Lawrence Taylor

CEO & Founder, Retail 4 Brands

Pearl Lieberman

VP Marketing

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I spent 20 years in digital, which makes me a veteran. I started my career in performance marketing. Then I spent 12 years within the Havas group handling international clients and helping them in their first digital transformation: Air France – KLM, Accor, Hermes, LVMH, … And then I spent six more years setting up the new digital practices within the Havas Group and creating a network of agency specializing in programmatic, social, search, out of home, … I then realized there was something new happening, and Amazon was really going to change the game, and change the way brands interact with consumers. By being able to have direct access to those consumers and being in the capacity to read the return on investment for any kind of digital activation that they are running.
To do that you needed to create a boutique in which you needed to have consultants, people working on content and advertising, and you needed data to generate insights, to generate actions and to generate value. And that’s the essence of why I created Retail 4 Brands now two and a half years ago.
The role of Retail 4 Brands is to help brands understand what the operating model should be when it comes to retail marketing in general: what kind of products they should sell and how they should sell it, what kind of content they should have. And once all that is done: how they can accelerate growth, leveraging advertising on Amazon, but also outside of Amazon. Why do we have a focus on Amazon? Because it’s basically where you can go as far as possible in terms of value creation. That’s where you get the most lever in terms of activation.

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Retail media shows that there is this activation, but it's really the tip of the iceberg

What are the best practices retailers who are interested in launching their retail media network can adopt to create sustainable value for the brands ?

Retail media is just one of the ways to activate a brand presence on digital retail. You still need to work on the content. You need to work on the product. You need to work on all that. And what Amazon has done is to show that there is value in that, and that has created a reference point for brands in that they’re changing the operating system as a whole. So retail media shows that there is this activation, but it’s really the tip of the iceberg. There’s so many other things that you need to do. For all the reasons that we said: you can identify exactly what type of products consumers are after. So you really have the pulse on the consumer, much more than you would have in a traditional environment. You can optimize your content and then you can activate that retail media once you’ve done all the previous stages in the right way.

What are the organizational teams that you work with on the brands side?

Our job is really to help brands create that operating model to activate digital advertising. So we work with the people within the organization that are going to be in charge of this retail activation: e-commerce and marketing. The companies that leverage the retail marketing opportunity to its best potential, are those that can bridge the gap between traditional e-commerce teams and marketing teams. And that’s where we come in. Sometimes we’ve just had to bridge that gap. And once it’s done all our job is done.

What would need to happen for the media activation to be a success?

There are five steps to success. The first is organizational: having the right people, the right technology, and KPIs. The second is a question of the way you distribute your product, and the logistics. Amazon is a very peculiar way of working in terms of logistics. But also, when you’re activating a retail marketing, if you think of the French example of “drive”, you need to make sure that your distribution is adapted to a national coverage. Then there’s the type of products that you want to sell so basically all the category management that you need to do in terms of product positioning, pricing and promotion. So that’s the third step, then there’s everything that has to do with content visuals or the SEO part. And then there’s the advertising. These are the five steps that you need to master, and that’s why the media part is really the last step of the of that rocket ship.

What are the main metrics to validate the success of the media activations?

The two key metrics are going to be your sell-in and your sell-out. How much of an impact does your retail media activation have on your sell-out, and how does that help to increase your sell-in? Because at the end of the day, that’s what people are after, they’re after revenue. And then you’re going to have secondary performance indicators which will have to do with the revenue that you’re generating, the level of margin that you’re generating, but also the value that you’re creating. We like to measure TACoS, which is your total revenue compared to your advertising costs. It is important and quite different from a direct ROAS because, contrary to the Google environment, on Amazon in particular, but also in other retail market places, what you are generating in terms of sponsored sales, has a positive impact on your authentic sales. So you really want to look at everything that you’re generating and not just the advertising sale.

Do you also include the physical sales?

Not for the moment. That’s going to be one of the challenges that retailers are experiencing. I think that it’s a new world out there. And as you mentioned when talking about “organizations”, there’s not a lot of job specs out there focusing on media: so head of marketplaces, or head of digital retail, that’s a new job. And the same thing is true for measurements. But you’re very right, at one point or another, if you are TESCO or Carrefour, you really want to show how much revenue you’re generating for brands online, but that’s a small percentage of your revenue. So you really want to see how much that is impacting your offline sales as well.

