Fix/Lite - Merchant Deep Dive

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Free Insider /Merchant - December 2
So much is happening with Merchant so I am sharing todays Deep Dive with all Fix readers. If you find it interesting you can upgrade and get the Deep Dives on Merchant and newTV and get Fix first thing Fridays. It costs less each week than a Pret coffee and many people expense it.

First some news on another of my projects; For the last year Anthony and I have been calling out good creative on TikTok in our weekly GTTC email.

Why? Because people who pioneer innovative work, on this most exciting new platform, deserve praise. And if we celebrate good work, we hope it will inspire others to up their game.

To take this to the next level we are delighted to announce the first GTTC awards - where great work is recognised. We have convened a stellar set of judges and plan to award winners with a GTTC NFT which we are commissioning

Learn more on our Awards site and please share with those in your network who have been active on TikTok. And let us know if you have any questions or thoughts

Merchant Media

The relentless rise of Merchant Media comes from a unique set of circumstances.

The pandemic saw a shift to online grocery shopping, decimating margins which impacted profitability of this huge business.

But part and parcel of online shopping is customers need to spend time online doing their orders. The consequent ad inventory - charged through with intent - is really valuable.

And CPG firms, looking for ways to get closer to their customers and reeling from the demise of cookies, were looking for ways of harvesting 1st party data.

So ad revenue - diverted from Google and Facebook - funds the costs of grocery delivery - whilst also increasing basket size. The retailer and the brands share their knowledge to sell more of their product and better serve the customer, who is happier with their purchases and more likely to come back.

As one of my Modem Media colleagues used to say; Advertising so good, it's a service.

Much of the focus on Merchant Media is driven by US activity, but we see it as a global opportunity. For example LatAm giant Mercado Libre is active too.

This week we saw a significant step forward in the UK with the launch of the Tesco Media and Insight Platform. The scale of the launch event on Tuesday demonstrated this is a big deal for Tesco and for Dunn Humby. The launch was well attended - I was one of 100 plus at Milbank (and apparently 500+ joined on Zoom) - and senior execs from Tesco and Dunn Humby talked through the new offering - after a great scene setting talk from Fix friend Colin Lewis.

The new offering is rich with opportunity - the site has lots of detail and the coverage from the Drum is a decent summary.

The big question is who is going to seize this opportunity? Brand teams at CPG firms whose colleagues already deal with Tesco on listings, BOGOFs and Gondola Ends? Will they ‘outsource’ this to their Agencies? Do Agencies have the experience and expertise to make the most of this opportunity? With Google search, facebook social and Amazon ads, new players have emerged to manage these specialist areas. Is there an opening for something like Facebook Marketing Partners to work with brands to unlock this new marketing channel? Keen to explore this area, so do get in touch with your thoughts.

And a new study from the IAB shows the rise of retail media in Europe. Hat tip Giulio

Stores

Checkout free stores have gone from a headline to the high street really quickly. Holborn now has 3 within a few yards of each other. The first was Amazon - who now have 7 in London (Canary Wharf; Chalk Farm; Dalston; Ealing; Wembley Park; White City) and then Tesco opened theirs, which uses tech from Trigo - an Israeli company Tesco have invested in. Now Sainsbury have opened one - using the Amazon technology.

This is the first non Amazon supermarket using the tech to open anywhere in the world, and importantly, the tech was installed in an existing store. The Amazon site selling the tech features the Hudson airport stores in the US and some other customers. They don’t mention  Starbucks which is also trying out the Amazon tech.

This is clearly a trend and Aldi plan to open their first checkout free store in Greenwich. That is rumoured to have cost £1.8m, which is a lot more than the Amazon tech. Insider says Amazon has slashed the cost of its Go cashierless store technology by 96%.

The FT have a good summary of this space and mention a couple of other tech firms and say this about the reasons for the interest;

Retailers play down the idea that experimental checkout-free stores are an exercise in cost-cutting, pointing to the heavy fit-out costs and the number of staff that still patrol the aisles helping customers with the technology or verifying age limits for purchases of alcohol and pharmaceuticals.

But in an industry that employs millions of hourly-paid staff and has been heavily affected by minimum-wage legislation, the longer-term attractions of being able to run stores with fewer people are obvious.

The self checkout has taken off due to this logic but we all now fear hearing Unexpected item in the bagging area. The Wall Street Journal has some ideas how to fix this.

A Fix friend shares this video on the Supermarket of the Future - all about AR

E-Commerce Needs Real Store Locations Now More Than Ever

CVS store closures: To shut about 300 stores a year over next three years

Fast Last Mile

Hearing more and more stories of how cabs no longer work well in London - long waits, surge pricing, drivers repeatedly cancelling. Does the distortion caused by short/ medium term VC subsidies disrupt a business over the long term? Is that going to happen in Fast Last Mile too?

We see that in Germany Gorilla drivers are talking industrial action and in the US the spike in fuel prices is causing issues for lots of gig economy businesses. Should we recognise that someone like Tesco is best placed to manage the logistics of picking, packing and putting kids on bikes? They tripled their capacity in grocery home delivery over the pandemic and their moves in Merchant Media keep them closer to the brands.

Plus+

Insider Intelligence - who are the source of the opening graph have a new survey to better understand the Merchant Media market - see this LI post - and all those who participate get a copy of the results.

“Ecommerce is mostly marketplaces”: Colin Lewis on how brands can seize the marketplace opportunity?

Digitally native brands: Born digital, but ready to take on the world - McKinsey

Retail experts speculate on Shopify's move into advertising and how it could shake up the competition with Amazon

Podcast; Retail guru and  Former Gap / JCrew CEO Mickey Drexler

Grocery delivery just got more sustainable with Amazon

Cannuka Luxe And Neiman Marcus Are Making Shoppable CTV Advertising A Reality

Our friends at Responsive Ads worked with NBC Universal and Paypal on shoppable ads and increased Click-to-Buy by 10X -  read the white paper

Presenting... the Future of Retail 2042 conference with PSFK

Dark stores light up red-hot grocery delivery market - China

Grocery OS by Farmstead. 2-hr free delivery for your grocery chain. - software to help you go Fast Last Mile

Online grocery sales more than double in 2020

How Direct-to-Consumer Brands Can Continue to Grow - HBR

Record Number of Robots Sold to Help Fill Jobs

Introducing DoorDash Labs: DoorDash's Robotics and Automation Arm

Beauty social commerce: The new names to watch - Vogue Business

Giant companies are launching their own direct-to-consumer lookalikes. Will consumers buy in?

Ghost Kitchens Are Proving to Be a Messy Business, as Reef Global Shows

JioMart Shopping on WhatsApp

Scott Galloway comes out against Buy Now Pay Later

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