The State of
Ecommerce 2021
Navigating the new world ofomnichannel commerce and retail media
A landmark study by Catalyst and Kantar

1Table of Contents2

Foreword

page 3

Executive Summary

page 4

Key Statspage 5

Insights

page 6

1. Evolving shopper expectations: Prioritize convenience and discovery

page 7

2. Breaking media silos: Eliminate waste and improve
effectiveness across platforms

page 11

3. More than conversion: The power of the product detail page

page 15

4. Going beyond ROAS: Integrate media and KPIs for sustained growth

page 19

5. Open for collaboration: Brands need retailers and retailers need brands

page 22

6. The race to own “The Third Shelf”: The exceptional rise of
online grocery and last mile delivery

page 25

7. The new momentum mindset: Putting progress over perfection

page 28

Recommendations

page 32

Acknowledgements

page 36Foreword“The State of Ecommerce 2021” is a landmark
study by Catalyst and Kantar intended to
inform the marketing efforts of brands andadvertisers across ecommerce and retail
media. The concept was simple: create afoundational study that includes perspectives
from shoppers, marketers, retailers, andpartners that accurately reflects theopportunities and challenges of the industry
going into 2021. We found that there wasno single body of work that pulled together
stakeholders to deliver a holistic view of therapidly evolving ecommerce and retail media
landscape, so we set out to write one of themost comprehensive studies available today.
To achieve this goal, we launched twoquantitative surveys to 500 online purchasers
and 200 industry professionals acrossbrand, shopper marketing, ecommerce, andadvertising specialties. The professional survey
targeted industry leaders holding titles frommanager through executive vice president
who work for, or with, companies that haveannual sales ranging from USD 100 million
to more than USD 10 billion, across morethan 17 categories. Additionally, our report
was informed by nearly two dozen qualitativeinterviews from leading manufacturers
including L’Oréal, Colgate-Palmolive, GeorgiaPacific, Seagate, GSK, and Dorel Juvenile. We
also interviewed investors, technology partners,
and retailers including Google, Amazon
Advertising, Walmart Media Group, Pinterest,
Instacart, CAVU Venture Partners, Salsify,
PromoteIQ, Pacvue, and Kenshoo. Data forboth quantitative surveys was collected in April
2020, and interviews were conducted between
March and May 2020.
The impact of COVID-19 on ecommerce cannot
be denied, and while there is no specific section
dedicated to COVID-19 in this study, it is an
inseparable part of the research, interviews,
and analysis throughout this report.
Thank you for taking the time to read ourstudy. We hope you enjoy it and encourage
you to share it with your colleagues. As always,
please reach out if you have any questions orwould like to share your feedback.

3

Executive
Summary
The ecommerce channel has delivered consistent double-digit year-over-year
growth prior to COVID-19, and Kantar projects 2020 to be the strongest year
yet with +22% growth driven by the massive shift from offline to online. With
this new wave of ecommerce acceleration in 2020 as the backdrop, Catalyst
and Kantar dove deeper to uncover the why and the how behind online shopper
behavior and the industry response.
Our research unveils new, powerful insights that deliver clear calls to action for
winning in ecommerce as we navigate this unprecedented time period. Evolving
shopper behavior illuminates new priorities for online shopping touchpoints,
resets our expectations of shopper convenience over price, and sheds newlight into the growing value of ecommerce ads and social commerce. We
found that leading companies are breaking down silos by connecting retail
media to other platforms for maximum impact throughout the funnel, andit reveals how brands and agencies are planning and spending more acrossdigital ad platforms. Manufacturers continue to lean on their partners fordeeper capabilities around metrics and we share the new skillsets required forecommerce partners moving forward.
While the traditional goal of the product detail page (PDP) remains thesame, to drive conversion, our research also lays out important changes tothe value of the PDP throughout the shopping journey, including increasing
engagement transcending generations and devices. As brands grapple withmeasuring the effectiveness of retail media, many are moving beyond returnon ad spend (ROAS) as the only measure of success and implementing morerobust measurement frameworks that better align with their overall businessobjectives, which allows them to execute unique ecommerce strategies acrossretailers.
COVID-19 has broken autopilot and thrust brands and retailers into deeper
partnerships with each other across data, performance measurement, andshared responsibility for growth. Online grocery and last mile delivery partners,
such as Instacart and Shipt, are commanding new levels of attention andinvestment, resulting in new opportunities for brands in categories outside oftypical food products. All of this acceleration is leading to new standards forexcellence, shifting from a fixed, long-term strategic planning mindset to one
that values progress through continuous momentum, comprised of small steps
and learning initiatives.
Some of the recommendations may seem familiar, as updates to time-tested
ecommerce tactics, while others are meant to prepare brands to execute in
ambiguous and uncomfortable places. One thing is for certain: the skills,
technology, strategy, and tactics developed over the last 12-24 months are nolonger producing the results that they once did. The game has changed andeven the slightest underperforming tactics will have consequences, allowing
competitors and nimble newcomers to take market share from complacentonlookers. Kantar, with our global retail and shopper insights and consulting
capability, and Catalyst, with market-leading search, social, programmatic andretail media marketing capabilities, are here to guide you through these timesof disruption, risk, and opportunity with the actionable insights to excel in thenext wave of ecommerce.

4Key Stats
63% of shoppers who visit
Amazon or Walmart.com visit thesesites for initial product research
37% of all online buyers visit
retailer websites/apps prior to themoment of purchase
66% choose a retailer basedon convenience, while only 47%
choose a retailer based on
price/value

54% of shoppers, who areexposed to advertising, say that ithelps remind them of something
they need, or it prompts an idea forsomething they want

Only 37% of ecommerce
professionals say they are focusedon optimizing their PDPs for SEO
across the online platforms theyuse for digital marketing

56% of ecommerce

professionals are allocating funds
to data and analytics, making
it the top ecommerce service
budgeted for

63% of Instacart users plan to
use the service more in the future
44% of ecommerce
professionals say theircompany is selling 3P

59% of online purchasers areaware of social commerce
72% of ecommerce professionals
use Facebook for digital marketing
activities

Two-thirds of brands

investing in Amazon Advertisingor Walmart Media Group haveincreased their investments

56% of agency professionals

say that they expect more RFPs inecommerce and retail media in 2020

49% of online purchasers scroll
past page 1 to look for what
they want5

Insights

6

1. Evolving shopper
expectations
Prioritize convenienceand discovery
Today’s shopper journey is broader thanever. Not only do consumers shop a range ofretailer sites, they also shop using traditional
search engines and social media platforms.
Furthermore, they use these platforms fora variety of activities during their crosschannel shopping journey. Among those who
visited these specific sites, 50% searched for
inspiration on Instagram, 50% discovered new
products or brands on Google, 63% did theirinitial product research on Amazon, and 63%
compared products or prices on Walmart.com.
While shoppers tend to use social media
platforms more for inspiration and discovery,
retailers and traditional search engines still play
an important role in these shopping activities.
While shoppers visit retailer sites more forresearch and product/price comparisons,they also use search and social sites for thesame activities. Cross-platform shoppingis the hallmark of today’s online purchaser,
cementing the importance of integrating retail,search, and social strategies.

