A New Playbook for In-Store Retail Media in an Omnichannel Age, with Jeffrey Bustos, VP Measurement Addressability Data at IAB and Mike Wessel, Director of In-store Media at Kroger Precision Marketing

Transcript

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Peter Crosby (00:00):

Welcome to unpacking the Digital Shelf where we explore brand manufacturing in the digital age.

(00:16):

Hey everyone. Peter Crosby here from The Digital Shelf Institute. The crisscross journey of today's omnichannel shopper from digital to in-store and back again means that your retail media messages of inspiration, value, and convenience must follow them wherever they go. The IAB recently issued a new playbook for in-store Media. In this omnichannel world, it's a guide for testing, measuring, and learning in the messy and constantly evolving local store. Jeffrey Bustos, VP measurement addressability data at IAB and Mike Wessel, director of In-Store Media at Kroger Precision Marketing. Join Lauren Livak Gilbert and me to walk us through the playbooks takeaways. Jeffrey and Mike, thank you both for being on the podcast today. Jeffrey, first of all, thank you so much for joining us again on the podcast. We're delighted to have you.

Jeffrey Bustos (01:06):

Yeah, thank you so much for inviting me. I love this podcast. You and Lauren bring really awesome guests, and I've been a huge fan ever since, and I especially loved a lot of the work you've done organizational mapping. So yeah, thanks.

Peter Crosby (01:20):

Oh my gosh, thank you so much. We really appreciate it. And Mike Wessel, really delighted to have you on as well. Thank you so much for joining us.

Mike Wessel (01:29):

Thank you for the invite, Peter. Pleasure to be here.

Peter Crosby (01:32):

Now you're both here because there's just the world of retail. Media continues to evolve and the consumer keeps reminding us that it's an omnichannel world and that they decide where they go and how they spend their shopping journey. And so much more about retail media is continually changing, and particularly not only online, but also in store. So the IAB just put out a new playbook on in-store retail media really to help brands and retails understand how that fits into that overall omnichannel strategy. So I'd love to start off, Jeffrey, with you just telling us about that new playbook, that new report and why now?

Jeffrey Bustos (02:19):

Yeah, so we started the year off at the NRF writing a paper on in-store retail media. And there's been a lot of interest on in-store retail media. And I think one of the things that we saw was that despite the strong intros we're seeing on retail in store, there was not a lot of education, especially when it comes to merchandising and category management. We were seeing a lot of media people trying to understand in store. So the objective of the playbook was to provide step by step guide. It's not a standard, it's just best practices on what you should do, how people are approaching it. I think everyone's still evaluating and testing in store and it just really supposed to help retailers and brands and agencies understand the in-store environment. We were really lucky because during this whole conversation I kept saying, we need merchants. We need merchants. And Mike came from the merchant team, so he was indispensable. And for those that don't know, Mike leads in store at Kroger. And he was indispensable for a lot of this playbook because we try to look at not just merchant relationships, but in-store measurement. And then really the most important thing when you think about in-store is really how do you create a customer-centric strategy.

Lauren Livak Gilbert (03:31):

And I think Jeffrey, I love that the IAB also came out with online retail media playbook. So this is an arsenal for brands to have the understanding of what happens both online and in store as well as how it should be measured. And that's really what the full picture is around retail media. And I think the conversation is starting to pivot to that. Would you agree?

Jeffrey Bustos (03:55):

Yeah. Retailers going full funnel, I think it's really exciting. We're seeing a lot of the retailers expand just beyond onsite and we've written a lot on CTV and we're going to start writing much more on social commerce. But in-store has huge potential just because of the significant reach and engagement consumers have with the retailer

Lauren Livak Gilbert (04:15):

And in-store is not going away. It's just how it works together with digital. So Mike, tell us how is Kroger looking at taking a customer-centric approach for in-store retail media, especially when shopper missions get more and more focused about what they're trying to purchase?

Mike Wessel (04:33):

Yeah, absolutely. Great question. And when you take a customer-centric approach, I think sometimes we just kind of jump into it, but it's really critical to start with that customer problem that customer need or want. It's always a good reminder to kind of ground yourself there and understand what they're going through in the store. From there, we typically see the way we can help customers in a couple of different buckets, that being inspiration, value and convenience and shopping should be easy for customers. And our job as a retailer is really to give people the selection that they want in the store. But as you think about all of the different products that are coming out, things that are great innovations, yogurt is probably a classic example where it used to be flavor and price, but now you've got Greek yogurt, you've got dairy free yogurt, sugar free, the list goes on.

