The Retail Paradigm Part 2: How brands are investing in the new era of shopping

Published on June 15, 2022
insights, whitepapers
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78% of marketers agree retail media is strategically important and 73% have changed their operational set-up to maximize the retail media opportunity.   

This original research, produced by Xaxis and Catalyst, in partnership with London Research, finds that brands are embracing retail media/platforms and evolving their investment, marketing, and operational strategies to meet the new retail paradigm.  

This report is a companion piece to Part 1 of the Retail Paradigm: The Evolution of Consumer Shopping which examined the latest trends in consumer behavior and attitudes to shopping and retail experiences. As the pandemic accelerated new consumer behaviors and market offerings, Part 2 asks: how are brands responding, what barriers do they face, and what further actions should be taken to thrive within this new paradigm?  

Key Findings from Part 2 of the Retail Paradigm

    • The rise of retail networks and DSPs is accelerating a convergence of shopper and commerce strategies: 
          • Most brands (77%) have created new marketing budgets AND shifted budgets (73%) to support e-commerce media investment. They are also increasing their investment in retail DSPs across the board. 
    • Retail media is significantly ahead of all other channels (except social media) in marketing budget growth this year. The significant increase in spend on social media can be partly attributed to retail media through investment in shoppable media, which is projected to increase by 26%. 
          • Retail media can help balance the funnel in a time where there is increased pressure on performance and short-term sales  
          • 71% use retail media to improve consideration or increase their share of the category, and more than half (58%) say they invest in retail media to build awareness or extend their reach.  
      • The full potential of this new ecosystem has yet to be realized as it is rapidly evolving and still in its early stages. Brands must have conversations with their agency and retail partners now to build understanding and strategies for both short- and long-term success. 

This report is based on a survey of 333 U.S. marketers working for brands and agencies. Marketers eligible for the survey represent companies (or clients) both selling physical products and investing in retail media advertising, with at least $50m in annual company revenues, and $2m in annual marketing budget for digital media. For selected charts we have compared this year’s findings with the results from a similar survey of brands carried out for the 2021 Catalyst & Xaxis Closing the Gap – Adopting Omnichannel Strategies for Stronger Brand-Consumer Connections report. 

The report also includes insights from a range of individuals working for brands, agencies, and retail platforms. Additionally, it draws on the findings from a survey of 2,000 consumers carried out in March 2022, featured more prominently in The Retail Paradigm: The Evolution of Consumer Shopping. 

More information about the methodology for these reports is available on request from Catalyst and Xaxis.

Missed Part 1 of the Retail Paradigm?

Download it here to learn more about the motivations behind these findings alongside additional insights into receptivity to advertising, brand loyalty, and the changing consumer journey.

Download Part 1

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