What's Happening?
Andrew Lederman, the global VP of digital commerce at Mondelez International, has expressed concerns about the current capabilities of retail media networks in brand building. Speaking at The Drum Awards for Commerce Media in Miami, Lederman emphasized
that while retail media is effective, it cannot independently build a brand. He highlighted the need for improved measurement and incrementality to justify brand budget allocations. Mondelez, which owns brands like Oreo and Cadbury, seeks to understand if their marketing dollars are driving incremental sales across all retailers, not just within individual platforms. Lederman pointed out the tension between merchandising teams and retail media networks, which often operate in silos, and stressed the importance of a more integrated approach to drive sales effectively.
Why It's Important?
The insights shared by Lederman are significant as they reflect the broader challenges faced by consumer goods companies in navigating the evolving landscape of digital commerce. Retail media networks are increasingly seen as crucial for reaching consumers, but their effectiveness in brand building remains under scrutiny. Mondelez's focus on measurement and consumer-centric strategies underscores the need for more sophisticated and holistic approaches in digital marketing. This situation highlights the ongoing power dynamics between brands and retailers, where brands control the budget but retailers have access to consumer traffic. The outcome of these dynamics could influence how marketing budgets are allocated and how brands engage with consumers in the digital age.
What's Next?
Looking forward, Lederman anticipates the rise of agent-driven commerce and social commerce as key trends shaping the future of retail media. The integration of commerce capabilities within social platforms like TikTok is expected to grow rapidly. Additionally, the industry will need to address the unresolved issue of measurement to connect sales directly to commerce media efforts. As more networks enter the market, competition for brand budgets will intensify, necessitating clearer proof of value from retail media networks. The industry will likely see a push towards more collaborative efforts between merchandising teams and retail media networks to optimize sales strategies.