(05:31):

And all of those are wonderful things that customers tell us that they want. But with that it becomes more complex to navigate every single day. And so they have to navigate that every decision for every category and every aisle. And it's our job to help make it as easy as possible. And as we think about retail media and in-store retail media in particular, that's where we're trying to help our customers. And around those kind three kind of buckets there, inspiration, value and convenience. What's really interesting is as a shopper kind of completes their mission through the store where we can help them change this depending on what category they're in, how knowledgeable they are about the category. And so education becomes really important not only for what a product does, how it can help a customer, but there's new products coming out all of the time and we need to make sure that we are connecting brands as they're coming out with innovations to customers who are asking for that product.

(06:38):

And then from an inspiration's perspective, there's so many ways to think about inspiration. It can be as easy as probably a question we've all asked ourselves and our families around what are we going to have for dinner tonight? And it could be a step up of elevating something that we've had several times before as a family or as individuals, but it also could be something totally new and really getting customers to branch out and try a total new product that they've never even thought about before. Inspiration can come in so many forms and can, I mean, variety is the spice of life. It can always help customers in that regard.

Lauren Livak Gilbert (07:20):

And from a value perspective, I know that's a big focus for a lot of consumers because of the world that we live in. So can you talk a bit about how you talk about value from an in-store perspective and even how you're also coordinating with the digital team on being able to keep that message across your channels?

Mike Wessel (07:43):

100%. Yeah. Value is, especially in these times where we've seen inflation take off, we really want to provide the best prices for our customers in every way. And we work really closely with a lot of our consumer packaged goods partners, our manufacturing partners, to provide those deals where we can, we have a lot of different levers, I guess, for lack of a better word, to communicate to our customers in terms of weekly digital deals, that's something that is digital in its essence, but we are starting to highlight those in store as well with tags to say, I don't know if you saw this, but this product right here that you're thinking about picking up is on a weekly digital deal. So you scan this barcode real quick and clip that coupon and you've got this price. So it's a really nice connection from an online space into the in-store space to make sure that our in-store customers are getting all of the deals that they would see if they're shopping online as well. And so I think we've started to do that, but this whole omnichannel approach to value is important and it's going to continue to be important to make sure that no matter where a customer shops, they can get those deals and be able to get those products for the lowest possible price.

Peter Crosby (09:12):

And Mike, when you're really merging those lines, when you're bringing those digital deals into the in-store environment, how are your brands, how are the companies that you're working with to invest in retail media, how are they thinking about those experiences? Do they have that mindset coming in or is it an education job that you're doing? And maybe that's part of the reason for this playbook is try and sort of draw some of those connections.

Mike Wessel (09:45):

Yeah, I think everyone is on their own journey and you've got folks in manufacturers in some spots, others that are totally bought in and wanting to really drive everything from both in-store and online perspective. I think probably most understand the opportunity of both online and in-store working concurrently and working together and the amount of synergy that we can get out of that type of coordination. And so we're seeing that more and more and more. So yeah, I think everyone's kind of in their own spot, but I think everything is headed to this. How do we create the best possible experience for our customers, whether it be online or in store or in hybrid of both, because most of our shoppers that shop online also shop in store.

Peter Crosby (10:35):

And to that topic, when you're thinking of it all coming together, at the end of the day, it comes down to budget, I would imagine. Where are we going to spend, how are we going to spend, how are you seeing brands sort of budget for the kind of two sides? And as they're coming together, are you seeing the way brands are organizing their teams or the way they're organizing the budgets start to shift to be able to almost force this thinking to be an omnichannel approach? What are you seeing happening there?

Mike Wessel (11:12):

Yeah, there are, or and maybe still are in some spots, a lot of some old silos across organizations, but we're starting to see them come down and we're starting to see a lot more coordination across those silos. And so thinking more, there's a lot more thinking around being channel agnostic and budgeting in that way, and a lot more kind of coordination and cooperation across maybe different parts of manufacturers that we didn't necessarily even talk to each other before or even know each other's name. And we're starting to see that happen more and more as we kind of progress down this journey.

Lauren Livak Gilbert (12:00):

Jeffrey, are you seeing the same thing with the brands that you're working with around budget? I know you work with brands and retailers every day.

