The growth of commerce media investments promises to connect brands with customers for longer stretches of the customer journey, especially when shoppers are close to purchasing. Though much of this extended digital journey leaves out the physical store, this strategy is changing.

“The pendulum is starting to swing back [to in-store],” said Amy Vollet, senior vice president of commerce and media at Saatchi X, during a panel at Advertising Week New York on Monday. “They need to make a differentiation in-store and find the places and spaces where they can close the deal.”

Over the last 12 months, many retail media advertisers have shifted focus to in-store and physical marketing to fill in the gap in full-funnel strategies, which have focused almost entirely on digital, according to Vollet.

In-store budget challenges

One of the primary issues identified by experts is that the in-store investments haven’t flourished at the pace of digital commerce media channels.

“Why in-store media has been slow to gain traction is the fact that the total retail landscape is a lot more fragmented than the online one,” said our analyst Sarah Marzano at the session with Vollet and Grocery TV CEO Marlow Nickell.

The top 15 US ecommerce sellers drive about 70% of ecommerce sales, while the top 15 in retail overall account for less than 40% of total retail sales, Marzano said. The landscape of retailers that aren’t pure ecommerce plays is more diverse and fragmented, making in-store media more difficult for advertisers to leverage.

“What that means is in-store media retail is going to develop really differently from what we’ve become accustomed to with online retail media,” said Marzano. “It’s not about the success of one giant, it’s going to take the success of many players.”

In-store funds for advertisers

Typically, Nickell said, in-store budgets are a part of larger out-of-home (OOH) allocations. But creative assets for OOH might not translate well into in-store ads. Often, Nickell said impactful video spots originate out of online and social campaigns, where the end goal of these formats mirrors in-store aims: To drive customers to buy.

To fund in-store campaigns, agencies are rethinking the way they traditionally allocate client budgets.

“Agencies are typically putting dollars into buckets,” said Vollet, referring to separate funds for OOH, digital and connected TV (CTV). “We really try, with my team, to stop thinking about everything as buckets, and [instead as] what we’re trying to do, and what are the best tactics and partners to achieve that.”

“We’re seeing trade dollars flow into paid placements in-store," she said. "Digital out-of-home is another natural place [to provide dollars].”

Measuring impact in-store

Experts agreed that agencies also need data to make the case to clients that in-store campaigns move the needle.

“You can’t tie an exact impression to an individual shopper with in-store video,” said Nickell, whose Grocery TV screens are in over 120 retailers and 6,500 stores. Instead, he said success is measured by comparing store performance in locations where campaigns run against stores where they haven't.

From the agency perspective, Vollet at Saatchi X is still searching for better metrics that tell the whole story for her clients.

“Everyone knows [return on ad spend] is not a great measurement,” said Vollet. “The term du jour has been ‘incrementality,’ and [we’re] trying to figure out what that means. I think we’re missing the point of contextual relevance, the ability to close a deal at the store."

Vollet sees in-store media as an opportunity for sustained brand lift, not just one-off interactions.

"I think we need to get back to some of our retail roots of thinking about movement through the store, and the ability to do both…context and content,” she said.

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