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Behind the Numbers: an EMARKETER Podcast
Screens, Shelves, and Signals: Retail Media's In-Store Opportunity | Behind the Numbers Special Edition Podcast
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Foreign.
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Hello and welcome to a special edition episode of the eMarketer podcast, behind the Numbers. I'm Marcus Johnson and today I'm introducing a special episode recorded at the eMarketer Commerce Media Trends 2026 virtual summit. In this episode, our panel of experts discuss digital screens and audio connecting in store exposure to purchases, attribution challenges, retailer infrastructure investments and shopper experience considerations. EMarketer Vice President and Principal Analyst Sarah Marzano Host Gabby Valjoan, Vice President and Head of Commerce at Nestle Health Science and Austin Leonard, Vice President and General Manager at DG Media Network. Enjoy.
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Hi everyone, I'm Sarah Marzano, principal analyst and VP overseeing retail and commerce media here at eMarketer. If you've been with us since earlier this morning, you'll know that we talked a bit about how retail media here in the United States largely wasn't built with physical stores in mind. We took a look at how measurement and organizational design and the like are contributing to the reinforcement of that constraint. I'm really excited for this panel which has been made possible by Dollar General Media Network because we're going to get the opportunity to go a level deeper. We'll move beyond the research data and get into some lived experiences and examine how that reality is actually showing up inside a retail media network and a brand organization that are actively working to scale in store. So some great perspectives here. Joining me today are Gabby Fillion, Vice President and Head of E Commerce for Nestle Health Science, and Austin Leonard, Vice President and General Manager of DG Media Network. Gabby Austin, welcome. Thanks for having me.
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Hey Gabby.
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Awesome. Let's get started. So one of the things I talked about in my keynote and we illustrated with eMarketer forecast data is that digital in store retail media remains a very small share of total retail media spent. But at the same time, you know, one thing we didn't dive into and I want to now we know physical stores have long had established in store marketing environments, right? Leveraging more analog content formats like shelf signage, displays and sampling or other shopper marketing activations. So that's important because the opportunity we're talking about now isn't simply about adding digital formats into storage stores. It's about determining how those formats integrate with everything that's already happening in the store. And I think success is going to largely come down to whether that integration is coordinated or fragmented. Austin, at Dollar General, you're layering scale digital in store formats on top of an already really well established in store environment that includes shelf signage and long standing shopper marketing partnerships let's hear more about how you're approaching integrating newer in store media so that it works in sync with those existing programs rather than feeling fragmented. And then if you could tell us a bit about some of the challenges that you're seeing and the benefits that come with navigating that type of complexity with thoughtful integration.
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Absolutely, yeah. So for those that don't know as well, we are America's neighbor General store. We have more than 20,000 stores in the US and 75% of Americans live within five miles of a Dollar General store. So we've got a really big footprint, as you called out. We also have a very strong foundation in our shop marketing tools. So we've got proven robust shelf signage at the point of decision with shelf ads right at each product on the shelf. We've also got aisle shelf talkers and signage throughout the store. So we do have, as you said, a very robust ecosystem already in place in our stores as we've been continuing to build out our digital business as well. So one of the biggest areas that we're excited about is actually In Store Radio. And to your point around, how do we think about this working with our existing tools is that we think that audio really complements, not replaces existing signage. It extends and reinforces the messaging throughout the store, helps our brands be able to tell their story a little bit different. Also, very importantly, we think it makes the store experience even more enjoyable and engaging for the customer. So we think it actually fits into the experience, the ability for us to help our brands grow.
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And.
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And it's an amplifier of what's already working. And think about scale and reach, which are very important parts of layering on tools for our advertisers. Like I said, we've got almost 21,000 stores. There's a massive reach and massive potential for us. As you think about how that comes together, what we have seen is that when you start to layer in the digital tools, you've got the in store signage and then some of the other tools are working on. Like I said, with In Store Audio, what you start to see is that the impact really compounds. So there's a lot of benefit to going full omni, as we like to say, we're actually seeing double the sales growth versus the total store. We're also seeing 80% higher growth versus the rest of the departments for partners that are using all those campaigns and all those tactics together as a unified tool and unified execution. And part of that is because it helps the consumers really move seamlessly between digital discovery and in store decisions. It helps, you know, digital helps build the intent in store, helps convert at the shelf and obviously the reach and frequency helps to drive more results. And when you've got in store digital working together, brands can grow faster. Now that's a lot of benefits. There's, as we'll talk about, there's, there's challenges to helping to make sure that those all come together. Right?