Jeffrey Bustos (12:07):

Yeah. What we're seeing from brands Mike was saying is we're seeing a lot more collaboration. I think there's silos everywhere, and brands are kind of seeing the importance of collaborating internally, which is, as I mentioned before, why the work that your team's doing in organizational mapping is indispensable. And what we're seeing a lot of in terms of in-store is that brands are kind looking to get that alignment of what is merchandising, what is retail media when it comes to in-store. And I think that those are still questions that a lot of both retailers and brands are still looking to resolve. One of the thing that we're looking to do with the playbook is I think every retailer will approach it differently, and I think every brand will approach it differently. And I don't think there's correct way of approaching it, even, I know you guys did, maybe it just Profitero did organizational mapping research and there's not correct organizational mapping.

(13:04):

It's really what works best for that brand. And I think kind of like what Mike said in the beginning was how do you solve the customer problem? And to quote someone else, Andy Murray, who, he's one of the smartest people in server that I've met, and he really brings the notion of how do we ensure that we're not just, I think in their account, a consumer's budgetary monetary budget, but they also have a frustration budget. They have a time budget. So what Mike mentioned in the beginning in terms of solving the consumer problem and kind of thinking of what the consumer's going to have for dinner tonight, if it's a Tuesday and you've had a full day of the office and you have to go run to the groceries and get some food, it's a very different customer experience than if it's a Sunday, you're strolling, you have the time, you're kind of exploring new brands, you have an interaction.

(14:00):

I think the biggest challenge for retailers is how do you balance those both experiences at the same time? Because I will do both the shoppings, but I'm still the same person, but I have two very different objectives that I'm trying to solve at the time. So I think that's kind of the challenge that we've seen in store, but I think it does provide a really exciting opportunity, especially because if you're a retail and you're bringing that first party data and 60% of sales are still influenced by digital, even though 80% of sales happen in store, there's a huge opportunity to bring a lot of that first party data from online and in-store. And what we're trying to do for in-store for privacy perspective and everything is really, it's not so much about personalizing the consumer experience, but localizing the consumer experience, which I think is much more important, much more efficient. When you think about the in-store environment,

Lauren Livak Gilbert (14:53):

I love that concept of localization versus personalization because I do agree, and actually Kroger spoke at Cannes Lions, and one of the personalization examples I loved the most that was on one of their panels was someone was selling pasta sauce, and they learned from the data that they both got online and in store that people who bought this pasta sauce also bought generic beef like Kroger branded beef to make lasagna. And that was information that they didn't have before. So they started pairing the pasta sauce with the beef, and they started creating recipes and targeting those consumers with that information, which made it more of a personalized experience online. But to your point, Jeffrey, I think from an in-store perspective, you can do that in a way where the in-store experience is more localized to that type of shopping if you're finding that the shoppers are also having that purchase behavior in store. Did I get that right with the difference between local versus personal?

Jeffrey Bustos (15:59):

Yeah, a hundred percent. I think using that data to make solve the consumer's problem, they're looking to make lasagnas, they're able to pair those two experiences together. And really, it's really a how to make shopping as seamless as possible for the consumer, but also inspirational based on the inspiration that someone wants to make a lasagna. It's not just like a pasta. And I think lasagnas are a little bit more of an exciting recipe to make that a pasta. So I think it really does make it much more exciting for the consumer to have that option as well.

Mike Wessel (16:33):

And Lauren, maybe even to take it a step further, when we think about localization, there are, I go straight to maybe a southwestern kind of area within the United States where you start to get some of that more Southwest cuisine, and that's the type of media that we want to deliver. That's the sort of inspiration that we want to deliver in that area because it just resonates better with the shopping behavior that happens in those stores. Now, if you go totally somewhere else in the country, I'll call it maybe Kansas City, Nashville, somewhere like that, maybe that message changes the barbecue. And you could even see that even at a store specific level as you get into specific markets, there could be some areas that over index and sell more of a specific product versus another. And where retail media in-store retail media is going is being able to customize that language by that location so that before when we had had to have a blanket message across the enterprise or across that division, we're able to get more nuanced and connect in a more localized way.

Lauren Livak Gilbert (17:48):

We're talking a lot about data, and a big piece of that is also measuring the data and measuring the effect of all of the work that's being done for retail media across all channels. And I know Jeffrey, the IAB put out great online ROI measurement standards, but from an in-store perspective, how Mike, are you thinking about measurement, especially when you're thinking about in-store measurement and online measurement together?

