dentsu

commerce

By: Steven Nestor, VP, Retail and Commerce Solutions, dentsu

In today's fast-paced digital landscape, consumers demand seamless and engaging shopping experiences. To stay competitive, retailers and brands must adapt to this new reality by capitalizing on every opportunity to connect with customers.  To help brands keep up with this changing landscape, in 2023 we launched dentsu shop, our retail innovation accelerator that orchestrates varying disciplines to help our clients address what’s next in retail and shopping. Through this endeavor, we have affirmed that retailers and brands need to adjust to the circumstance that consumers no longer go shopping – because they are always shopping. Commerce transformation has made the ability to spontaneously move from inspiration to transaction so simple that consumers expect the ability to buy at any moment.

To keep up with their customer, retailers and brands must prioritize maximizing the outcomes of every shoppable moment which, in most cases, means creating the ability to convert wherever possible.

Defining Shoppable Media

 Shoppable media is an ad product that allows users to complete a purchase without tapping (or clicking) through to a separate experience or domain. For example:

  • Social Commerce: Platforms like TikTok and Instagram have integrated shoppable features, allowing users to purchase products directly from posts and videos. This enables brands to leverage the influence of social media influencers and tap into the power of user-generated content.
  • Connected TV: Streaming services like Roku integrating with Walmart Connect that enables brands to serve shoppable ads during TV shows and movies.
  • Dynamic Display Ads: These ads use real-time data to tailor product recommendations and pricing to individual users, increasing the likelihood of conversions. By leveraging advanced targeting and personalization techniques, brands can deliver highly relevant and engaging ad experiences
  • Virtual Experiences: Immersive virtual worlds like Roblox offer opportunities for brands to create shoppable experiences within games and virtual environments. By immersing customers in a branded experience, brands can foster deeper connections and drive brand loyalty.

The Case for Shoppable Ads

For too long, brand differentiation and creative inspiration have been separated from ecommerce transaction. The growing ability to meet shoppers in different moments of the shopper journey with engaging media that supports conversion is giving brands the ability to nearly eliminate the distance between shopping and buying in paid channels.

While the ecosystem for shoppable ad products is expanding, it certainly isn’t ubiquitous. However, the rise of social commerce is a fair signal for what we can more widely expect for shoppable media. In the US, retail social commerce sales will surpass $100B in 2025, marking a 22.4% rise over 2024. Furthermore, 42% of all internet users will have become social commerce buyers by end of 2024. The reason? Social networks and brands are realizing the performance benefits of pairing of creativity and convenience.

Key Considerations

While shoppable media presents a promising future for all brands and retailers in ecommerce, it's important to consider its strategic fit for your business.

1. Existing Direct-to-Consumer (DTC) Capabilities:

  • Foundation for Success: Brands with existing DTC capabilities are far more prepared when adopting shoppable media. They possess the necessary infrastructure, logistics, and customer service capabilities to handle increased direct sales.  
  • Seamless Integration: Existing DTC platforms can be integrated with shoppable media platforms, streamlining the customer journey and minimizing friction.

2. Product Consideration Level:

  • Low-Consideration Products: Brands selling low-consideration products, such as apparel, accessories, or beauty products, are well-suited for shoppable media. These products often involve impulse purchases or quick decision-making, making them ideal for the immediate gratification offered by shoppable formats.
  • High-Consideration Products: Brands selling high-consideration products, such as furniture, electronics, or luxury goods, may face challenges with shoppable media. These products often require extensive research and deliberation before purchase. While shoppable media can generate initial interest, it may not be sufficient to drive conversions for such products.

3. Product Margins:

  • Profitability Considerations: Low-margin products may not be ideal for shoppable media due to the additional fees charged by platforms for facilitating transactions. These fees can erode profit margins, making it difficult to justify the use of shoppable media for such products.
  • High-Margin Products: Brands with high-margin products, such as luxury goods or premium brands, can better absorb the additional fees associated with shoppable media. These products often have higher profit margins, allowing brands to invest in shoppable media to drive sales and brand awareness.

By carefully considering these factors, brands can effectively leverage shoppable media to enhance their ecommerce strategy and drive growth.

Determining The Benefits for Your Brand

Many brands are determining whether shoppable media is something they should begin prioritizing for investment, and our team at dentsu shop is helping them navigate it. Reach out to consult with one of our strategists assisting brands to create, connect, and maximize every shoppable moment.