7

Figure 1. Consumer shopper journey across leading sites
Search for inspiration

60%

48%
62%

63%

60%

55%

39%

38%

Discover new products / brands

63%

39%

33%

34%

51%

45%

48%

63%
51%
30%

Amazon.com Target.com Walmart.com

Initial product research

43%
53%

Product/ price comparisons

34%

37%

46%

44%

54%

55%

64%

62%

46%

50%

49%

35%

44%

44%

Twitter

Instagram

YouTubeGoogleYahoo

Facebook

54%

50%

36%
57%
52%
26%
Costco.com

Read as: 63% of shoppers who visited Amazon in the days leading up to a purchase did so for initial product research.
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 2020

Retailer Sites and Apps: Critical Steps on the Path to Purchase
Shoppers rely on retailer sites and apps more than any other touchpoint in the days and weeks leading up toa purchase. When we consider the ecommerce consumer’s path to purchase, most online purchasers are, notsurprisingly, influenced primarily by online touchpoints; however, nearly one-third say that offline touchpoints
helped them make their purchase decision, further highlighting the importance of omnichannel approaches. “Theretailers who will thrive after all of this will continue to blend seamless online and offline flow,” said Joniece Hinds,senior manager for integrated media at Georgia-Pacific. Stephen Howard-Sarin, vice president of strategy anddevelopment, Walmart Media Group, sees similar value in connecting online and offline experiences saying “Thelandscape until now has focused on delivering ads based almost solely on online insights. While online is a criticalarea for retail, and Walmart is constantly looking for ways to create trusted customer-centric online experiences, thereality is that in-store sales data is a key piece brands can’t afford to miss.”
Online shoppers who ultimately purchased were more likely to visit retailer websites/apps (37%) than any othertouchpoint while shopping. Internet search ranked second with 28% of online purchasers using it during the
shopping process.
Figure 2. Online purchasers’ pre-shop touchpoints
Pre-shop touchpoints
40%

Online 66%

37%

35%

% Engaged in Touchpoint

30%

Offline 31%

28%

25%

21%

20%

20%

20%

18%

17%

17%

Offline Ad

Recommendation

13%

15%
10%
5%
0%

Retailer website / Internet Search
app

Email Ad

Brand website / Social Media Post
app
/ Ad

Blog / Online
forum

Read as: Among all online purchasers, 37% visited a retailer website/app in the days or weeks leading up to a purchase.
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 20208

In-storeAmong those who went to a retailer website/app, nearly half (48%) indicatedthey did so first, and for those that did an internet search, 46% did so first. This
reinforces the importance of these touchpoints as critical first stops along the
shopping journey, a key insight for brands to consider when they want to engage
the shopper early in the decision-making process.
Figure 3. Order of pre-shop touchpoints
1st

2nd

3rd

Not Ordered

Saw email ad

51%

17%

Went to a retailer website / app

48%

20%

13%

19%

Did an internet search

46%

21%

14%

19%

Saw social media post or ad

45%

16%

32%

Went into a store before buying

14%

6%

27%

10%

29%

18%

36%

Got a recommendation

26%

22%

7%

45%

Saw offline advertisement

26%

22%

9%

43%

Went to a brand website / app

26%

Went to a blog or online forum

16%

30%
9%

11%

13%

33%
63%

Read as: Among those who went to a retailer website/app in the days before purchase, 48% did so first.
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 2020

Shoppers Value Convenience Over Price
66% of online purchasers say thatconvenience is the main reason theychoose to purchase at a specific retailer,
while only 47% say price/value is the main
reason. Ahead of price, consumers also
value assortment (52%) and shoppability(57%), an important call to action for brands
considering new online product assortment
strategies as well as ensuring that theirproducts are shoppable across the growing
long tail of online retailers.

Figure 4. Main reason for choosing a retailer
for product purchase
Service

Price/Value

66%

Assortment

Shoppability

Convenience

36%

47%

57%

52%

Read as: 66% of online purchasers say convenience is the main reason they choose to purchase ata specific retailer.
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 20209

Shoppers Finding Digital Ads Helpful

Social Commerce Gaining Momentum

To better understand the value of online
advertising from the shopper perspective,
we asked about the utility and helpfulness of
media designed to target and drive purchase.
The results illuminated some key insights,
including that 54% of those exposed to an
ad or promo while shopping said that theseads or promos were helpful reminders ofsomething they needed, or prompted an idea
for something they wanted. As a group, 20% of
total online purchasers said that advertising is
helpful to them while shopping.

We aspired to learn more about the strong
engagement that shoppers have with social
media and how this translates into social
commerce. We asked shoppers about theirawareness and willingness to purchaseproducts through social media.

Ryan Mayward, Amazon’s global head ofagency development, also suggests thatbeyond just being helpful, ecommerce andonline shopping give shoppers a sense ofenjoyment or pleasure. “Historically, youthought of Amazon as a place where you could
come to quickly find what you were looking for,place your order, and move on with your day. It
was largely oriented around product shoppingand discovery. But we are seeing customers
increasingly use Amazon to discover new
brands and we are seeing brands use Amazon
as a solution to deepen engagement withcustomers.” Mayward said.

In our research, 59% of online purchasers areaware of social commerce, and among those
who are aware, 61% are likely to purchasefrom social sites in the future, underscoringsocial commerce’s growth potential. Anotherone of our key findings is that social shoppers
cited the ability to access unique products as
a top reason for purchasing on social media.
As social media platforms continue to gain
influence, brands are taking note: 19% of
industry professionals reported significantly
increasing their budgets for social media ads.

Figure 5. Likelihood of buying from a social commerce site
Very likely

Somewhat likely

15%

Not very likely

Not at all likely

26%

61%

24%

35%

Read as: Among those aware of social commerce, 61% are likely to buy from social sites in
the future.
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 202010

Marketers and agencies are finding new ways tounderstand the value that social platforms canbring to brands: capturing people’s interests,
lifestyles, and activities typically associatedwith the “upper-funnel”. Connecting withthe billions of monthly active and engaged
users is a rich and complex opportunity that
goes beyond simply including a “Buy It Now”
button on your post. Kieley Taylor, global vicepresident of social media for GroupM Services,
says their huge scale and rich intent data
make social platforms well suited for full-funnel
marketing campaigns. “As the platforms
continue to innovate on driving direct site traffic,
collaboration with traditional retailers, and onplatform purchase, their value to advertisers
continues to grow,” she said. “Now is the time tothink about how to drive lifetime value, not likes,
with social sites.”

2. Breaking
Media Silos
Eliminate waste andimprove effectivenessacross platforms
Retail media has been growing significantly
over the last several years as retailer websites
have invested in more opportunities forbrand promotion. Marketers, looking to
impact purchase as much as possible, have
responded to the promise of more shopper
influence and measurable return. Retail media
goes beyond Walmart, encompassing morethan ecommerce to include search engines
and last mile delivery platforms. The valuethat it represents to marketers extends pasta simple conversion perspective, according
to the experts we interviewed. Many of themost successful have adopted a crosschannel retail media approach that includes
traditional retailers as well as search, social,
and programmatic advertising, creating newopportunities through thoughtfully connecting
the shopper experience throughout the journey.

11How are brands achieving a cross-channel retail
media approach? The first step is integrating
retail media into all broader media discussions,fueling integration, efficiencies, and insights that
support omnichannel approaches. “Retail media
increasingly can help brand managers build
awareness and consideration for their brands.
It’s no longer just a tool for driving sales at theend of the media funnel. It deserves to be at theseat of every single media plan out there. It isa standard mandatory investment for all of ourstrategic brands.” Steve Kinsey, GSK’s director ofcommerce marketing.
Kerry Curran, executive director of marketingand growth, Catalyst, has a similar perspective.
“Marketers used to focus on stats around where
the shopper starts their journey to prioritize theiradvertising investment, but what we’re seeing
is a need for an omnichannel strategy that
integrates both traditional search channels like
Google and ecommerce sites like Amazon andWalmart.com.” The top five platforms for digitalmarketing activities effectively cross social,search, and retail; however, online shopping
behavior indicates that there is opportunity
to expand and integrate further, not just froman experience perspective, but also from an
investment and attribution perspective.

While our research indicates that omnichannel
retail media programs will continue to beimportant in the future of ecommerce, manyof the experts interviewed realize that it will
not be easy to execute. The increasingly long
list of retailer websites, ecommerce ad techproviders, and capabilities — as well as theacronyms that go with them — can be difficult
to navigate for even the most seasoned
ecommerce or shopper marketing experts.
Many manufacturing-side marketers areleaning into technology and agency partners
with specialty knowledge to help themnavigate the increasingly complex landscape.
Alex Sherman, chief executive officer & cofounder, PromoteIQ told us that “If agencies
want to maintain their leadership position in
the media space, they need to create centersof excellence dedicated to retail media that
can help brands navigate and take advantageof this retail media opportunity.”