Mike Wessel (18:17):

Yeah, another really good question, and I do know you called attention to it, Lauren, but the IAB measurement playbook has done a nice job kind of explaining where we are as an industry, also where we want to go as well. And as I think about measuring in-store media, we are happy. We're happy with the progress that we've made. We've made a lot of progress at measuring. I don't think we're done yet. And so as we think about measuring in store, we want to get to a spot where it aligns totally with the online measurement so that we have really cohesive and consistent approaches across channels. The benefit of that is as a brand is looking at its budget and saying, where do I want to help support my products in the store? They're able to make clearer, better decisions depending on their objectives on each of those campaigns.

(19:17):

And so really getting to that level of clarity is important. And I think Jeffrey mentioned it a little bit earlier around online advertising, online drives in-store purchases, but in-store messages also drive online purchases as well. And so as you see that advertising both in-store and out of store, it should work together and we should be able to measure it that same way. And so our ultimate goal was really to get an understanding around that incremental return that advertising drives consistently across channels. And I think that consistency will help us really bring together a lot of information and make choices and allow us to make better choices on how to connect with customers and connect brands to customers. And I think that's exciting about in-store media right now, we mentioned it a little bit earlier around the localization, but that greater amount of flexibility in our messages will allow us to, as well as partnering with that better clarity around measurement, it's going to help us really get better altogether.

(20:28):

A fun example that I like to kind of bring out is a message that tells customers that the bakery has just finished baking the sweetest, best tasting fresh cinnamon rolls by coming right out of the oven as they're coming out. That can create a great experience in the store that you just can't replicate in the online space. And so that's where we want to go with some of this in-store messaging. If you can really take some of those events that are happening in the store in real time and then inform customers about what is happening in that store, I think there's so much opportunity to drive some great returns there.

Peter Crosby (21:17):

Mike. I love that. I love that idea. And I'm wondering how those messages that are, that instant and of the moment come to life for the consumer, what is that experience? Is it a screen that flashes that up? Is it an announcement? Do they get something on their phone? Just walk me through how that can be delivered efficiently and not feel intrusive or overwhelming or something like that.

Mike Wessel (21:47):

Yeah, we haven't gone to, I think it could come to life in a variety of different ways. And Jeffrey mentioned it really early on. We're all kind of learning in this process as it evolves. So I can't say that we have necessarily cracked the code on it yet, but I could see it easily coming up on a digital screen. I could see it maybe coming overhead in the audio and letting customers know that, Hey, some fresh cinnamon rolls are ready for you. Come on, stop by the bakery and grab some. It could come to life in a variety of different ways. And what's nice about it is it's really just activities that the store is doing. It's not, we try to stay away from that, from being intrusive, right? Because that's not something that a customer wants. It's not a customer need, it's not a desire, but that information of what's happening in the store I think is relevant to customers.

Peter Crosby (22:42):

Yeah, no, that makes perfect sense to me. One, because cinon roll should always be announced when they're fresh, no matter what. So that's never going to be an intrusion.

Mike Wessel (22:52):

Personal weakness of mine, Peter.

Peter Crosby (22:54):

Exactly. I don't think you're alone in that. But secondly, I think the desire to that is the joy of in-store should be, I'm in this place right now and I'm coming in with the mindset. Jeffrey talked about the frustration and insight. Where are they in their journey and that they can find something that you talked about earlier that inspires them, that picks up on what it is and can guide them towards a choice that works for them. I think that's the joy of the in-store environment and it being of that moment. And I think the more and more that we're able to use that combination of data and instance to be able to drive a better experience, everyone benefits at the end of that.

Mike Wessel (23:44):

I agree. And what you're calling out as almost the magic of in-store is also sometimes some of the challenge, right? We are dealing in the physical space of retail and it can get messy very quickly. And so that's the journey that we're going on is we see this opportunity to make and really capitalize of the magic that is in store where we can get the scents and the flavors and real time sampling. All of those things can happen in the store, and you can create these wonderful moments where brands can connect with customers, but you also have these instances where if you want to have a signage in store, but then all of a sudden it works really well and you sell that product down, it works just like a display is supposed to, and then all of a sudden you don't have the product to fill the end cap. What do you do then? And I think that's where we get really excited about where in-store is moving, is to be able to have that flexibility in that space to allow the stores to pivot and say, okay, we're out of this product, but what about this other one? And that, I think inherent messiness, it can be a challenge, but it also leads us to some magical moments as well.

Peter Crosby (25:09):

So for all the brands that are listening to close us out here, Mike, what are your tips for working with retailers around in-store media? What are the best practices that are coming to life in the playbook that you think our listeners should hear to try to make the most of these opportunities?

