P2PI: Tell us about LORMN and the capabilities it offers marketers.
Subramanian: Lowe’s One Roof Media Network was developed to allow brands to better connect with home lifestyle shoppers, who have massively increased their online shopping through and beyond the pandemic. The home has become “everything.” Whether it’s also your office or your gym, making these areas of the home special has become increasingly important. We’ve seen a 50% increase in consumer searches for home lifestyle products, and 90% of homeowners are planning projects for their homes over the next two years. We are doubling down on innovation and offerings to captivate and inspire these shoppers and provide brands with more data and media opportunities than ever so they can break through this quarter and beyond.
First, we’ve developed strong partnerships with industry experts like Criteo, Yahoo and Pinterest to maximize reach, consideration and conversion both upper and lower funnel. We provide easy and unique ways to access and activate data and insights and personalize omnichannel campaigns. In short, marketers need a retail media network that makes programming better for all. Shoppers get to see the home environments that reflect their unique identities and lifestyle, and brands get to see what matters and drive the results they want.
For example, this spring, LORMN helped brands see that shoppers were seeking grills and outdoor cooking, power equipment, patio and outdoor living items, appliances and popular, kitchen and bath accessories. We also saw spikes across air conditioning, potting soil, refrigerators, hoses and dishwashers and were able to share those insights with our brand partners.
P2PI: How has LORMN evolved since its launch? Also, talk a little about the recent launch of ad placements and mobile app.
Subramanian: We have a differentiated and engaged audience of 70 million customers across Do-It-Yourself and Professional (DIY-U). When you think of the growth outlook of the home improvement/home lifestyle industry, this customer is going to continue to be engaged with omnichannel solutions, which Lowe's is well equipped for.
Our audience, paired with our approach, is a winning formula. We are building a best-in-class portfolio of services and capabilities that will help distinguish Lowe’s in the retail media space. Enabled by our exemplary retail media team, technology and partnerships, we are continuing to create meaningful connections between Lowe’s consumers and brands to drive mutually beneficial outcomes for everyone.
Smith: Lowe’s has really stepped up their offerings, and while they weren’t first to market, they’re focused on being best in market. We have significant Criteo data that shows that different ad formats on a retail site have a multiplier effect, addressing different needs for the shopper and enhancing their experience, while allowing brands to better provide a fully branded experience. We’ve worked with Lowe’s to expand their onsite presence and adding mobile app to the mix was an easy extension of what they were already doing onsite. Brands need to be where shoppers are, and Lowe’s has a very loyal customer base that uses their mobile app actively.
P2PI: Tell us about Lowe’s and Criteo’s relationship working together. What role does Criteo play in powering the network?
Smith:Criteo’s Retail Media Platform powers sponsored ads on Lowes.com. We launched Lowe’s first sponsored product ads in 2021. Seeing success, we have since grown to multiple placements on the website including search and browse, product detail page, and homepage placements. Our RMP allows brands to own premium placements on the digital shelf, and ties customer engagement directly back to sales. Brands have been impressed by the ROAS achieved through the Lowe’s and Criteo partnership, which on average is 10:1.
P2PI: Please share a recent case study or example of a brand activation or launch promotion that leveraged or was driven by LORMN.
Smith: We had a multi-product brand manufacturer who was looking to increase sales within the small appliance category on Lowes.com. Leveraging Criteo's Sponsored Products was a key component of its strategy, allowing the brand to target shoppers close to conversion at the point of purchase. However, two long-time market leaders had the advantage of long histories and top search results rankings. The manufacturer’s Q4 holiday campaign was successful, but ultimately fell short of category benchmarks given that these competitors were winning bids for search placements.
So, the brand manufacturer worked closely with the Criteo team to define their long-term strategy, focusing on four key pillars: aggressive bidding to counteract lower quality scores, an always-on approach year-round (which would then improve these scores), taking advantage of the newly expanded placements, and continual optimization – such as focusing on priority SKUs and maintaining budget fluidity to shift funds to highest-performing SKUs.
As a result, the brand manufacturer's ROAS saw a threefold increase to 350% from Q4 to Q1, while maintaining a constant spending level, and some high-performing SKUs saw a ROAS of nearly 1,000%. Further, improving performance will almost certainly improve search rankings, creating a virtuous cycle.
What I love about this example is that it touches on so many parts of our partnership with Lowe’s. It shows that their program works for both small and large brands, that new ad opportunities were used for the right clients, and that optimization can really help when teams work together.
P2PI: What are some emerging trends in retail media you are taking notice of and looking forward to?
Smith:We’re excited about the opportunities in this space, particularly around commerce media, which expands retail media to non-retail media owners and allows them to monetize for commerce everywhere, wherever consumers spend their time. We’re also excited about “Retail Media 3.0,” which will bring so many new ways to reach the consumer beyond just sponsored ads.
Second, we think crossing the online/offline gulf could be the single biggest driver of consumer connection and brand performance moving forward. Tying this data together holistically will lead to a step change in the power brands have to understand their shoppers’ behaviors, and for retailers to better see and understand the full purchase funnel.
Finally, we think there’s huge untapped potential in what insights we can offer brands.
Subramanian: I echo Sherry's statement. Here at Lowe’s, we think the power of social commerce is going to be even stronger than it is now. Shoppers are looking for inspiration and ideas constantly and being able to better tie that research and planning to purchase is going to be a big growth driver.
P2PI: What can we expect to see in the future from LORMN?
Subramanian: This year, as Lowe’s finalizes its first-party, data-driven offerings and expands exclusive collaborations with partners who dominate both off and online, brands will have access to unparalleled solutions to captivate consumers. We are offering offsite advertising at scale to reach our shoppers across more of their purchase journey. We’ve also launched an exclusive agreement with Pinterest, a critical resource for our shoppers who are research and planning. Finally, we are improving targeting across the purchase funnel.