Incrementality is the golden metric for retail media performance.
“We’re trying to create a new media channel here and you have to show that it actually works,” said Ashley Nickell, head of marketing at Grocery TV.
In a recent meta analysis, Grocery TV discovered that consumer packaged goods (CPG) brands averaged a 14% increase in incremental sales when advertising through its in-store retail media network.
- The analysis covered sales lift studies for CPG brands in categories across the store, including candy, snacks, and produce.
- Blueberries, the top performing product, achieved a 17.6% sales lift via its in-store campaign that highlighted the product’s health benefits.
“If you look at social and when it was just getting started, Facebook did something similar where they were able to prove incrementality and that spurred the industry toward social,” said Nickell. “We're trying to do the same thing—we want the brands to feel good about the spend that they're putting into in-store retail media.”
In-store retail media is still in its early stages, with US ad spend remaining below $1 billion through 2027, per our forecast. But many retailers, including Walmart and Ulta, have begun to jump on board, enticed by the potential to increase revenues.
“Retailers are actually quicker to move than the brand side sometimes,” said Nickell. “Yes, they have a higher level of complexity because they must balance the customer experience with monetization, but they’re really excited about the opportunity because the revenue potential is obvious.”
Brands, however, are a little harder to convince, said Nickell.
- Most of the momentum from brands exploring in-store retail media has come from brands outside of the CPG category.
- “Non-endemic brands have hopped on quicker than endemic brands because they see the potential for expanding their reach in brand-safe spaces where consumers are paying attention,” she said. “Whereas on the CPG side, we’re having to kind of talk them through shifting some of their budgets to this space.”
The bottom line: In-store retail media can be a valuable upper-funnel tool for marketers, especially when paired with digital efforts. However, to secure advertiser dollars, retail media networks will need to prove the effectiveness of in-store media and demonstrate how to harness it in the most useful ways.
This was originally featured in the Retail Media Weekly newsletter. For more marketing insights, statistics, and trends, subscribe here.