Figure 6. Top five platforms for digital marketing
activities

72%
67%
61%
50%
49%
Read as: 72% of companies use Facebook for digital marketing activities.

Figure 7. 2020 Spending plans on digital ad platforms
Increasing

Same

Amazon Advertising

Decreasing
9%

24%

67%

WMG (Walmart) advertising

67%

24%

9%

OTT/CTV

66%

24%

10%

YouTube ad

66%

23%

11%

Social media ad

63%

Podcasts

60%

30%

11%

Email marketing

57%

36%

7%

9%

28%

Paid search

57%

32%

11%

Target advertising/Roundel

56%

37%

8%

Audio

54%

-of-home" advertising
Digitaladvertising
Digital "outout-of-home53%

Organic Search

51%

Kroger advertising50%

Product listing ads

49%

Influencer marketing

47%

Display ad

44%

26%

19%
24%

24%

8%

41%
23%

27%

6%

46%
35%
38%

18%
18%

Read as: 67% of professionals investing in Amazon Advertising plan to increase their budgets
for this platform.
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 2020

12

The New Hierarchy of Spending AcrossMedia Channels
Marketers are putting more money into
emerging media channels, many of which can
now be managed programmatically. While themost significant budget increases remain withmore traditional media, marketers investing inemerging platforms also plan to increase theirbudgets with these platforms. Podcasts, OTT/
CTV, audio, and digital out-of-home (DOOH)
advertising are starting to receive
more attention.
That said, our research shows that social
media ads had the highest percentage (19%)
of marketers reporting significant budget
increases, followed by email marketing (15%),
YouTube ads (13%), and paid search (12%).
Organic search, displays ads, and Amazon
Advertising (11%) tied for fifth place. Moreover,
two-thirds of professionals investing inAmazon Advertising, Walmart Media Group,
OTT/CTV, and YouTube plan to increase theirinvestment on these media channels. Lastly,
90% of professionals overall reported that they
were increasing budgets in at least one media
channel, and 44% say the funds are from new,incremental budgets.

13

Lean Into Experts
2020. When asked about what will differentiate
media agencies in these RFPs, Vlad Lubimov,senior director of programmatic services of
Xaxis responded, “Platforms and tools used
to be a key differentiator in pitches, favoring
agencies with the resources to develop custom
tools. Now, as the market has matured, thetechnology is more ubiquitous, and it's more
about how you demonstrate what you can dowith the technology, rather than possessing
it alone.”

Agencies, such as media agencies andecommerce specialty agencies, often playa supporting role in the success of a brand’s
holistic, omnichannel digital marketing
program, including ecommerce. According
to our study, many ecommerce professionals
are leveraging some combination of
in-house teams and agency teams to manage
ecommerce channels like Amazon, Target,
and Kroger. “When agencies can bring
integrated commerce approaches,
benchmarks, and insights to the table, they
become a valuable partner for brands when
considering retail media implementation,”shared Paula Hunsche, senior vice president,client engagement, GroupM Commerce.

John Denny, vice president of ecommerce anddigital marketing at CAVU Venture Partners,
shared a similar sentiment, saying, “In orderfor brands to compete today, not only do you
need to find the best agencies leveraging thebest tech, but your partners need the rightstrategies, particularly those that demonstratea firm command of execution across channels,
platforms, and retailers”.

We found that brands primarily operate witha hybrid model for Amazon Advertising, with
61% of professionals investing in this platform
reporting that they manage Amazon bothin-house and with an agency. Hybrid models
were also reported for other top tier retail
media teams including Kroger (46%), andTarget (36%). On the other hand, Walmart
Media Group (WMG) tends to be either
managed exclusively in-house (34%) or
exclusively by agencies (34%), a trend largely
attributed to Walmart’s recent launch of its
self-serve platform.

“Agencies bring specialty knowledge that canhelp brands navigate the complex retail media
opportunities, guiding where to invest, and more
importantly, where not to. Agencies are acting
as an arbitration layer between media owners,
and brand investment budgets, comparing
opportunities across platforms and channels to
guide overall investment performance regardlessof where the media is purchased or ultimately
delivered”, said Todd Szahun, senior vicepresident of ecommerce and new retailat Kantar.

Agencies expect more opportunities tosupport brands’ retail media efforts with 56%
of agency respondents saying they expect
more RFPs in ecommerce and retail media in

Figure 8. How activity is managed across digital advertising platforms
Managed in-house

4%

4%

12%
31%

2%

3%

In-house + Agency

0%2%

Outsource to media agency

4%

5%

5%

Outsource to specialty ecommerce agency

1%

3%

2%

4%

47%

47%

4%

24%
42%

40%

31%

28%

26%
40%

37%

39%

35%
61%

4%

44%

38%

46%
40%

36%

19%

AmazonKrogerAdvertising advertising

31%

25%
36%

15%
Organic
searchOTT/ CTV

20%
Others29%

Display ad

31%

34%
19%

36%

22%

30%
32%

30%

25%

25%

Read as: 61% of professionals investing in Amazon Advertising report managing both in-house and with an agency

14

40%
19%

19%

SocialTargetYouTube Digital outEmailPaid search Podcasts
media ad advertisingadof-home marketing/Roundeladvertising

Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 2020

34%

51%

36%

40%

9%

32%

49%
22%

3%

15%

27%

Product
listing ads

34%

20%
Audio

Influencer
WMG
marketing (Walmart)advertising3. More thanconversion
The power of the
product detail page
Across many of our interviews, it was clearthat marketers valued the product detailpage (PDP) for its important role in driving
conversion. Our study revealed that, among all
online purchasers, nearly half (45%) indicatedthat they visited a PDP at the time of purchase,and 41% of those that ranked any touchpoint
as #1 said PDPs had the biggest influence on
their purchase.

15Figure 9. Shopper touchpoint at time of purchase
Rank #1
45%

45%

40%

40%

35%

35%

30%

30%

25%

25%

20%

20%

15%

15%

10%

10%

5%

5%
0%

% Ranked as Most Influential% Engaged in Touchpoint

Online Buying Touchpoint
50%

Product
Page
Net
ProductDetaildetailpage

SearchBarbarNet
SearchAds/PromosNet
Ads / promos

Another website
/ app
Net
Another
website/ app

Chat/Help
Net
Chat / help0%

Read as: Among all online purchasers, 45% visited a PDP at the time of purchase and 41% of those that ranked any touchpoint as most influential
said PDPs had the biggest influence on their purchase
41% rank as #1
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 2020.

We also found that shoppers do review PDPs
beyond the first page, with 49% of online
purchasers reporting scrolling past the firstpage to look for what they want, especially for
general merchandise. For younger generations,the rate is even higher: 56% of millennial and
54% of Gen X online purchasers scroll past thefirst page when researching products
and brands.
Rob Gonzalez, chief marketing officer &co-founder at Salsify, has summed up thisopportunity by saying “the search bar andproduct detail page are the primary places
where consumers will interact with yourbrand…the PDP is your brand marketing —most companies don’t understand this. Millionsof dollars are spent on the brand’s website, but
only a small fraction on the PDP, but it shouldbe opposite.”
Despite the PDP’s importance, only 37% ofecommerce professionals reported being
focused on optimizing their PDPs for SEO
across the online platforms they use for
digital marketing. Best-in-class ecommerce
professionals frequently optimize PDPs, employ
full-funnel retailer-specific search and content
strategies, and enhance images to maximize
the performance on each retail site.

