Physical store is next major channel as retail media continues to evolve

As retail media evolves and outpaces all other forms of ad spending, it becomes more targeted, more effective for brands and more valuable for retailers. So said, Acosta Group, which released its recent Seamless Shopper Qualitative Research Study in advance of Groceryshop, offering insights on the importance of in-store shopping and highlighting three key expectations in consumers' seamless shopping journeys. 

"We identified that consumers expect to be informed, want to be inspired and appreciate personalized content when that content provides convenience or savings," said Kathy Risch, senior vice president, thought leadership and shopper insights at Acosta Group.

Applying the company's proprietary shopper insights to further inform its strategies, Acosta Group's digital commerce team has identified physical stores as the next major retail media channel for brands to directly connect with and influence their customers.

When it comes to grocery items, consumers from Gen Z to Boomers prefer to shop in-store, particularly for items such as fruits, vegetables, meats and seafood, according to Acosta Group's November 2023 "The Why Behind the Buy” shopper community survey. 

Understanding the power of the in-store experience to influence shopper behavior is critical for brands, and consumers have noted that retail media is becoming a part of this experience via digital screens. 

[Read more: Generation next: Capturing millennial, Gen Z shoppers]

"The physical store is quickly becoming the next canvas for media, and that means we're starting to identify retailers that might not yet have the digital footprint to capture the traffic they can attribute to their brands or stores," said Cody Tusberg, senior vice president, retail media at Acosta Group. Retailers that lack pure digital reach are turning to their footprint to distribute in-store digital content. Success in this space translates to measurable value for the shopper and incremental growth for brands.

"Retailers have started to open up digital signage that we can buy programmatically in as little as a week, when we used to have to plan months in advance," Tusberg said. "We can now bring fresh content to engage consumers and drive trial, loyalty and household penetration." 

If a brand goes viral, Tusberg explains, the digital team can almost immediately develop and publish content that reflects that innovation, trend or flavor profile in the physical store, providing a curated experience for customers.

According to Acosta Group's 2023 "The Why Behind the Buy" shopper community survey, 87% of all shoppers have a retailer app to assist with grocery trips in a store. These retailer apps, according to the company's recent qualitative study, are the number one digital shopping tool, with consumers saying they use them to learn whether an item is in stock, what aisle it's in and whether there are any related digital coupons.

"As consumers continue to bring their devices into the store, the connected shopper experience extends from the home into the retail location. Understanding this behavior helps us deliver the right message in the right format in the right location," Tusberg said.

[Read more: Forecasting the future]

Acosta said that brands can right-size their investments based on scale and capabilities by focusing on the nuanced differences between retail media networks. 

"We know that retailers will ask for investment, and brands need to understand individual retailer capabilities as well as the execution and measurement of their investments, or they could misallocate budget for their brand and shopper initiatives," Tusberg said. For instance, a full-funnel media strategy that reaches a large incremental audience may not meet a brand's needs as effectively as a longer-tail RMN focused on driving sales. Understanding what retailers have to offer and then capitalizing on those opportunities is key for brands. The toolset now lives with the brand to take advantage of.”

Acosta emphasized that today's seamless shopper wants easily accessible information about the products they're purchasing. Reviews are by far the most useful information shoppers look up online, with photos and product specs also listed as being important, Acosta said.

Acosta offered the following responses from shoppers and advice for retailers:

Millennial Shopper: "I love to look at ingredients, customer reviews and the product packaging."

False and conflicting reviews and a lack of details have a negative impact, and AI search results can be polarizing or misunderstood by shoppers.

Gen X Shopper: "I do not want AI answers (in a Google search); they are not valid to me...I just don't want a machine/face or person/thing doing my shopping and research for me."

Millennial Shopper: "I don't enjoy when the only reviews are from the actual manufacturer's website. I don't trust these as much."

Shoppers appreciate inspiration from retailers, offered via item variety, recipes and product pairings that help them make a purchase decision.

Gen Z Shopper: "I like having similar products recommended under the product page so I can search."

Boomer Shopper: "I like when I'm shopping online and the store's site offers dinner ideas with their sale items and a recipe with the grocery items needed."

Great retailer experiences come from helpful employees in-store and personalized ads and reminders. While some consumers don't like retailers tracking their purchases or search history, many have come to appreciate the value-adds, like coupons or discounts on items they purchase most frequently. 

Millennial Shopper: "I like that Facebook gives me sponsored ads that correlate to things I've searched or bought before. I've gotten great ideas for gifts and for fun things for myself from shops I'd otherwise not know about."

Gen X Shopper: "It's nice that Alexa asks me every few weeks if I'm running low on V8 energy drinks and need to re-order."

Boomer Shopper: "Ten years ago, I thought it was creepy and felt spied on. Now I usually appreciate that I can save time and money by using retailer suggestions."

Shopper research for this qualitative study was conducted over two days in July 2024 with 32 pre-screened participants aged 18 to 75 from a range of income levels, all of whom shop both in-store and online at least three times a week and had shopped once in the last week. All participants were members of Acosta Group's proprietary Shopper Community of over 40,000 demographically diverse consumers.