Latest / Retail Media Breakfast Club / Why Retail Media Looks So Different in the US vs Europe (And Why You’re Comparing It Wrong)
Transcript
- With commentary === [00:00:00] Kiri: Last year I spent a lot of time in Thailand, while me and my family were waiting it out for our US green cards to be processed. [00:00:08] Now living in Thailand means riding motorcycle scooters a lot, and I got [00:00:15] pretty comfortable with it. I was navigating traffic that has no rules, dodging wild dogs, driving my 8-year-old son to school. Don't judge. And then my sister-in-law came to visit and hopped on the [00:00:30] back of my scooter as a passenger, and I immediately nearly ran into a building. [00:00:35] [00:00:36] Kiri: Same scooter, same road, but the extra weight changed the balance in ways that I didn't expect. What felt stable and [00:00:45] familiar suddenly wasn't. And that's a bit like what happens when you try to compare. Retail media across different markets. From a distance, it looks like the same vehicle, but the weight is [00:01:00] distributed completely differently. [00:01:01] Different regulations, different retail structures, different org charts, different histories, and that changes how the whole thing handles. Now, this came up recently when I joined Adam [00:01:15] Smith, the head of retail media at UK Retailer Iceland, and. We spoke together on the FMCG Guys podcast with Daniel Torres Dwyer. [00:01:26] It was a great conversation where we talked about retail media in the [00:01:30] stores, US versus the uk, ethical dilemmas in retail media. And in this snippet of the conversation we're gonna get into why US and European retail media evolved so differently and whether the comparisons people keep making [00:01:45] actually hold up. [00:01:46] Daniel: Adam, you're in the uk. What are like right now the key differences between the retail media and one market and either side of the Atlantic? [00:01:57] Adam: Do you want, um, do you want me to have a crack at that? [00:02:00] I think, look, when I, my experience is that it's just scale, isn't it? For the US it's just hard. You know, you've got print media in the US it's just really, really difficult to do. Um, so, you know, with the rollout of digital in store, it all becomes [00:02:15] very, very possible, very, very quickly. [00:02:17] I think we're going through this sort of digital transformation. The UK is happening everywhere, just at different. Slightly different setups, but there's loads of, [00:02:30] there's loads of examples of it either being done. Actually, to be fair, there's more examples of it being done badly at the moment than there is of it being done well, but it's, it's a real challenge how we face into it because, you know, having, having connected products.[00:02:45] [00:02:47] Exactly the right time. Screens move. Shops aren't, you know, shops aren't completely fixed in place all the time. It is. It is tough, but screens are going up everywhere it is happening. We we're just, the [00:03:00] whole industry are just learning how to do it well. [00:03:03] Kiri: Yeah. I, this is a, this is an interesting topic because I just had, um, by the time this goes out, it would be posted to the, uh, my column at the drum talking about exactly this topic about why, you know, there's, there's [00:03:15] some structural reasons why things work a little bit differently in the us. [00:03:20] one of, one of them is, is what Adam mentioned, which is the geographic density. So there is, you know, the US is sort of a, you know, huge land mass populated [00:03:30] sort of differently, more of a sparse locations. [00:03:32] Um. Sparse population broken out of in, in many cities. And the, the, just the physical sort of footprint of retail is strip malls, suburbs. It's not as [00:03:45] compact as some, some, um, other markets. And so that means that this, um. This, you know, the, the store footprint looks different. And so the in-store retail media I think is an interesting, um, [00:04:00] aspect of that because the deployment of screens are a bit more challenging given the sort of scope of it. [00:04:07] So that's one area. Um, another is data regulation and GDR specifically, that [00:04:15] means that off. Is much more of a thing in the US than it is outside because we don't, we have like more lax, uh, privacy policies. So that is, you know, for better or worse, that is much more of a [00:04:30] thing. Um, the scale and fragmentation are very different. [00:04:33] Amazon and Walmart collectively own 85% of the US retail media spending. The fourth one is e-commerce penetration created more [00:04:45] of a. Focus and interest in, uh, sponsored product ads and onsite. And then finally, there is this really interesting law in the US called the Robinson Patman Act. This is a really [00:05:00] arcane law that hasn't really been litigated very much. And so companies have their own interpretation of how this works. And it's essentially that, um, brands need to use their trade dollars in [00:05:15] ways that don't favor one. [00:05:18] Retailer over another. Right? And so that means there's more of a separation between trade marketing budgets and retail media budgets, and the ways that brands, especially the big, [00:05:30] you know, publicly traded CPG conglomerates and the like, they're very careful about where the, the budgets go as well. So those are five, like structural reasons I think why the US operates a little bit differently [00:05:45] to other markets. [00:05:45] [00:05:47] Kiri: When I published my full analysis of those differences in my column for the drum, and then later republish it on my newsletter, the LinkedIn conversation that followed was one of the most [00:06:00] spirited I've had all year. Brian Denberg. Who is a retail analyst that I always respect, his POV, he filled in a piece that I'd missed [00:06:10] that retailers were receiving media money before they