Search: Important Across Age, Platform,
Touchpoint
Search is reported as the second mostimportant touchpoint after PDPs that online
purchasers use at the time of purchase. In
fact, 40% of online purchasers use search at
the time of purchase, and 30% of those thatranked any touchpoint as most influential
say search has the biggest influence on theirpurchase. This transcends generations andage groups, with 53% of millennial online

16

purchasers reporting the highest level ofsearch at the time of purchase, followed by
Gen Xers (35%) and boomers (33%).
Search is not exclusively an upper-funnel orlower-funnel tactic. Regardless of retailer orsearch engine, search plays an importantrole in the shopper’s full-funnel experience.
Regarding Google’s role in the full shopper
journey, Jane Butler, Google’s managing
director of pure-play retail, said, “Google is theconnective tissue for shoppers to discover, seereviews, compare products, andultimately purchase.”
Our survey revealed that, among ecommerce
professionals with a clear and differentiatedecommerce strategy, the “changing role ofsearch marketing” was cited as one of thetrends with the greatest impact on theirecommerce marketing strategy. Search,both on search engines and on retail sites,
is a proxy for consumer interest, intent, andthe primary way shoppers navigate purchase.
While professionals reported tapping into
search as an output to inform their searchand content strategy, they also reported using
search as an input to inform competitive
positioning, business decisions, and productdevelopment efforts.
“When retailers work with the search teams, it
often changes the nature of the conversation.
A search team's skillset will push conversation
to the nature of the marketplace, buying
functionality and sophistication, and how
viable a path to conversion each tactic orplacement is. Search teams will reference
similar experiences from within retailer
networks plus familiar marketplaces to protect
brand budgets and drive performance, while
pushing retailers to innovate.” Riyaad Edoo,senior partner, U.S. search & ecommerce leadfor a CPG client, Mindshare.

Non-branded Terms: A Route to Discoverability
Non-branded product search exceeds branded search inecommerce, with 37% of online purchasers reporting searchinga specific type of product, while 31% search for a specific brand.
This online shopping behavior has improved a brand’s ability to
be discovered through investing in non-branded search. While
many of the professionals interviewed cited a blend of bothbranded and non-branded keywords as part of a holistic searchmarketing strategy, the increase in online shopping over thelast four months and subsequent increase in search marketinghas made it more expensive to compete, and it is forcing
professionals to make tough choices about where to play.
Amazon Advertising’s Ryan Mayward says customers cometo the store to discover new brands. In fact, the “majority ofcustomers are using category shopping terms when they shop
on Amazon, which means they generally know what they arelooking for, but are not brand-specific,” he says. “This is anindicator that they may be open to new brands.” Maywardsaid that “69% of shopping queries on Amazon don’t have any
specific brand name in them.”
Building a non-branded strategy doesn’t mean going all-in on
top category terms either. “If you are a niche specialty dog
food brand, you may decide to not bid against the term ‘dog
food’ even though it is one of the most popular keywords in the
category. Instead, your winning strategy might be in targetingother lower-volume non-branded keywords that are more closelyaligned with your brand positioning, like ‘organic dog food’,‘puppy dog food’, etc. This is especially true if you are in a highly
competitive category such as pet food, where numerous megabrands are bidding on those top search terms and driving up thecost.” said Riku Laitasalo, account director, Pacvue.

The Future of SearchSome of the key trends we uncovered regarding the future ofsearch advertising include: personalization, voice search, andvisual search.
While many brands have reported looking for opportunities topersonalize their overall offer, personalization in search is more
nascent, and an area to watch over the coming year. Google,
one of the pioneers of personalized search, believes that the
future of retail and product search will only become more
personalized. “Personalization is still in its infancy stages, which
will accelerate as it yields strong dividends for both consumers
and retailers,” said Christina Brandeberry, managing director of
shopping and performance at Google.
Nearly two-thirds of online purchasers (64%) own a voiceenabled device, such as Amazon Alexa, Google Home, ora voice-enabled smartphone. More than one-third of these
consumers use their devices to search for products, and 28% usethem to purchase products. According to our research, the mainbarrier to adopting voice search for commerce is that it is simply
not a habit. More than half of respondents (51%) who have notused voice assistants for shopping tasks said the fact that it’s nota habit has prevented them from using it.

17

Figure 10. Voice device uses
37%

35%
28%

To search for products To achieve a task using To add products to a
Alexa skills
shopping list /basket

28%

To purchase products

Read as: 37% of voice-enabled device owners use voice to search for products.
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 2020

As consumer voice behavior continues toincrease, it also continues to evolve. Amazon
Advertising’s Ryan Mayward reports that,“We’re starting to see adoption of shoppingby voice, typically in the CPG vertical where
customers are buying replenishable items.
But I think the challenge of branddiscovery remains.”
Today, voice search advertising remains
a lower priority for many organizations in
our study; however, 18% of ecommerce
professionals still rank it among their top
three biggest opportunities over the next 12months, a figure that increases to 20% overthe next five years.
Visual search follows a similar pattern tovoice, as Amy Vener, head of retail strategy
and marketing at Pinterest reports, “Visual
search is growing exponentially, but the
dollars that brands spend haven’t caught
up yet.” As more shoppers continue to shop
online due to COVID-19, we see an increasingrole for both visual search and virtual /augmented product experiences.

18

30%

None of the above

4. Going
beyond ROAS
Integrate media and
KPIs for sustained
growthWhen it comes to measuring success across retailers,
ecommerce professionals express varying degrees ofconfidence in their ability to measure return on investment.
Most agree that measuring success is achievable acrossdigital advertising, but more challenging for emerging
platforms, such as podcasts, OTT/CTV, and audio.

19

Figure 11. Level of ability to measure ROI,
by media platform
Not very well/ not at all well

Very well/ moderately well

Kroger advertising
Email marketing
Paid searchAmazon advertising
Product listing ads

goals. Mindy (Martin) Fashaw, chief operating
officer, Pacvue, shared an example of a clientthat wanted to improve ROAS and driveincremental new customers — two competing
goals. “If you’re acquiring new customers,that is going to take investment, and therefore,
you cannot expect to increase returnon investment."

WMG (Walmart) advertising
Target advertising / Roundel
Display ad

The Data DilemmaSocial media ad
Organic search (SEO)
OTT/ CTV (over-the-top media / connected TV)
YouTube ad
Audio (e.g. Pandora, Spotify)
Podcasts
Influencer marketing
Digital "out of home" advertising
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

Among ecommerce professionals who used Kroger advertising in the last 12
months, 93% indicated that they were able to measure ROI very well or moderately
well, while only 59% say the same for podcasts.
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 2020

Regardless of the platform, when discussing
measurement in our interviews, one thing wasclear: Brands must think beyond return on ad
spend (ROAS). “If companies aren’t careful,they are going to ROAS themselves into a
corner,” said Kristina Smith, vice president ofdigital marketing at The Riveter.
Many marketers admit it’s tempting to rely
primarily on ROAS to gauge success, but ROAS
does not provide the full picture. “ROAS is avery crude and very incomplete data point. We
look at it, we measure it, we monitor it because
it is an easy number to calculate, but it canbe highly misleading,” said Steve Kinsey, GSK.
Pacvue’s Riku Laitasalo echoed that sentiment
as well, “There are certain keywords that will
never be ROAS positive…It is all about looking
at it through the perspective of your total
portfolio as well as the long-term benefit foryour company.”
The industry professionals we spoke with on
this topic all recommend considering a rangeof other metrics to create a more complete
picture of performance. Trevor Krehel, channelmarketing manager at Seagate, suggests
looking at share of search as a key retail media
metric, which “helps us balance ROAS withhow advertising is performing and growing
relevancy within products.” He said you have tolook at metrics together to make sure the “retailbusiness is driving the advertising business andvice versa.”
Some brands also find out the hard way that
ROAS goals often conflict with their business

20

Most organizations agree that having betterdata analytics is the key to growth. In fact,
when asked about the top area of allocation
within ecommerce budgets, the highest
percentage of professionals (56%) said data
and analytics services.
“Unfortunately, it’s not enough to invest in data
and analytics services. Brands must tear down
silos and integrate data across teams. Finding
and integrating all data sources in the company
takes time, but it is the future,” said Bob Land,
vice president of consumer experience at
Dorel Juvenile.
Many of the ecommerce professionals we
spoke to reported sitting somewhere on the
spectrum between simply leveraging data fromthe dashboards of their partners and bringing
together cross-functional internal teams toreview and analyze their partner dashboards
as a group. For many brands, having the rightdata and infrastructure requires investing indeveloping a custom automated solution. “Ifyou look at the brands that are really winning,
it is when they are investing in their own
technology and building their own expertise,”said Melissa Burdick, co-founder and president,
Pacvue. “They may be licensing a tool, but arealso really focusing on building their own techand ecommerce dashboards, getting types ofdata to understand the ecosystem within theircompany to manage inventory across retailers
hosted within their companies.”
While many manufacturers have stopped
short of fully investing in building a custom
integrated data solution in-house, thereis broad consensus about the opportunity
to better integrate and act on data more
effectively, as well as set cross-team KPIs andprocesses to drive the business forward.