Mike Wessel (25:32):

Yeah, I think where I start is in-store, retail media has been around a long time, but it is evolving quickly. It's an exciting new space. And I would encourage any brand listening to partner really closely with your retailers. We are all on a learning journey, and being able to partner in that learning journey will allow us to really push each other to become better. So have this learning mindset, be willing to test and learn, and then take those learnings as they are, adapt to them, learn how to make better, how to become better. I just think about how the content needs can change over time as well. We're going to be creating different things together and different approaches together. Retail is messy, but it's also where the magic happens. So let's make sure that we test and learn and figure out what the best way forward is. And then the second thing I would recommend is, as you're partnering with your retailer, always come back to that customer problem, that customer need that is so first and foremost, if the customer wins, everybody truly wins.

Peter Crosby (26:52):

And Jeffrey, for you, as you're bringing the playbook, was I think kind of your brainchild as you bring this to market. What are you hoping that our listeners will get out of this piece?

Jeffrey Bustos (27:09):

So I really hope that when folks read the playbook, what they really focus is how do I ensure that I focus on the customer experience and keep it really simple? As Mike mentioned, retail is messy, and there's a lot of really good technologies that exist there. But if you start with What technology should I put in store, you're kind of starting with the wrong point. You should start, how do I deliver the best message and experience the consumer? And then I think you can start testing and iterating different technologies because it's not just within a home improvement store versus a grocery store. You'll have drastically different, you'll have more DIY, you have more such interactive experiences versus a retailer's more about trying products and looking at promotions. And it's more about that the purchasing cycle, the conversion windows much faster and people are purchasing much more often.

(28:12):

So I think the messaging is drastically different. I think even to make mentioned, even geographically, different consumers are behaving differently in different parts of the country. So it's really ensuring that how can you localize your in-store experience to align with that customer experience? And then I think we're still reiterating and in store, I think kind of like the playbook. The reason we say to Playbook, it's it's messaging. We're going to go get in the playground, see what works, see what doesn't work, and then we'll come that next year. And I think in one or two years we'll say, this is what we know is best practices, but it's not. And the playbook is just kind of supposedly help us test and learn throughout the process.

Lauren Livak Gilbert (28:57):

And I would encourage all brands and retailers that are listening to also think about how can you incorporate this into your joint business planning conversations. The DSI just did some shout out some research on JVP that I encourage everyone to look into. But these are the conversations where you should be bringing the in-store team and the digital team from the brand side and the retailer side together to jointly have a conversation. Because if you're having separate retail media, joint business plannings from your business planning conversations that don't maybe include marketing, you're not going to be able to have an omnichannel approach. So I think using these tools and using these playbooks during your joint business planning conversations and the conversations with your retailer partners is really going to make a huge difference for brands moving forward.

Peter Crosby (29:48):

So I think the next step is to close this out with where people can find the playbook. And Lauren, I think you've managed to wrangle having it on the DSI website, is that correct?

Lauren Livak Gilbert (30:01):

Yes. You can find the link to the playbook in the partner section of the DSI. So if you click on that, you can link out to download the playbook.

Peter Crosby (30:08):

Terrific. So Jeffrey,

Jeffrey Bustos (30:11):

Go ahead, plug in. You want to hear more about Iner conversations? You can join us at Connected Commerce September 17th and 18th in New York City. We're actually be diving into this topic. We're really excited. We will have Kroger talk about measurement standards as a whole, kind of one year later, where are we? And then we're actually going to also have Kroger help us have conversations on CTV measurements. We're also have a lot of conversations, and in Instore we're bringing experts from Sam's Club, Lowe's, Albertsons, and other retailers including Tesco and Sanco from a global perspective as well.

Peter Crosby (30:50):

Great plug. Jeffrey, thank you so much for sharing that, Jeffrey. Mike, we have really appreciate, first of all, just the investment that you are making in trying to capture the moment of what's possible and keep up with it. And you know it, like you say, it's messy and it's going to keep changing. But to put out these guidebooks and really invest in helping your members and others understand the best way to test and learn in this environment is really valuable. And for then you to come on the podcast and share it with our listeners is a real honor. We're grateful. Thank you so much.

Mike Wessel (31:27):

No, thank you Peter and Lauren. It's been fun.

Jeffrey Bustos (31:29):

Yeah, thank you so much for having us. Really appreciate it.

Peter Crosby (31:32):

Thanks again to Jeffrey and Mike for sharing the playbook with us. Get your copy at the partner resource center@digitalshelfinstitute.org and become a member while you're there. Thanks for being part of our community.