realized that they [00:06:15] were also media platforms themselves. [00:06:18] The US by comparison, had a completely different starting point. It all began at scale with Amazon. [00:06:26] Several of the people jumped in on the comments to [00:06:30] agree with the concept that any one particular market is ahead as being pretty paternalistic. And that the percentage comparisons of spend in different buckets from one market to another, [00:06:45] mostly reveal different starting points, not who is winning. [00:06:49] And I certainly agree with that. Miracle Ads is the only retail media [00:07:00] solution designed for both one P and three P Marketplace brands. Why does that matter? Marketplace sellers demand a seamless advertiser experience that still offers full funnel ad formats, and [00:07:15] retailers need a flexible solution that allows you to scale your media business. [00:07:19] Kiri Masters: Learn more@miracle.com. That's M-I-R-A-K l.com. [00:07:27] [00:07:28] Kiri: One thing that came up in the [00:07:30] conversation with Adam Smith on the FMCG guys podcast is about. [00:07:35] Who actually manages these in-store displays, and and I think it is actually a pretty important piece of the puzzle to understand. [00:07:42] I think also just the origin of what, [00:07:45] you know, what we call trade marketing, what we call shopper marketing. This is maybe a little bit different. I understand that. Um, perhaps, perhaps it's in, in the uk you can correct me, Adam, but even the, you know, the setup of in-store [00:08:00] displays is funded differently in the US It's actually the. [00:08:03] The brand that's responsible to come in and set up and manage those displays rather than the retailer? Is that something that you're familiar with? Um, [00:08:14] Adam: it's a, it's [00:08:15] a bit of both. And a, a brand might come in physical displays or digital? [00:08:20] Kiri: Physical. [00:08:21] Adam: Physical, mostly shop led. It certainly in larger stores where there's opportunity to do some bigger off [00:08:30] shelf activity, a brand might come in and support, but in most cases, brands have some field teams, but 95% of cases are all, all retail led. [00:08:42] So yeah, I mean it, yeah, we, I mean, it would be [00:08:45] great if they would come in and help us and do that for free, but, um, no, it's, you know, unless there's a massive sort of opportunity to display something off shelf, those teams just aren't out there. [00:08:54] Daniel: And, and I have another question regarding what you said about offsite retail media, [00:09:00] which you can do more with it in the US because in the U Europe you have GDPR. [00:09:04] Like does that mean like you can do like more like retargeting of people? Yes. 'cause you have more information. Okay. [00:09:11] Kiri: Yes, exactly. Mm-hmm. [00:09:13] Daniel: Yeah. So I get from what you're [00:09:15] saying, like the US has the benefit of scale and a bit more. Legislation when it comes to like targeting people. But then from what Adam said, and you kind of pointed to as well, if you're gonna do like in store, [00:09:30] it's harder to roll out, for example. [00:09:32] Kiri: Yeah, absolutely. And and that's why I find some comparisons between the. Shape of retail media in D different markets, like how much has spent on in store versus on [00:09:45] site and et cetera. I find those comparisons can be a little bit crude because there are all these reasons why retail media has evolved the way that it has in the us. [00:09:56] It's because there's more e-com penetration. It's because like [00:10:00] these other sort of formats of retail media are easier to set up and in store has typically been a little harder because of. Very real geographical constraints. So I find it interesting to dig into these differences because I don't think, like I, I [00:10:15] think it gets positioned sometimes as of the US is behind on in-store and I don't think that is. [00:10:23] It's not that people had no idea that that existed or whatever. It's um, just a function [00:10:30] of like the e you know, it was a different evolution, um, of the, of, of, of retail media here. [00:10:38] Adam: It's quite interesting when you consider the amount of advertising that's everywhere else, just not in the shops [00:10:45] themselves. [00:10:45] Like, you know, it's actually quite stark the amount of. Isn't that much in your face points out in any of the shops that I was in, uh, when I was across. And, um, when you consider that you step out the shop and there's [00:11:00] just advertising, [00:11:01] Kiri: oh, it's everywhere. [00:11:02] Daniel: I find it funny how sometimes I see people being very, like adamant, passionate. [00:11:09] Very passionate about saying, oh, retail media's been there forever. And then some people say retail media is new. So [00:11:15] I'm a bit, as somebody that's not an [00:11:16] Kiri: expert, [00:11:18] Daniel: I get confused. [00:11:19] Kiri: Yes. [00:11:21] Adam: I mean, we've been advertising food forever. [00:11:23] [00:11:25] Kiri: So just wrapping things up here, the reality is different markets evolved [00:11:30] under legitimately different conditions. Some of those differences are hard structural barriers. Others are organizational choices That calcified into, that's just how we do it here. [00:11:43] One thing's for sure though. [00:11:45] We can all learn a lot from each other. We are not at fixed points. There is not a fixed destination to get to, but because of these different approaches, we have a lot to learn from each other. [00:11:59] And [00:12:00] that's why these conversations can be so impactful. Definitely suggest that you check out the full episode of the FMCG Guys podcast. We'll link up to her in the show notes and my full post about the differences between the US and other [00:12:15] retail media markets. [00:12:16] Thanks for listening, and I'll catch you tomorrow. [00:12:18]