2PM - Monday Letter: ADVRETAIL

Retail Media Networks / Intro: First-party data is defining this era of advertising and sales. Companies are now in a race against time: they’ll build, acquire, or market to the platforms that have it.

When Facebook revolutionized advertising for early direct-to-consumer brands in 2011-2014, a volume of eyeballs preceded its advertising technology push. Facebook was built atop its user volume, human capital. For Google, a volume of searches preceded its advertising technology push. Google was also built on the byproduct of its user inquiries. But this is the era of user privacy and the end of third-party data – both were commonly used by Facebook and Google. Today, retail sales data is what supplies first-party collection. It is the most important asset in digital marketing today. First-party data precedes today’s advertising arbitrage. (Read More...)

Amazon and Walmart have created thriving ad businesses

Source No. 1 / Fast Company: Walmart vs. Amazon is one of the great rivalries in business history. And lately the retail giants have found something new to compete over: ad revenue. We don’t normally think of stores as advertising venues, and the rise of what amounts to retail media networks has happened quietly and gradually. But Amazon in particular has pursued the business with its typical zeal. 

Commerce media: The new force transforming advertising

Source No. 2 / Mckinsey & Company: Advertising is being transformed by commerce media, a new form of advertising that closes the loop between media impressions and commerce transactions to improve targeting, provide new audience insights, and deliver more relevant and valuable experiences for consumers.

Definition, best practices, and tips for building a RMN

Source No. 3 / Broadsign: The rise of retail media networks has been a hot topic these past couple of years, and for good reason! According to Forrester's Predictions 2022 report, retail media spend will grow to $50 billion globally in 2022.

Five myths about retail media

Source No. 4 / Mckinsey & Company: There are several excellent graphs that may be helpful to you in this link. More Here: Marketing budgets are flowing toward retail media networks (RMNs) as retailers, from Amazon to big-box stores to grocery chains, capitalize on the shift to e-commerce while offering advertisers unique audiences and valuable data insights to build new high-margin businesses.

The new DTC Power List was updated for August 29 with new data for 700 companies; the list his been re-adjusted to measure historical performance. Join here to gain access to this growing list. 

Amazon's empire of surveillance

Data / Insider: Amazon’s smart home ambition has customer data at its core buoyed by its many Echo products. “Hey Alexa, remind me to buy toilet paper” is not just a functional reminder but a datapoint collected by Amazon’s commerce teams. More here: Amazon's purchases of One Medical and iRobot are worrying antitrust advocates and privacy experts. Its business model is built on collecting data from customers and competition, antitrust experts say. A huge market share and ability to buy competitors make Amazon "sort of unstoppable," a data privacy expert told Insider.

Farfetch is closer to being the global platform for luxury

eCommerce / Forbes: “The Farfetch customers are digital natives, having grown up with two-sided marketplaces [online and offline] as an integral part of their lives,” Neves said. “The Net-A-Porter and Mr Porter customers are older, having started their luxury shopping habits with glossy magazines and the department store. This customer then slowly discovered and migrated to an online mode of shopping, but maintained a need for guidance and [they] depend on the authoritative voice of an editor who facilitates their discovery.”

Interesting data by Pipe Candy: Shopify is onboarding enterprise retailers at a faster rate than any others for the first time since 2018. It's a quiet indicator that Shopify will be in a solid position for GMV growth once the eCommerce market returns to form. Maybe they'll launch their own RMN next wit their Audiences initiative. 

Despite the crypto slump, top luxury players are still open to digital assets

Web3 / Bloomberg Audio: The demand for NFTs has slumped in recent months, so why are these brands so bullish on crypto? Bloomberg journalists Emily Nicolle and Taz Akhtar join Crypto Senior editor Anna Irrera to discuss why luxury brands have embraced NFTs.

The secrets to a successful NFT drop

Web3 / Business of Fashion: While brand recognition plays an undeniable role in which ones connect, experts say there’s much more involved in a successful fashion NFT collection. (Among the most popular fashion NFT collections is the Adam Bomb Squad, created by niche streetwear label The Hundreds).

Meta is teaming up with Jio for grocery delivery via WhatsApp

International eCommerce / Quartz: WhatsApp has rolled out a new feature in India where, for the first time, people will be able to browse and buy groceries and other household items without leaving the messaging app. The feature comes from a partnership between Meta, which owns WhatsApp, and Jio Platforms, which is part of Reliance Industries, a conglomerate of businesses including energy, retail, and telecommunications.

Amazon and One Medical: minding the data gaps

DTC Health / Stat: When Amazon announced its intention to acquire One Medical, a primary care organization that leverages its digital health platform and brick-and-mortar clinics to offer on-demand health care services, it declared "health care is high on the list of experiences that need reinvention" as a reason for the acquisition.

An open physical retail store with digital-only clothing

Retail Real Estate / designboom: The virtual experience meets the physical world within the AR pop-up store concept in NYC's SoHo neighborhood. Augmented reality fashion platform Zero10 has collaborated with creative practice Crosby Studios to create a metaverse store where elements of the digital realm jump into an IRL experience.

Flip The Channel / Intro: Turns out DTC was just a channel and not a category of brands all along. This week, Peloton announced it would begin selling on Amazon. In doing so, it’s venturing into a distribution model that I believe will become another signal to other enterprise-level of brands. Channel diversification is at the top of mind for a number of companies that relied heavily on direct-to-consumer strategy. It’s a concession of sorts. But it’s one backed by data, common sense, and every tea leaf a sound mind can find to read.

For over a decade, DTC has been the business model for a new generation of brands begun in the internet age. The hope was that by selling directly to consumers, brands could foster closer relationships with customers and collect data with the hope that the efficiency of the model would increase sales, promote higher profit margins, and fend off much larger incumbent brands. (Read More...)