“Siloed teams withinorganizations — especiallybetween sales and marketing
functions — precipitatea lack of data sharing,
battling information anddata intelligence. The bestorganizations have coalesced
these disparate functions
into ‘commerce marketing’
structures, where all teams
leverage the same cross-retailer
data intelligence, aligning sales
and marketing, agencies, andtechnology stacks.”— Nich Weinheimer
General manager of ecommerce, Kenshoo21

5. Open forcollaboration
Brands need retailers
and retailers need brands
We heard that using data within organizations
more effectively is critical, and so is increasingtransparency and sharing data and metrics
between brands and retailers. Multiple
ecommerce professionals cited the need forbrands and retailers to increase understanding
and sharing of data and performancemeasurement, as a key element to elevating theirpartnerships. When agency professionals wereasked what the biggest opportunity area is forpartnering with ecommerce retailers, the largest
percentage (29%) said performance tracking,measurement, reporting, and analytics.

22

Figure 12. Biggest opportunity forpartnering with ecommerce retailers
Performance tracking, measurement,
reporting, & analytics

29%

Online shopper insights

20%

Sponsored products/brands

13%

Attribution

11%

Technology/partner recommendations

9%

New ideas for display ads

6%

Product description page SEO

4%

Other

2%

Don't know

delivery appear to be aligning manufacturer
and retailer interests now, more than ever.

7%

Read as: 29% of agency professionals ranked performance tracking,measurement, reporting, and analytics as the biggest opportunity forpartnering with ecommerce retailers.
Note: small base
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 2020

However, retailers have a direct relationshipwith the customer, and that customer
relationship is governed by terms andconditions. When discussing requests frombrands and manufacturers for increased data
sharing, Walmart Media Group’s Stephen
Howard-Sarin calls out the importance ofcustomer trust. He says, the “customer did
not consent to have the retailer sell their data
to anyone else…the relationship between theretailer and customer is one of trust…we takethat very seriously and honor ourcustomer’s requests.”
Some of the leading manufacturers have begun
to find new ways to partner with retailers tobridge the gap. “Retailers are understandably
not always willing to share their 1P data, but I
believe there are ways of sharing data between
retailers and manufacturers that are equally
beneficial, but also keeps confidentiality,”
said GSK’s Steve Kinsey. “Different people atdifferent retailers are willing to consider it, but
we’re not there yet in terms of implementation.
We need to continue to look for opportunities toshare data and be willing to partner and workwith tech partners to allow sharing to happen
so that it doesn’t compromise confidentiality.”
While better integrating data and getting
shopper insights seems to come from multiple
places across the ecosystem, the gaps in

Sharing Responsibility for Growth
For many we interviewed, COVID-19 has
accelerated other partnership trends between
manufacturers and retailers aimed at growth.
Some cited more lenient terms and conditions,while others signaled that the disruption
helped bring forecasting and supply chain
teams closer together as both manufacturers
and retailers struggled to meet and anticipate
demand. Our research shows that 40% of
industry professionals agree that the biggest
opportunity in ecommerce marketing in thenext five years is improving the user experience.
With ecommerce growing as rapidly as it isnow, we see that this trend will only continue inan effort to improve the customer experienceand maximize the sales potential.
Figure 13. Biggest Ecommerce Opportunity
Next 12 months

Next 5 years

42%
40%

Improved user experience

34%
37%

More accurate consumer targeting acrossretailers
Increased range of options for creative
content/ad units

30%
29%

Rise in social commerce

30%
26%
29%

Closer alignment of digital advertising withmerchandising teams

22%
23%

Better delivery logistics

28%
23%
21%

Direct brand.com sales

Voice search advertising

18%
20%

Internet of Things devices

18%
20%

Google 'Buy on Google' direct sales

15%
15%

Visual search technology

15%
15%
12%
10%

Chatbots

9%

Augmented reality

Other

14%
3%
2%

Read as: 40% of industry professionals say that improving the user experience isthe biggest opportunity in ecommerce marketing in the next five years.
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study, April 202023

Sustainability is the future
Amazon’s announcement that it would
be net-zero carbon 10 years before theParis Agreement’s goal further elevatedan already-rising topic in ecommerce.
Consumers expect retailers and brands
to be more environmentally conscious in
their choices. Our research shows that
70% of online purchasers are aware
if the packaging they receive from anecommerce order is recyclable or not,and when it is, 80% of those consumers,in turn, are recycling. Leading brands
are incorporating their sustainability
initiatives into product detail pages,
product packaging, and advertising,raising consumer awareness and creating
new reasons for sustainability-minded
shoppers to purchase. Complexities
abound as manufacturers andretailers build out their sustainability
platforms, and leaders in the space arefinding success by syncing plans andrequirements early to drive efficiencies in
the overall process.

24

6. The race to own“The Third Shelf”
The exceptional riseof online grocery
and last mile delivery
Prior to COVID-19, Kantar projected that online
grocery sales would nearly triple by 2024,
and the pandemic has only accelerated thatgrowth. Another major contributor to the risein online grocery has been last mile delivery
partners like Instacart. While these last
mile partners have simplified the otherwise
complex and costly tasks of shopping anddelivery for retailers, they have introduced an
entirely new workstream for manufacturers
who wish to sell products on the platforms.
In addition to managing the physical instore shelf, and the online retailer digital
shelf, manufacturers are now responsible forcreating and optimizing their presence on thelast mile delivery partner’s website or app, or‘The Third Shelf’.
“The reason that product assortment doesn’tmatch what might be available in the grocer
is because brands who sell in the store are notautomatically available on last mile delivery
apps. At this point in time, manufacturer andretailer interests seem to be well aligned tosupport the expansion of products listed inlast mile delivery partner ecosystems, to go
well beyond the typical set of items currently
available," said Kantar’s Todd Szahun.

25

Though many retailers have sought the help of last miledelivery partners to support the delivery of groceries,
one retailer stands out among its peers, offering trueomnichannel grocery capabilities. Amazon offers a fullsuite of physical and digital grocery shopping options
under the Amazon Grocery banner, from centralizedshipping of shelf stable essentials via Amazon Pantry,
to pick-up or delivery of fresh foods and produce within
an hour through Whole Foods and Prime Now. Together,
these initiatives have helped Amazon establish aformidable omnichannel grocery presence.

Figure 14. Planned use of delivery
services in the next year

“The execution of omnichannel grocery really comes
down to complex logistics, and Amazon has the headstart when it comes to understanding and investing in
the technology to deliver a great consumer experience,
underpinned by logistical complexity,” said Rachel
Dalton, director of ecommerce and omnichannel
insights at Kantar. “Brands should prepare for big shifts
and integration across its range of grocery services as
Amazon sets it sights on retailers and grocers that may
have the competitive advantage of a larger
physical footprint.”

5%

Amazon isn’t the only one looking to grow its online
grocery share. It’s a top strategic priority for the retailers
we interviewed as well as major omnichannel players andtraditional grocers. With the pandemic creating so many
new customers and new habits, online grocery and last
mile delivery services are not only here to stay, but they
are expected to grow. According to our research, online
purchasers indicated that they plan to shop more with
last-mile providers in the future: 63% who have used
Instacart plan to use the service more in the future.
The story is similar for other last mile providers.

