Delighting the shopper is at the heart of a successful marketplace
Retail Media isn’t just about placing ads in the sales funnel. It also drives more and fairer competition between marketplace vendors, allowing new entrants to build market share and ultimately offer the customer more choice. More choice delivers a better shopper experience, higher sales revenue, engaged vendors and a larger advertising potential. These four elements add up to a sustainable marketplace business model.
Retail Media increases choice
A top priority for retail marketplaces is to widen choice by onboarding as many vendors as possible. As more than 10% of sales are made from the top 5 search display positions, simply adding product listings is not enough. And if small marketplace vendors can’t surface their products and compete with big brands, they will not stay long.
Search algorithms give new vendors some visibility but these algorithms rely primarily on past purchase history, which favors the head of the assortment. Retail Media, specifically Sponsored Products, gives vendors an opportunity to pay for exposure to new customers. This discovery improves the customer experience by delighting customers with products that they have an affinity for, but are not current buyers of. It’s much like entering a specialty deli for some homemade pastrami, only to discover a new corn-syrup-free root beer that will pair perfectly with your sandwich.
Retail media done right can give marketplace vendors the opportunity to build market share that would be otherwise impossible.
Retail Media improves onsite merchandising
When searching the depth of a marketplace assortment, we’ve all found those products missing even the basics: Biodegradable freezer bags, $6.50 OK. But how many are in the pack? What size are they? What are they made of?
Sponsored Products advertising forces vendors to create quality content around their offers so they benefit from their advertising investment. Quality content improves the shopper experience. Every additional product photo increases conversion rates. A video, full product description and tags do the same.
When a vendor invests in advertising, they create the high-quality product content required to convert customers into buyers and to realize the ROI of their ad spend.
Retail Media improves offer relevance
A diverse choice must not be at the expense of relevant search results. Irrelevant results diminish the shopping experience, customer satisfaction and organic sales.
A customer shopping for Levi's online who sees sponsored products in their search results for the wrong size jeans, or with photos that don’t match the description, will soon get frustrated and go elsewhere.
Retail marketplaces need advanced relevance scoring algorithms that factor in more than just the bid amount. Relevance algorithms should include data such as SKU description, price, discounts, photos, delivery services, speed, seller ratings, product availability and shopper recommendations.
When done right, with high-quality relevance scoring, and an automated and intelligent toolset. Sponsored Products empower the vendor to sell smarter, enriching the customer shopping experience and bringing it closer to that of a well-laid-out physical store.