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Yeah, no, absolutely. You touched on so many things that I think are quite fascinating about in store retail media and in store media in general. Right. Is that it's such a multi dimensional shopping experience, experience for the consumer and that gives us access to so many new formats and ways to reach the consumer that are really different from the online experience. But you have to think really thoughtfully about how all of those things come together. And that tees me up. Well, for, for Gabby, what I wanted to turn to you on, we talked during our prep call about alignment in terms of the shopper journey coming together holistically versus being planned out shopper by channel, shopper by or sorry, channel by channel.
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Right.
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Because for the shopper it's one journey. Right. They're not thinking through, oh, that was my experience and now I'm part of my in store experience. And those can be completely different. So you're in this every day. From a brand perspective, can you tell us what a well orchestrated in store and digital activation looks like when it's working and how are you testing and measuring how it's enhancing the shopper experience?
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Yeah, absolutely. Look, we are all consumers ourselves, so sometimes we just need to put ourselves back in that consumer footprint and realize what that connected consumer journey looks like. Great in store retail media to me is it shouldn't feel like media. It should feel like this seamless enhanced shopping experience, not be distracting, not be disjointed. And you're really taking the entire ecosystem of someone who might be researching online, but checking out and that conversion is in store. And so it is a seamless experience, no matter about whether you are deploying an online retail media campaign or an in store one. For us as the brands, as the advertisers, that's our responsibility when it comes down to making sure that we have one continuous shopper journey. So it should be one brief and it should be that brief should be kind of consistent across the different teams that might be deploying it. So I could get into, I could totally geek out into org design and operating models, but that comes into a lot of where the friction I see from the brand manufacturer advertiser side, the friction does end up coming in is, you know, different teams, your E commerce team, your retail media team, shopper marketing, then your the folks that own the relationships with the retailer as well. Do they all have different incentives, all measure different KPIs and that often comes into where I see the deployment execution of what should be one holistic campaign falling apart a little bit when, you know, when you look at how it ends up getting deployed because of those different teams, the different silos. So definitely something that is a passion area of mine, a big annoyance because again, if we're all taking a step back and putting ourselves, our consumer hats on, it's kind of easy to see where it falls apart. But sometimes we get caught up as the advertiser a little bit into well here is my digital retail media campaign and let's just paste that into an in store format. That doesn't always work.
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Yeah, no. Without putting words into your mouth, I feel like it's tough to move from a world where this is how we've always done it right to this is how we need to start doing it in the future. And I'm going to give both of you a chance to geek out on org design and silos and the way teams are incentivized. So you're not going to get off the hook on that one because we're going to be talking about that. I feel like it's an arena that's putting pressure on both the buy and the sell side, but also creates a lot of opportunity for the folks that want to want to manage it. But before we do that, one of the things that we looked at in my keynote earlier today was a survey of the commerce media ad buyers who are buying in store retail media today. And what they, what they have sort of communicated is that they've been explicit about what would unlock additional spend being improved measurement and attribution. And what's happening is that at the same time in store performance is often evaluated through e commerce oriented frameworks. Right. Particularly because of the way retail media grew up in online environments. And then we've got many activations also in store starting as relatively small pilots. So there's a combination happening here that's almost this self reinforcing constraint cycle around how do we actually scale this thing and get it out of a pilot phase. So the challenge becomes designing measurement approaches that reflect the physical retail realities and then deploying formats at scale large enough to produce credible signal. So Austin, like that 20,000 store number always stops me in my tracks. Every time we talk. So I want to come back to the scale that Dollar General has at its fingertip tips. You mentioned that you've deployed in store audio across thousands of Dollar General stores. So you've got a scaled activation in market today. How are you structuring measurement so that the results are rigorous and they feel credible enough to support broader advertiser investment to meeting advertisers where they are and really delivering those results that they're asking for?
