular because shoppers said physical pop-up ads and malfunctioning screens blocked them from products. Smart shopping carts like Dash Carts could also run the risk of consumer rejection because they are a departure from traditional shopping carts, but because customers are already used to carts, it’s likely the screen—and any ads that eventually run on it—will blend more smoothly into the shopping experience. Using in-store retail media to educate shoppers. In-store demos and sampling like [Ulta Beauty’s smart vending machines]( help consumers try new products, giving brands visibility. These programs can also be low lift and measurable, which is likely why Walmart said it was expanding its sampling offers. Activations that leverage existing hardware like TV walls and audio systems are also key to in-store retail media. In-store audio specifically presents a low-stakes environment for testing ads and promotions because customers are already used to it and it doesn’t require new hardware. And ads served via retailer apps can also serve as a form of in-store retail media advertising, even if purchases or product discovery takes place in-app. Consumers use these apps in-store, and retailers can use geolocation data to offer exclusive deals and information. The best approach will come from “layering some of those activations together to see the behavior that it inspires,” said Marzano. [Read online]( [Retail media adds another wrinkle to retailer-supplier price negotiations]( The insight: Retailers’ efforts to boost their high-margin retail media businesses are complicating their ability to negotiate with brand partners, particularly as they push for price concessions to alleviate the pressure on inflation-weary shoppers. - Measures like pulling products from shelves—previously a highly effective bargaining tool—can make brands less willing to invest in retailers’ ad services, a consumer goods executive told Reuters. The dynamic: We expect CPG digital ad spending in the US to grow 15.5% this year to $48.79 billion, the fastest growth rate in three years. While retail media won’t get all of those dollars, the steady flow of CPG ad budgets to retailers like Walmart and Kroger is giving suppliers more negotiating room during price talks. [Retail media adds another wrinkle to retailer-supplier price negotiations ]( [Keep reading]( Email sent to: {EMAIL} If you cannot view the HTML newsletter, [please read it in your browser here](. [Become a Premium Subscriber]( | [Advertise with us]( [Manage your email preferences]( | [Unsubscribe]( | [Terms of Use]( | [Privacy Policy]( ©2024 EMARKETER, One Liberty Plaza 9th Floor, New York, NY 10006 [LiveIntent Logo]( [AdChoices Logo](