How far has COVID-19 accelerated online grocery? GSK’s Steve
Kinsey believes that, “COVID-19 alone has accelerated online
grocery by about three to five years.” Overall, the impact andinfluence of online grocery and last mile providers has created ahuge shift, with implications for grocers and brands. Suddenly,
grocers across the country are forced to invest in their online
grocery platforms to meet immediate changes in shopper
demand, or risk being left behind.
Online grocery is not just about food. It encompasses the fullgrocery store, so brands traditionally in the center aisles in store or
brands whose products have not been well suited for ecommerce
historically (like perishables) are just now evaluating their online
grocery position given this massive transformation. Jessica Hauff,senior vice president, ecommerce & data activation, L’Oréal notes“Beauty has not been the first category of focus for many of ourretailer partners from an ecommerce and O2O (Online to Offline)
perspective, and the same was true for click and collect: grocery
was the priority. Now everyone is realizing there is an opportunity
to expand beyond grocery and we are partnering with retailers toelevate these other categories, helping to make it more convenientand engaging for shoppers, as well as increase basket sizes
for retailers.” “The opportunity with last mile delivery partners
right now is like the opportunity at Amazon in the early days ofecommerce: brands who invest early will have the advantage
of increased visibility in their category, and the opportunity toestablish a customer relationship on the platform and earn that
customer’s loyalty,” according to Kantar’s Rachel Dalton.

26

More than in the past

The same as in the pastLess than in the past

63%
29%

Instacart

8%
60%
35%

Deliv

52%
44%

PrimeNow

4%
46%
38%

Postmates

17%
42%
45%

Shipt

13%
41%
45%

DoorDash

14%

Read as: Among those online purchasers who used Instacart, 63% plan to
use the service more in the future.
Source: Catalyst and Kantar: The State of Ecommerce Landscape Study,
April 2020

The Instacart Story
One of the winners of the online grocery boom
has been Instacart. Next to Walmart and Amazon,
Instacart has emerged as one of the biggest names
in online grocery according to our research. While
Instacart has been growing over the last coupleof years, it is now experiencing unprecedented
growth driven by the pandemic. Seth Dallaire, chief
revenue officer, Instacart, describes this expansion as“transformational,” saying that “every day is bigger
than the previous day.”To keep up with growth and demand from brands,
Instacart has been investing in its ad platform,
specifically sponsored search ads, keyword
optimization levers, and customized bidding. GroupM
Commerce’s Paula Hunsche and her team haveobserved this in real time, “Instacart has madean impressive impact by evolving their advertisingofferings at a time of massive growth for them.”
Interviews with Instacart and other ecommerce
leaders revealed several key trends, opportunities,
and challenges for marketing on Instacart:
Winning the first basket: When it comes to
Instacart, the savviest brands are hard at work figuring
out how to win the first basket. Once products are ina shopper’s basket and shopping lists are pre-loaded,
repeat purchases are more likely, making it critical to
get your product in the shopper’s first basket.
The most sophisticated marketers are prioritizing
strategies for new customer acquisition, and Instacart
is working on making more data available to support
brands’ efforts.
Changing demographics: Older generations areusing Instacart. Seth Dallaire reports a “decent uptickin that demo coming in for the first time.” While
boomers and even Gen Xers still lag millennials in
Instacart use, the data directionally shows that manyolder shoppers who have used the service say theyplan to use it more often. This development creates
opportunities for brands to reach new audiences who
have not adopted online shopping previously.

category share when planning for online grocery.
Brands in this camp will need to reset expectations
and adopt a digital mindset to be successful in the
online grocery world.
But it won’t be easy. The challenge with online grocery
is that shopping is nonlinear compared with shoppingin a physical store. A grocery store planogram is set up
in a specific way, with fresh food on the perimeter andshelf-stable food, HBC, and household items in thecenter. Getting shoppers to build their online basket ismore challenging since they are not walking throughthe store to find key products. Brands are trying tounderstand how and why consumers shop online forgroceries to develop opportunities to influence theirpath and brand consideration.
Inventory management: Instacart offers brands
opportunities above and beyond advertising. Its large
scale enables brands to gain insight into typically
hard-to-get inventory data across locations andregions, empowering strategic decisions. Brands
want insights, lifetime value, basket mix, adjacencies,
shopping frequency, and out-of-stock notices sothey can determine product and mix by region.
Overall, Instacart can share more data because it
is not constrained by the more traditional retailer/
manufacturer agreements.
Optimistic future: Many of our interviewees
recognized the promise of Instacart, but also reported
growing pains, which is to be expected with any
nascent media platform. Despite some bumps in theroad, professionals are generally optimistic about theplatform’s future.
Online grocery’s unprecedented growth, when coupledwith a manufacturer’s reprioritization of marketing
efforts related to shifting demand, seems to largely
be viewed as an opportunity for brands to redeploy
budget and re-evaluate their online grocery strategy
to capture share in one of the largest growth areas inecommerce today.

Adapting to the digital experience: “All physicalnotions are challenged when shopping online,” Seth
Dallaire said. However, some marketers are holding
tight to traditional shopper marketing constructs like27

7. The new
momentummindsetPutting progressover perfection
One of the themes that came out of our interviews was a sense thatplanning for ecommerce was almost futile, particularly becauseof the rate of change. As is the case with other forms of retailmarketing and advertising, the process of ecommerce hasn’t beenrefined for decades, and the market research, measurability, tools,
and data that were used to train today’s senior leaders, don’t exist
in the same way for ecommerce. Perhaps as a reflection of that,
we found that only 8% of professionals see themselves as leadersin ecommerce. Most of our respondents indicated that, instead ofworking on developing the perfect ecommerce playbook, or waiting
to invest in a specific ecommerce tactic until it was perfected, they
instead relied on moving forward with a testing mentality, taking
regular chances and then aggregating many small wins over time.
Simply put, they seek progress over perfection.

“One way I try to do this is byhaving an experimentation
mindset, like a growth hacker:
identifying small, incremental
changes that, when compoundedover time, can accelerate therate of growth.”— Ricky Busby
Brand building leader for new
ventures, Georgia-Pacific28“No one has it right – no one
has it really figured out. People,
practices, and technology
change so frequently, customer
behavior changes so frequently.
It is still day one for many
companies that have beenaround a long time.”— Kristina Smith
Vice president of digital marketing,
The Riveter

Overall, more companies are focused on
developing dedicated online strategies
rather than simply applying offline
strategies to online as they in the past. Asa sign of this growing commitment, moreindustry professionals (45%) say they now
have a clear and differentiated productportfolio strategy for ecommerce thanthey did two years ago.
Two areas where brands are expanding
their test-and-learns for insights are withthird-party (3P) selling on Amazon anddirect-to-consumer (DTC). Today, 44%of ecommerce professionals say theircompany is selling 3P, and nearly half ofprofessionals see 3P as an opportunity.
“Although it can add to your team’s
resources, a 3P marketplace strategy
provides you with one more leg to yourecommerce stool,” said Reid Greenberg,
executive vice president of digital at
Kantar. “With 3P listings, you have theflexibility to edit your product detail pages
in real time, generate retail margins rather
than wholesale, and test and learn new
product ideas and launches with speed
and agility. 3P also helps build internal‘muscle,’ so that when you are ready tolaunch a direct-to-consumer channel,
these capabilities exist.”

DTC: The Opportunity andthe Watch-Outs
Manufacturers are also rapidly testing,
exploring, and gaining momentum with
DTC. Over the past several years, DTC
brands have delivered some inspiring
examples of the opportunity, and big
brands have noticed. Digitally nativeand extraordinarily nimble, DTC brands
have found innovative and helpful ways
to serve shoppers while challenging
the world’s legacy advertisers in theprocess. Catalyst’s Kerry Curran said,“Disruptive companies are identifying
gaps in traditional retailers’ offeringsand delivering solutions around desires
consumers didn’t even know they had.”

62% of ecommerce professionals saythat increasing DTC sales is a strategic
focus, similar to the findings in
Catalyst’s 2018 survey.
Aside from keeping up with thecompetition, what is motivating so many
professionals to upend their historicalbusiness models? What do they standto gain? Our interviews with ecommerce
leaders and experts revealed two key
benefits to a DTC model:
Self-reliance and agility: COVID-19
showed the industry that having a DTC
channel enabled additional flexibility. “I
think you will see a lot of brands moveto a DTC model because they’ve realized
how reliant they were on retailers,” said
Seagate’s Krehel.
Many brands with nonessential products
were caught off guard when retailers
stopped ordering their products during
the pandemic, a decision that had adownstream impact on supply chain
logistics, reporting, warehouse capacity,and more.
A DTC model mitigates issues likethese by creating more internal control
and flexibility. The many ecommerce
professionals we spoke with said agility is
key in the best of times, and even more
so in the worst of times. “If you haveflexibility in your ways of working, you are
more equipped to deal with disruptions,and they will continue to come,” said
Gavin du Toit, vice president of global
ecommerce at Colgate-Palmolive. “Whatwins in these scenarios is your internalability to be agile.”