And I think in the future, you are not going to have an online sales and offline sales, but a single point of sale, which is not going to be the shopping mall or the website. That’s going to be the, the shopper in itself. And that’s a massive change that we’re seeing for brands in the future, whereas “shopper marketing”, which was really isolated within your point of sale is going to be across the full customer journey. So we’re really going to enter new age of customer journey of shopper marketing, which is going to be applied at each step of the funnel: from your sofa watching TV, to the actual experience of the product itself. So after the actual purchase of the product.

A lot of the conversations we have focus on how to show the sales that are "digitally influenced". What best practice would you share with retailers to show value to their brand partners?

I think in terms of value and in terms of the impact that it’s going to have on the bottom line you’ve seen the article from the Boston Consulting Group that states that retail media is a $100 bn opportunity. A third of that is captured by Amazon as it is, but it will only grow, and COVID has had a real booster effect on those sales. I’d say that retailers need to set a new value proposition. And in that light, Amazon is helping quite a lot because it’s setting the blueprints of the expectations in terms of brand. They want transparency, they want return on investment, and they want to have access to data. So that really needs to be part of your blueprint. You really need to have those three elements because that’s what brands are getting from Amazon.

And all the other retailers are jumping on that boat: Walmart in the US, Tesco or Ocado in the UK, Carrefour in France or Leclerc… So any market really is seeing the same. The reason why I’m talking about the US and the UK is that for grocery they’re the most advanced market in terms of e-commerce. I’m putting China on the side because it’s such a complicated market, but for Germany, Italy, Spain, grocery e-commerce shopping is still in its infancy.

Do you see a divide in the access to owned and social media?

At first you really need to be super robust on your own channel, make sure that you’re answering the expectations of your brand partners. Once you’ve done that you can work on your external channels, your offsite, leveraging data. So you need to make sure that you’re able to use your consumers data. What Apple is doing is creating complexity to join this data, to offline activity. But it’s super important that once you’ve established a baseline onsite for those retailers, and that it’s driving value and it’s driving return on investment, then you start working upwards on the customer journey and that’s when external traffic becomes really interesting.

Is retail media for all retailers?

It’s really a go big or go niche kind of approach that you need to take middle of the road is not going to work. Brands are not going to be on every single website. So you really need to think: “Am I able to be big enough?” or “I’m not niche enough” to be important within this category. So imagine you’re in DIY, you want to have the top sites for DIY. If you’re doing exclusive coffee makers, those coffee makers have specialized websites, and that’s where brands really want to be in. If you’re middle of the road, it will be hard to keep the promise that you can generate 10% of additional revenue. The reason being is if you are Mondelez, and you’re already operating on 10 sites, maybe you don’t have time to operate on the 11th or 12th sites. On the other hand, if you are an important part of the retail mix, then you can pretend to be an important part of the media mix.

A lot of the retailers we work are in the middle of the curve. And for them it's really about leveraging their data collaboratively with the brands the way they've always done, and apply it also to external channels.

I think for those retailers need to unite, in terms of their forces so that they have an offer, which is big enough to be interesting for brands to activate on those platforms. And together they will be stronger than being isolated.

What was your first campaign and do you remember it?

60, 70% of what we do is successful. 20% is not very successful. And very often we’ve warned ahead because it’s not the right product. They haven’t fitted all those steps in the rocket ship that we mentioned. 10% are super successful and we are even more surprised of the success than we could imagine.

We started to activate, and reshuffled the content, improved the content, improved what type of products we were selling and that started to generate growth. And we multiplied the revenue of the brand by x10 in about three to six months. And to be perfectly honest, at first, the client was eager to launch everything but gave us the go ahead, mid/beginning of December, which is the worst period. You can imagine if you want us to be ready for Christmas, it’s too late already.

So the retail media part of the activation, the first one that we did not go well at all. It was one of the first times that you gave us 10,000 euros to spend, we’re going to stop because we’re not creating value at the moment. Let’s come back in a couple of months when we’ve cleaned up some of the things and we’ve improved the value proposition of the brand, and we’ll be able to generate more revenue, which we did in the end. So it was a success because we identified that if we went further, it would it could be a failure all together.

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