In one line
The digital shelf is how a brand is found and chosen online: where it ranks in a retailer's search, its star rating and review count, and its product page. Retail media is advertising sold by retailers, such as sponsored search results on their sites.
What it does
- Organic rank follows sales: retailers' search tends to rank products by how well they sell, so last quarter's online sales lift this quarter's position.
- Retail media buys position straight away, with diminishing returns, and the position goes when the spend stops.
- Ratings and reviews turn visits into sales. The first few hundred reviews matter most, and buying is most likely at a high rating short of a perfect five, which shoppers can find hard to believe.
- Good product content (images, claims, the details shoppers check) helps search relevance and conversion, and it lasts.
Business and brand
Impact on the businessP&L, cash, share price
- Retail media is often reported as a return on ad spend that counts sales which would have happened anyway (see the next lesson).
- Position bought with retail media is rented: the cost recurs every quarter you want it.
- Content and reviews cost little a quarter and keep working, but they build slowly.
Impact on the brandMemory, loyalty, pricing power
- A brand that is famous offline still has to be found on page one.
- Reviews are part of the product: a rating that falls with a cost-cutting recipe change costs sales online.
- Strong online sales and good reviews feed each other: the brand ranks higher, sells more and gathers more reviews.
Try it
Buy it, earn it or build it
Spend the same extra money three ways: retail media to buy search position, a deal that lifts sales so the rank follows, or content and reviews. Spend it once or every quarter for a year, and watch six quarters.
Brightwater's share of the category's online search clicks, by quarter.
How the engine turns a star rating into conversion: it peaks near 4.35 stars, not at 5.
Notice: Retail media in Q1 lifts Brightwater's share of search clicks from 24% to 32% at once. The quarter after, it is 25%: the position was rented.
Runs Countermove's market engine: the reference soft-drinks market, three brands, rivals holding their plans so only your change moves the result.
Sources
- Spiegel Research Center (2017), How Online Reviews Influence Sales, Northwestern University
- Chevalier & Mayzlin (2006), Journal of Marketing Research: the effect of word of mouth on sales, online book reviews
- Blake, Nosko & Tadelis (2015), Econometrica: consumer heterogeneity and paid search effectiveness