Perch Recognized Twice By PathToPurchaseIQ As A Top 10 Retail Technology 2.0
Perch And Unilever – Beauty In Real Life Launch
We couldn’t be more excited to be recognized by Path To Purchase IQ in their recent article “Activation Gallery: In-Store Technologies 2.0” for not one, but two of our clients – Purina and Unilever. The article focuses on our “lift-and-learn” technology, advanced analytics, integration to mobile and online campaigns and our design integration into the shopping experience. Kudos to our partners and the whole Perch team for the recognition!
The Meteoric Rise Of Retail Media Networks And The Profitable Future Of Store As Media
Source: McKinsey
Inflation is running rampant putting increased pressure on retail earnings, as worries about 70’s style stagflation grow. With supply costs rising and customer demand shifting, Target has warned that its inventory glut will drag on earnings as they rely more heavily on discounting and may use clearance sites like Overstock. But there are new profit streams in sight.
The industry is abuzz about retail media networks and for good reason. Retail media spend doubled last year from $20 billion to $40 billion and Coresight predicts it will hit $75.1 billion this year! Retail media is the fastest-growing segment of media behind only connected TV, according to Michael Harrison, managing partner at Winterberry Group as the online advertising industry grapples with a cookie-less future. Across categories, 75-90% of brands are looking to increase their spend on retail media networks (see graph above).
Beyond Amazon – Retailers Rapidly Launch New Retail Media Networks
Source: McKinsey
Every other week we hear of new launches and they are extending to in-store customers and experiences.
Walmart Media Network is now Walmart Connect and includes in-store digital touchpoints. Walmart even recently announced electronic shelf labels creating nearly limitless ad inventory.
Macy’s launched its retail media network in 2020 and is going to offer a self-service portal later this year. CVS Health Hubs are launching with in-store digital throughout. Albertson’s hired Kristi Argyilan who headed Target’s Roundell and is extending their retail media network launch this month. Even Dollar General is getting in the game, enabling targeting of often overlooked rural shoppers.
80% Of Spend Will Be Net New – Increasing Profitability And Further Solidifying The Store As Media
Interestingly, the source of ad spending will net new for retailers and not cannibalize existing spend. According to McKinsey, “RMNs provide an incremental source of high-margin revenue, and substitution for shopper or co-op marketing can be managed. On the advertiser side, this surge in budgetary allocation to RMNs delivers performance that justifies the investment.”
At Perch, we are increasingly seeing advertising spend be married to in-store shopper marketing programs that deliver digital impressions and engagement like our lift-and-learn platform and product engagement marketing technologies. What better time time to influence shoppers than when they are in-store, in front of your product and have identified their interest in the category?
“A lot of CPGs have kept their brand advertising separate from their ecom advertising,” Momentum Commerce’s VP Todd Bowman says. “They were very siloed – you had an Amazon team, a Walmart team, a Target team. What they’re finding is, there’s a lot of duplication happening within their teams…. A lot of these CPGs are finding what they need to do is bring those teams together. When they come together, they’re able to build a broader front and build leverage to those retailers to help take a little bit more control of what’s happening.”
The economics of retail media networks are impactful. According to Customer Management Partners, retail media networks can transform the slim margins of grocery and drive meaningful 4.3% increases in revenue and in turn double net profits.
Source: Customer Management Partners
According to the CMP white paper, “What is certain is that retail media is giving the early adopters—like Kroger, Target and Walmart—another weapon to compete against smaller chains and independents. Beyond the direct revenue and profits generated by these programs, retail media networks are proving to be an increasingly valuable tool for delivering personalized experiences and enhancing customer loyalty, which drives incremental growth in the base business.”
Will 2022 Finally Be The Year Of The Digitization Of The Store?
What’s becoming clear is that retailers have valuable audiences of high-intent shoppers that are getting harder to reach with the demise of the online advertising cookie. Retailers are in unique positions to enable digital touchpoints online and in-store that brands will compete to own and message shoppers at the critical point of consideration. The retail industry has predicted the “digitization” of the store for a decade now. A perfect storm of the commoditization of reliable hardware, better data from computer vision and IoT, the demise of the cookie, and strong financial incentives make 2022 the year that the first meaningful steps towards the digital store are likely to be completed. And in the process, we will see billions of spend flow into retailer’s doors.
Purina Expands With Perch To Schnuck’s Supermarkets
We are excited to announce that Purina continues to expand out the Perch solution and has launched at Schnuck’s supermarkets. This builds on our successful deployment at Meijer supermarkets in Michigan, Illinois and Indiana. The experience is one of the largest lift-and-learn deployments in the pet industry.
Schnuck’s is located closer to Purina’s headquarters in St. Louis and is a frequent stop off for Purina partners as we continue to expand. Here is more of the in-store experience that includes:
Lift-and-learn product information for every product on the shelf
Product videos, ratings, reviews and descriptions
Cross-sell of recommended complimentary products
QR code links to mobile app, including their healthy pet AR experience
The Latest Retail Technology News
Every week we cover the top retail technology news in the industry. Brick-and-mortar retail has often been overlooked and is experiencing a technology renaissance from the ways products are sourced, managed, inventoried, merchandised, marketed, sold and delivered. New technologies are being delivered from computer vision, QR codes, RFID, loyalty programs, lift and learn sensor technologies, smart shelves and electronic shelf labels, supply chain management, in-store analytics, personalization and payments. We believe in the bright case for the future of brick-and-mortar retail, and we highlight the technology underpinning it all. And if you are looking to the future check out our annual Retail Industry And Technology Predictions from our CEO Trevor Sumner.