The enviable success and competitive
threat of DTC brands have prompted
many manufacturers to test DTC businessmodels for the past several years. Today,29

Greater access to data and consumers: For
many of the large organizations we interviewed,
DTC is a relatively small percentage of sales, but
provides access to data and insights that fuel greater
innovation and success in ecommerce andother channels.
Salsify’s Rob Gonzalez recommends that brands take
DTC seriously, and not for the volume. “The reason
to do DTC is for the data and experimentation it
provides,” he said. A DTC model not only offers anincremental distribution channel, but it also enables
significant and “free” learnings that can be applied toother channels.
DTC also creates direct relationships with consumers
and allows greater access to first-party data,
which will become increasingly important when the“cookieless” future soon arrives. Through DTC andother approaches, many brands and advertisers seek
to scale first-party relationships and get closer totheir consumers.
Though the opportunity of DTC, particularly in a postCOVID world, is widely recognized, it is not without
its watch-outs. “Profitability has been somethingthat DTC overall has struggled with,” said GeorgiaPacific’s Ricky Busby. Many DTC players are seeing
their growth plateau and are turning to the traditional
channels and tactics leveraged by their manufacturer
brand competition. “Early DTC players are now sellingin-store because there is a limit to the volume they
can sell online,” Busby said. Given some of thesechallenges around growth potential and profitability,
he predicts that many brands will find a hybrid modelis the most viable.
Professionals also need to be realistic about therelationship consumers want with large CPG brands
and the feasibility of scaling first-party relationships.
“DTC assumes that your consumers for your productwant to have a direct purchasing relationship withyou,” said Colgate-Palmolive’s Gavin du Toit. "Thatmay not be the most convenient solution for them."
For some products, consumers simply might not have
any interest in a direct relationship withthe manufacturer.

30

Counting down to a cookieless future
The industry has relied on cookies for morethan a quarter of a century. However, in early
2020, Google revealed that by 2022, cookie
tracking will no longer be available throughthe Chrome browser, forcing brands to reexamine their planning for 2021 and beyond.
This monumental change is forcing brands
to prepare for the day when we know lessabout the individuals that we want to target
with digital media. In response, many
manufacturers are using this opportunity toinvest in and fine tune their direct customer
strategies including:Launching DTC websites for direct customer
acquisition
Identifying and migrating existing consumers
to brand-owned platforms
Developing customer loyalty initiatives
Launching or improving their Customer
Relationship Management (CRM)
capabilities
Advancing segmentation based on many
variables including customer lifetime value
Testing DTC lookalike media targeting andsegmentation strategies

“We’re making a significant
effort to increase first-party
data and our ability to havemore of a direct customer
relationship, and we’re doingthat primarily with an eye
towards improving media
capability and functionality”— Steve Kinsey, GSK’s director ofcommerce marketing

31

Recommendations
Ecommerce professionals have a long
list of areas to invest in. To simplifythat list, we’ve distilled down the key
insights into a set of recommendations
aimed at improving your ability tosuccessfully navigate the complex andfast evolving ecommerce and retail
media landscape. From data to content
to the right tech stack and digital
media mix, the areas of integration andoptimization continue to grow.

32

Ensure a strong and integrated brandpresence across all platforms

providing helpful information that answers
key questions.

When it comes to retail media solutions andopportunities, brands need to think beyond
Amazon and other established retailers.
Retailers and ecosystem partners such as
Walmart, Target, and Instacart have madesignificant leaps forward in their content andad platforms, and they are gaining traction
with shoppers. Brands who invest in content,
data, search, media, and measurement acrossa wide range of these partners stand to gain
higher online share, a broader customer base,and more efficient media spend, leading tolower overall cost-to-serve while maximizing
sales and margin opportunity.

When evaluating changes to product,
assortment, pack size, fulfillment, and otheraspects of ecommerce, remember to apply thelens of convenience and ease. By putting these
consumer priorities first, brands are likely to findthat many decisions become easier.

Brands who also go beyond integrating
ecommerce marketing can find new levels ofawareness, engagement, purchase, and loyalty
through integrating the channels that playa critical role in the shopper journey: namely
search, social, and display. Capitalize onchannel synergies to create a seamless journey
and positive shopping experience.

Prioritize convenience and easefor shoppers
With new platforms, tools, and data available
almost daily, it can be easy to lose sight of thesingle most important element of a successful
ecommerce strategy: the consumer. Our
research shows that convenience mattersmore to consumers than price, and thatthey appreciate ads that are helpful. Ensure
your brand is a point of convenience tothe consumer by being easily findable andaccessible on their preferred channels and by

Invest in search, content, and PDPs tomaximize findability and conversions
Our research found that PDPs are one of themost critical elements of a brand’s ecommerce
presence and yield significant influence over
shopper purchase decisions. To successfully
take advantage of the opportunity, brands
need to be visible and deliver content thatconverts. This means optimizing your PDPs
for SEO around consumer search interest
including inspiration from need states,
reviews, and Q&As, using the consumer’s
language as much as possible. It also includes
investing in ‘ecommerce first’ images that go
beyond traditional product package shots todemonstrate key consumer benefits, points
of differentiation, credentials from industry
professionals, and highlights of corporate social
responsibility programs to give shoppers every
reason to convert.
Companies that lead the way do not view
PDPs as a one-time investment: best practices
include a refresh two times per year, or any
time a major category or cultural trend could
influence purchasing preferences or the way
shoppers search.

33

Develop customized retail
media strategies
The growing scale and complexity of theecommerce and retail media world can bedaunting. While partners have emerged toprovide some scale to integrating and buying
media across the major retail media solutions,the ecosystem is far from seamless. To achieve
the next level of growth in ecommerce,brands are developing unique strategies foreach platform, a reflection of differences in
shoppers, behavior, and preferences
across retailers.
Customization strategies include creatinga distinct key phrase strategy integrating
retailer-specific shopper insights, that are
weaved throughout the product content,
paid keywords, and bidding strategies.
Product margins are different for eachretailer, and so is the size of the shopper base.
Brands who are testing their media to findthe monthly addressable market size on eachretailer will have a competitive advantage
when figuring out how much to pay for specific
key phrases as well as managing their overallretail media investment.

Measure what matters, not what is easyIt’s easy to fall into the trap of focusing ona single KPI, like ROAS. While ROAS can beeasy to measure and is not without value,
optimizing on one KPI alone can lead brands
to make decisions that don’t necessarily alignwith overall business objectives. Instead, werecommend that brands look at a combinationof metrics together for a more robust andvaluable picture of ecommerce performance.
What other KPIs should companies pay
attention to? The people we interviewed
recommend focusing on key acquisition or
retention KPIs such as cost per acquisition(particularly for businesses growth), share of34

search, lifetime value, and more depending
upon your business goals for a specificretailer. Advanced professionals we spoke torecommend a holistic approach, including
measuring acquisition and retention together
to create a virtuous circle of converting theright customers while simultaneously driving
lifetime value. It takes longer to report on
multiple measures, and analyzing the signals
can sometimes be difficult, but today’scomplex retail environment requires
complex measurement.

