How to Approach In-Store Retail Media Measurement
Cash may be "king" but data comes in a close second. Organizations capable of collecting and acting on data are equipped to exploit growth opportunities, avoid pitfalls and pivot more quickly. Rich, well-managed data is coveted by business leaders, but even those with limited data can punch above their weight if they can be creative and scrappy with what they have on hand.
This is particularly true in the world of retail media networks. Digital marketers and e-commerce platforms are the data wealth "haves" and those responsible for in-store media are often the "have nots." With in-store shoppers there is no digital footprint telling us who they are or which shelf signage and products they saw. Instead, retailers need strategies to identify and create datasets that can be used to generate measurement insights.
Choosing an in-store campaign measurement approach is driven by the availability and granularity of three types of data: transaction, ad exposure and control variables. What is available will determine the types of insights and level of detail that can be uncovered, including whether information will be at the customer level or aggregate store level. At the outset for many retailers, their options will be dependent on historical customer strategies, including membership, loyalty, payment and online engagement programs.
The most challenging dataset for most in-store retailers is ad exposure. Measuring incremental return on advertising spend (iROAS) for in-store campaigns is based on comparing the purchase behavior of customers exposed to ads versus the behavior of those who are not exposed, while controlling other baseline factors to ensure fair comparisons. We see three strategies for retailers to address the need for customer exposure data:
1. Observational data may include store visit volume, store-level campaign execution differences, pre- and post- campaign period sales and other factors to measure the impact of advertising on incremental sales. This type of dataset allows aggregate analysis for store-level campaign impact for media mix modeling (MMM) types.
- Advantages
- Applies existing operational data (e.g. store visits, campaign metadata)
- Can be used for ongoing monitoring
- Challenges
- No customer-level analysis
- Limited sensitivity to smaller changes in execution
2. Test and control data may be generated by setting up campaigns to create a group of customers who have the opportunity to be exposed to campaigns (test) and a group that does not have the opportunity to be exposed (control). Two possible methods are geo-based store groupings and switchback to turn exposure on and off in a strategic way.
- Advantages
Test plans can be devised to answer the most important questions
- Challenges
- Increased operational complexity to campaign execution
Typically used for one-time or short-term tests
3. Technology-enabled tracking may be implemented to monitor customer flow to count or estimate in-store ad exposure (impressions) and engagement (dwell times). Solutions vary in their accuracy and level of customer privacy. Tracking solutions can be effective for measuring both digital and non-digital ad formats.
- Advantages
More accurate measurement of customer ad exposure for more detailed insights, potentially at customer level
- Challenges
- Requires implementation of an in-store customer tracking platform
- Complex data management to map data across store navigation, campaign execution, transactions, etc.
- Privacy concerns
The bottom line is that in-store media can be measured. Retail media networks should start with the data that is currently available and build out more advanced capabilities as they grow.
About the Authors: Yunxiao He and Kathy Schaller lead analytics consulting at FocusKPI, helping retail and CPG clients develop action-oriented analytics and data science solutions that are customized to company-specific needs. The pair co-anchor projects, combining Yunxiao's expertise in advanced analytics and media measurement and Kathy's experience in business and marketing leadership, to deliver a unique value proposition to FocusKPI clients.