Walmart announced that it is implementing electronic shelf labels in its stores with SES Imagotags. The labels can be updated centrally or via sales associate mobile app, reducing the cost of printing and creating greater efficiency and better store management while the workforce spends less time doing mundane tasks and more time in front of the customer. The US adoption of ESLs and retail smart shelves was a part of our 2022 retail technology predictions and Walmart is the most notable example validating the trend.
A couple weeks back we highlighted the Buy Now Pay Later (BNPL) bubble with increasing defaults and competition, including from entrenched behemoths like Visa and Mastercard. This week Apple announced its intentions to enter the game, putting BNPL pureplays like Klarna and Affirm further on the defensive. Apple has an advantage in leaning to the more affluent, and through greater access to purchasing, financial and browsing data to establish risk profiles. Will Apple steal substantial share? It’s a good bet.
There’s definitely still VC money to go around. Marc Lore, who sold Quidsi to Amazon for $500 million and Jet.com to Walmart for $3.3 billion, just raised $350 million at a eye-popping $3.5 billion valuation to scale Wonder, a mobile food trucks service with “chef driven menus.” and even deliver meals directly to homes. The service has been available in several New Jersey suburbs, covering 132,000 households. The company declined to provide financial figures. But with a track record like Marc Lore and the long-term move to autonomous vehicles, maybe it’s a good bet?
Speaking of food delivery, Grubhub has partnered with robot delivery company Cartken to expand its delivery program to Ohio State to other college campuses this fall, after trials with many different vendors across campuses including Yandex, Kiwibot and Sodexo. “Robot delivery is exciting for students and helps provide even better service and innovative solutions to our campus partners,” noted Eric Harper, senior director of campus environments at Chicago-based Grubhub. “We’ve worked with Ohio State University for years on the campus dining front, and they are always an early adopter of solutions that create efficiencies for their operations and improve the student experience.
Pinterest has announced it has completed the acquisition of personalized daily shopping feed The Yes. The Yes will shut down its app and the team will focus on providing similar embedded and personalized shopping experiences within Pinterest.
After being the first to announce drone delivery as a concept, famously on 60 minutes, Amazon is finally launching a trial in California, lagging Walmart and others. The big questions is when these trials will move to some level of scale.
Forever 21 and Barbie have launched in-store, online and in the metaverse on Roblox. The new limited-edition collection includes a range of on-trend vintage style apparel items, swim, sleepwear, beauty, and accessories as well as home décor, inspired by the Barbie DreamHouse™. The collection will be simultaneously available in-store, online, and in “Forever 21 Shop City” on Roblox.
AI-powered customer engagement platform MoEngage has raised $77 million to expand their platform geographically. Their tools enable more intelligent and personalized interactions across channels. Over the last 12 months, they boasted doubling revenue, adding 500 new customers, and doubling its headcount to over 650 employees.
Take Blip, an online messaging platform for businesses, announced that it raised $70 million in a Series B round led by Warburg Pincus. Take Blip has evolved over the last 20 years to extracts customer insights across WhatsApp, Instagram, Apple Messages for Business, Google Business Chat and Telegram.
Total Wine has partnered with O9 Solutions to use AI to parse multiple signals from weather to local events to drive demand forecasting, inventory replenishment and advertising strategy. Tom Kooser, CTO of Total Wine, said, “We must transition to a digital operating model that allows us to make quick, data-supported decisions,” he said, adding that the technology the company is leaning on will allow them to improve forecast accuracy, alignment, and accountability across the company.”
Amazon has launched a virtual try on tool for shoes. Shoes are one of the easier applications for virtual try on since fit, contour and flow are fixed.
Stories To Share At The Retail Water Cooler
Rent the Runway doubled its revenue in Q1, from $33.5 million to $67.1 million, according to a company press release, hinting that the clothing industry may start to become more robust this quarter. Its active subscriber base rose 82% YoY and 17% QoQ. As a result, gross profit rose 178% to $22.5 million, and gross margin expanded to 33.5% from 24.2% a year ago. Despite the growth, Rent The Runway’s net loss was roughly the same at $42m.
Traditional cocktails are being canned as roadies. Jack and Coke is now being offered in a can with a 5.9% ABV. “We are strategically experimenting and learning in alcohol,” said Coca-Cola spokesperson Khalil Younes, who is responsible for leading flavored alcohol beverages. “We are excited about the opportunities, but we also know it will require effort and patience.”
The tampon industry is the latest category that’s experiencing product shortages and delays. While Tampax blames a successful Amy Schumer campaign that drove 7.7% sales lift, this is yet another example of a supply chain too rigid to respond to changing supply shortages and shifting demand economics.
And shortages may hit one of our most beloved condiments, Sriracha. The company announced on its website, “Currently, due to weather conditions affecting the quality of chili peppers, we now face a more severe shortage of chili.”