“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Corbin de Rubertis, head of innovation at Meredith Corp.
Retailers once operated as walled gardens and were deeply unwilling to share their data. But a shift in marketplace conditions and their own priorities has caused retailers to now view data integrations with publishing partners as a competitive advantage.
A decade ago, retailers fixated on the possibility that sharing real-time pricing data with publishers would lead to comparison shopping and lost sales. But that concern abated as retailers began exposing pricing information on their own sites, creating a cottage industry of third-party aggregators to monitor price fluctuations.
Retailers were also once laser-focused on margins, but they are now more concerned with customer “lock-in” and repeat business. This new focus has deepened during the COVID-19 pandemic, as shoppers migrated online to purchase everything from groceries to exercise equipment from fewer retailers to streamline deliveries. A big-box store such as Walmart or Target knows people will come to buy certain “value” items, for example, and wants to get them buying across multiple categories.
Increasing loyalty and basket size is the name of the game and can be achieved by letting publishers integrate real-time pricing and availability information directly into native content. New click-to-cart capabilities let customers complete nearly the entire path to purchase within a display ad, article or video. That requires a much greater openness with data.
The interplay between content and commerce has grown more sophisticated over the past decade, bringing retailers and publishers much closer together. In the days of affiliate marketing, only a single product could be offered through a single link. Then a crop of shopping cart vendors that integrated with retailers on the back end emerged, letting publishers promote multiple items at a time while sparing them the hassle of tech integrations.
This was a big step forward, but it was also a black box: Publishers didn’t know what people clicked on within the cart experience or what they ended up purchasing. It was difficult to close the loop and impossible to optimize for intent. Now we have entered a new age in which large retailers are building their own APIs, enabling publishers to promote thousands of SKUs based on each shopper’s intent.
When implemented thoughtfully, real-time data integrations can result in powerful full-funnel marketing activations, often within a single ad unit. Retailers have long relied on publishers for storytelling; editorial teams are better equipped to explain the benefits of organic produce or hormone-free meat, for example, than in-store shopping marketing programs. Now, via a pipeline of real-time data, publishers can also inform customers about pricing, availability and options for delivery or pickup. Take, for instance, a campaign from a CPG or large retailer that invites home cooks to plan their holiday meals within an interactive ad unit and then click to add all the necessary ingredients, decorations and gifts in a single cart.
For retailers, the rise of real-time data integrations brings them one step closer to realizing the dream of closed-loop attribution, since more data about what people browse and buy will be readily available. With native data integrations, there are no more black boxes.
For publishers, the benefit of these integrations is both monetary and philosophical: It increases business with retailers while expanding the service provided to users. With real-time integrations, content can be more personalized and relevant, driving deeper engagement and better outcomes for marketers.
The downside for publishers is the required investment in labor, time and technology. Publishers need to integrate with a variety of retailers, whose APIs often vary significantly, and must perform ongoing maintenance, which are both costly uses of engineering resources. And although initial click-to-cart integration can take months to establish, integrating retailer data across multiple touchpoints to make articles, videos, social posts and other content types “shoppable” can take much longer.
The phenomenon of large retailers investing heavily in APIs to share pricing and availability data externally is a paradigm shift, but the genie is out of the bottle and there’s no going back. Smaller D2C retailers built on Shopify will be able to follow suit, leveraging that platform’s APIs to accelerate integration, but mid-tier retailers that don’t have the margins to build APIs may see themselves further squeezed as integrations become table stakes.
We may see a tech “arms race” in which publishers with the most options for retail partners win and ironically begin competing for shopper marketing ad dollars with the in-house media businesses those large retailers have recently launched.