Unlock custom opportunities withretailers through mutual value
Nearly all of the industry professionals that we
spoke with want more cooperation, flexibility,and data from retailers. While achieving
certain levels of retail media investment
may get brands some consideration for pilot
opportunities, we found an entirely different
set of manufacturers that were able tosuccessfully partner with retailers to get what
they wanted using one simple strategy...
identifying opportunities of mutual value.
In order to do this successfully, make sure you
have the right audience, find out what theretailer initiative priorities are for the business,
category, and the shopper experience. Identify
sensitivities and non-starters and use acollaborative approach to find overlappingzones of possible agreement. Engage in an
open dialogue to unlock ideas for enhanced
capabilities, create new customer experiences,and improve performance. Work the concepts
into your Joint Business Plan for the year, even
if you can’t identify the specific output at thetime, and then begin working on it early in theyear. Custom opportunities take time to define,
approve, and execute.

Lean into expert partners throughout
your journey
No matter where you are in your ecommerce
journey, experts from your partner ecosystem
possess knowledge and skills that bring uniquevalue to manufacturers, now more than ever.
Partners can include agencies, consultants,
data providers, technology and measurement
partners, among others. Success in 2021 will
depend on your ability to collaborate andstrengthen relationships with experts, leaning
in for guidance and advice on many of yourbusiness challenges.
Each partner sees a different piece of theecommerce ecosystem, and it is importantto remember that no one partner will haveall of your answers. Identify the unique skills
that each partner brings to the table, invite
those partners to strategic planning sessions
typically outside the course of your interactions,and educate your partners on your business.
Partners that have a deep understanding ofyour business will be better positioned to offer
up alternatives that go beyond the scopeof their assignment and help brands gain
competitive advantage. Retail media is so
fragmented that data, training, and innovation
have become table stakes along the path toecommerce excellence. Some partners may
offer up additional work for free, but freedoesn’t always equate to the best effort. Don’t
be afraid to pay for insights, training, and timethat partners invest going above and beyond,and make sure to set aside additional budget tofund these incremental opportunities.

Embrace online grocery and last-miledelivery, even if you aren’t a traditional
grocery brandThe unprecedented growth of online grocery
and last mile delivery is an opportunity now
that will only get better in the near term.
Don’t assume that online grocery is irrelevant

for your brand or product. Online grocery
shoppers are just beginning to fill their baskets
with more than just traditional grocery items,
as more products become available. Smart
manufacturers are investing heavily now andunlocking ecommerce opportunities across awide range of product categories, from haircolor and household products to frozen foodand dairy. As shoppers learn to buy these newcategories, brands that invest now will gain
long term strategic advantage.
Brands should test these opportunities not
only to acquire new customers and driveincremental sales, but also to gain valuable
insights into other areas of their business,such as supply chain, inventory, and more.
Instacart, for example, works with a broad
range of grocers and retailers, and can provide
unprecedented visibility into shopping behavior
and inventory across stores.

Test and learn now, don’t wait until
it’s perfect
Just act. Small wins will add up to big ones
over time. Though it’s tempting to wait until
a campaign, asset, product, or strategy isperfect before launching, don’t let perfection
delay progress.
In the quickly changing world of ecommerce,
it’s more important to test new opportunities
immediately and regularly. A rigorous testing
framework and methodology will let you fail
fast and identify where you need toinvest more.
Though navigating the uncharted watersof a new platform or new offering can be
uncomfortable, doing so will pay off in the longrun with insights, learnings, and expertise thatcreate sustained competitive advantage.

35

Lead Writers
Rachel Dalton

Todd Szahun

Kerry Curran

Meghan Lavin

Director Ecommerce &Omnichannel Insights,
KantarSenior Vice President
Ecommerce & RetailInsights, Kantar

Executive Director,
Marketing & Growth,
Catalyst

Partner, Director ofMarketing, Catalyst

Contributors

36

Christina Brandeberry

Melissa Burdick

Ricky Busby

Jane Butler

Managing Director, Shoppingand Performance, Google

Co-Founder & President,
PacvueBrand Building Leader
for New Ventures,Georgia-PacificManaging Director,
Pure Play Retail, Google

Seth Dallaire

John Denny

Gavin du Toit

Riyaad Edoo

Chief Revenue Officer,
Instacart

Vice President Ecommerce& Digital Marketing, CAVU
Venture Partners

Vice President, Global
Ecommerce, Colgate-Palmolive

Senior Partner, U.S. Search &Ecommerce Lead for
a CPG client, Mindshare

Mindy (Martin) Fashaw

Carey Spencer Gervason

Rob Gonzalez

Pam Goodfellow

Chief Operating Officer, Pacvue

Vice President, Omnichannel
Research, Kantar

Co-Founder & Chief Marketing
Officer, Salsify

Director, Retail Insights, Kantar

Reid Greenberg

Jessica Hauff

Joniece Hinds

Stephen Howard-Sarin

Executive Vice President, Digital& Ecommerce, Kantar

Senior Vice President,
Ecommerce & Data
Activation, L’Oréal

Senior Manager for
Integrated Media,
Georgia-PacificVice President of Strategy
and Development,
Walmart Media GroupPaula Hunsche

Steve Kinsey

Trevor KrehelRiku Laitasalo

Senior Vice President,
Client Engagement,GroupM Commerce

Director of CommerceMarketing, GSK

Channel Marketing
Manager, Seagate

Senior Account Manager,
PacvueBob LandVlad Lubimov

Ryan Mayward

Alex Sherman

Vice President ofConsumer Experience,
Dorel Juvenile

Senior Director of
Programmatic Services,
Xaxis

Global Head of Agency
Development, Amazon
Advertising

Chief Executive Officer
and Co-Founder,
PromoteIQ

Kristina Smith

Phaedra Swonger

Kieley Taylor

Amy Vener

Vice President, DigitalMarketing, The Riveter

Project Director, Kantar

Global Vice Presidentof Social Media,
GroupM Services

Head of Retail Strategy &Marketing, Pinterest

Acknowledgements
Nich Weinheimer
General Manager
Ecommerce, Kenshoo

Editing by Ann Pariani, Kantar
Design by Daina Catanese and Charlene Hawkins, Kantar

37About Kantar: Kantar is the world’s leading evidence-based insights
and consulting company. We have a complete, unique and rounded
understanding of how people think, feel and act; globally and locally inover 90 markets. By combining the deep expertise of our people, our data
resources and benchmarks, our innovative analytics and technology, we
help our clients understand people and inspire growth.

Information and follow-up:
switchon@kantarconsulting.com
retailiq.kantar.com©2020 Kantar Consulting LLC. Some rights reserved.

The world is experiencing a dynamic and profound shift in the shopping
journey. Even without the added layer of the COVID-19 pandemic,
digital commerce has been gaining traction as a preferred method of
consumerism. Our Post-COVID Commerce report examines trends, habits,
and implications through four phases of a post-COVID world. For support
with assessment, planning, and execution of omnichannel initiatives,
we encourage you to attend Kantar’s complimentary Commerce Now
webinar series.

Catalyst is a performance marketing agency that is part of GroupM
and WPP. Catalyst specializes in cross-channel digital solutions thatconsistently deliver business results for Fortune 500 brands. Catalyst’s
industry leading capabilities include paid search, SEO, paid social,programmatic, retail media, data/analytics services, and more.

More ecommerce research from Catalyst:
In 2017, as marketers scrambled to navigate the evolving
landscape, Catalyst released one of the industry’s first research
papers, “Age of Amazon: Maximizing the B2C Opportunity,”
to provide guidance to both brands and agency marketers.
In 2018, as ecommerce quickly evolved with more retailers
increasing both their online retail offerings and on-site advertising,marketers had to navigate an even more crowded sea of
options. To further educate and support both brand and agency
marketers, Catalyst published a second research paper,“The Era of Ecommerce: Capitalizing on the New Customer
Journey” that included year-over-year comparisons using datafrom the 2017 report.

Catalyst/Kantar’s original research. Analysis and opinions are entirely
Catalyst/Kantar’s own and do not express those of Amazon Advertising or
any of its affiliates.
Amazon, Amazon Advertising, Prime, “a”, and all related logos aretrademarks of Amazon.com, Inc. or its affiliates.
©2020 Kantar Consulting LLC. Some rights reserved. © Catalyst Online
LLC. Some rights reserved.

Information and follow-up:
www.catalystdigital.com
info@catalystdigital.com© Catalyst Online LLC. Some rights reserved.