How to evaluate if your retail media increases market share

    October 30, 2023

    Retail media is a powerful lever for building market share, but many consumer brands are struggling to unlock its full potential. Clayton Roop, solutions consulting director at CommerceIQ, breaks down how brands can determine if their retail media truly increases market share.

    At a time when private label is gaining ground on brands in many categories, it has never been more important for CPGs to understand if their retail media spend is helping to protect and increase market share.

    This is easier said than done.

    Despite more and more investment flowing toward retail media, many brands continue to fumble in the dark when trying to evaluate the efficacy of those investments. 

    The metrics are clear, at least in theory. If done right, retail media marketing should drive conversions, market share, and – ultimately – revenue and/or profit. In practice, however, connecting the dots between retail media spend and market share can be tricky.

    A big problem is the high number of variables to contend with. Whether it’s prices and promotions, competitor activity, national brand campaigns, or out-of-stocks, there are many factors that influence market share. Add retail media on top of those, and things get a little blurry.

    The waters are muddied further by notoriously opaque reporting standards and inconsistent methodologies across different retailer media platforms and ad networks. 

    What’s more, many brands have a strong legacy of basing their understanding of sales and market share on in-store trends. Those methodologies and signals don’t necessarily apply to the digital shelf, leaving brands without a clear sense of whether their online market share is heading in the right direction.

    The good news is, those problems are eminently solvable with the right approach to measuring and optimizing your retail media marketing. Here are four areas we recommend brands pay close attention to.

    1. Don’t rely on somebody else’s market share definition

    A common problem brands run into is having to rely on data sources that are not customized to their specific needs. 

    Many market share providers use non-custom taxonomies to register their market share. As a brand, this means you are reliant on how a particular retailer classifies you and your competitors, rather than measuring market share based on your own definition. 

    The result is unnecessary friction for brand teams as well as a lack of trust in market share calculations. 

    It’s critical to work with a market share definition that reflects how you view your business and enables apples-to-apples comparisons across retailers. Using your own custom definition also means you can still get sensible metrics in the case of an erroneous classification. We all know how easy it is for a product or brand to mistakenly end up under, say, tea instead of coffee. 

    Brands should also insist on the right level of granularity.

    A brand-level view is not good enough. Especially on Amazon, where billions of retail media marketing dollars are being spent, you need a market share view down to the SKU or ASIN level.

    2. Zero in on incremental growth

    To drive market share through retail media investment, brands need a retail media strategy that is ultimately oriented toward incremental growth.

    In this day and age, when market share is going to lower-value and private-label items, your retail media has to find new consumers to make the pendulum swing the other way. This means brands need to implement something within their retail media that is going after new household penetration and incrementality. 

    Playing defense is not the answer. If brands pull back just as the market is shifting, they risk losing even more share to lower-priced or private-label competitors

    3. Don’t default to the same old KPIs

    This focus on incrementality should also extend to KPIs.

    Many brands default to a familiar set of KPIs when evaluating retail media investments, particularly ROAS (return on advertising investment) and ‘new to brand’ users. However, these won’t tell you if your retail media marketing is, in fact, driving incremental growth. 

    What’s more, every retailer will use a slightly different definition. Attribution windows, brand halo attribution etc will all be different, which makes it impossible to compare ROAS numbers across retailers and ad networks.

    As a result, brands often end up overinvesting in things that might provide a good ROAS but aren’t truly incremental. They are not driving the business forward, and they are not building market share.

    CommerceIQ’s unique incrementality metrics – iROAS, incremental factor, and incremental sales – use signals from the digital shelf to help determine if a paid sale was indeed incremental to your brand. 

    Instead of relying on a simple ad metric to drive market share, these incrementality-focused KPIs combine digital shelf sales metrics and retail media metrics to give brands a much more accurate view of how their spend contributes to market share growth.

    The field of retail media metrics and optimization is evolving quickly. Brands can’t afford to get stuck in the old ways of thinking. If you rely on outdated metrics, you leave the door open for your competition to charge ahead with smarter KPIs

    4. Make sure market share data gets to the right people

    The right metrics are critical, but they can only take you so far.

    To increase market share using retail media, the people driving strategy through retail media must have access to relevant market share insights.

    It sounds obvious, but this is a stumbling block for many brands.

    There is often a disconnect between advertising and sales. The sales team will have their ideas for what they think will drive market share, but if those don’t make it through to the advertising team, you can end up spending a lot of money on the wrong retail media initiatives.

    The problem is made worse by having multiple, fragmented data sources that don’t talk to each other.

    To get a solid grip on market share, you want to see how much you are spending on a particular SKU over the course of a few months, track your market share against that, as well as factor in pricing and profitability. 

    Crucially, you want to be able to do this all in one place. 

    Whether it’s the c-suite looking at market share, the sales team who want to understand their promotions, availability, and sales metrics, or the advertising team executing at SKU level, you want everyone to be looking at the same data.

    Having all the relevant insights in one unified platform is a huge time and communication saver. It helps break organizational silos and empowers brands to make quicker, smarter, and more action-oriented decisions – all of which ultimately help increase that all-important market share.

    Curious to find out how iROAS and CommerceIQ’s powerful, unified platform can help build your market share? Book a demo with our consultants today!


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