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Yeah, I think the first part is let's recognize obviously that we're going, we're bringing two worlds together that are converging. So in digital closed loop it's a lot more of a one to one measurement. Whereas when you get out of the digital experience and into physical experiences, it's a one to many. So the first thing that we did is we obviously spent a lot of time listening to our advertisers and hearing from the teams that are executing these shop marketing tactics, especially around the in store tactics and just understanding what methodology they trust, how they're measuring campaigns. And then we worked with within the IB guidelines to create match market for our methodology across all the in store activations. So we create a holdout group based of stores based on factors including annual sales, store type and assortment. We then look at incrementality as we compare the measured brand sales across the group of stores that featured media versus those that were in the holdout stores and then look at the course of the campaign. Obviously the advantage we have is with having such a wide network of stores we can do a lot of testing, we can actually look at how does this look across lots of different types of GEOS activations regions because we've been doing it for a long time for our in store signage and everything that's happening at the shelf already. Bringing that into some of the newer tactics like in store audio and bringing those campaigns together has been a relatively natural and easy lift because we've got mature methodology. We ran some case studies already for some of our campaigns. We actually partnered with with a company called Income Payments. They do a lot of our gift cards. And so during the peak holiday season we wanted to give them an additional way to drive incremental gift card sales and we were able to help them run a pilot campaign. We actually drove $278,000 in incremental sales and we reached 275,000 unique shoppers per week while they're actively shopping, able to reach them right at point of sale and saw a very strong incremental return on ad spend of 557 directly attributed to in store audio. And that helps us start to bridge the gap between the digital tools that we have and obviously the in store tools when you start to get some of those metrics together.
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Yeah, you mentioned something there that I want to make sure that we sort of shine a spotlight on which is leveraging the muscle your organization has already developed in terms of understanding how some of the more traditional shopper marketing tactics perform in physical stores and taking that expertise and using it to drive how you're introducing more digital formats. And I think that's so important when I say it, it sounds obvious. Right. But what we see in terms of the way retail media teams again have been built historically where they sit in organizations, we're not necessarily seeing that best practice being reflected in the go to market today. Right. In terms of the media folks really understanding how retail works, the tools that are at their disposal. So I think that's a huge learning that you've just given our viewers that people can really do something with. Gabby, from a brand's perspective, something that I was thinking about when I was putting this all together is the fact that when it comes to building out digital media in physical stores, retailers need brand partners who are willing to participate in tests and do be experiment partners. Right. As they're trying new things and working to build out the evidence that they need in order to scale that. And so I'm curious, I want you to give us some insight into the decision making process among your teams. How do you decide when to lean in early on an in store test? What are some of the things that give you confidence that a retailer or their retail media team is a credible partner that's worthy of that experimentation? Right. You probably can't do everything every retailer wants you to do, right?
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No, absolutely. And often that ends up coming. Whilst I would love to always have a dedicated budget that is for testing and new formats and things that might just pop, pop up during the year, it often ends up coming from the expense of the core budget too. So we really want to be super intentional with that. I think, you know, the, the biggest thing for me is I am a huge fan of testing and learning, but at the end of the day it, it of course needs to be something that we can scale so we lean into tests. When a couple of things are true, the test design is really clear to us. What are we trying to solve for? Is the behavior we're trying to change or that we're trying to tap into? Is it ultimately Solving a real shopper problem or is it just adding another format in the store? You know, if you're doing an audio run and, or you're running an audio test and your shopper is not at the areas that they can actually hear it, you know, you're just adding something to be able to disruptive in Austin that is absolutely not a DG dig by any means, since you brought up, since you brought up audio. But at the end of the day, are we solving a true shopper problem? Measurement, of course. And that can be really hard to figure out when something is a new and incremental test. But something that has an actual example for us would be the select stores that they were running a test on. Where are the zip codes? How did you choose which stores? What was the, what was the decision making behind that so that I can really understand what's the unique demographic of that store? And so, you know, one, one specific case for us is there is a brand that indexes incredibly high with the Hispanic community. And the zip codes being tested indexed really high as well with Hispanic community. So I said, okay, well that, that makes a lot of sense as well for why you, you, why I would want to lean into those zip codes that, that you guys were running the tests on. And then look, ultimately everyone wants part of the budget, but the transparency and the partnership mindset that we're not just having another ad format, we're not just being sold another media buy, but you know, it's actually building towards a long term partnership. That sounds, again, it sounds like something that should be true, but oftentimes it's being sold at or pitched at instead of. Here's our long term vision of why we're testing this new thing. Here's how it fits into our total ecosystem. Here's how it solves a problem for our shopper that's coming in or makes their lives easier. And not everything is pitched in that way, but it's definitely received a lot better brand on the advertiser side when it is, you know, share the learnings, even if the learnings weren't perfect of what are you guys looking to do in pivot? Because we are also looking to change and pivot if a campaign's not running perfectly or the way that we thought it was going to when we had our hypothesis at the beginning of it. So I think those are the three areas that really make us want to lean in. If, if we've got the, we can check the boxes in those three areas, but it's, it's always a tough one when we're carving out budget from something that might be a, a proven campaign structure. For sure.
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Yeah, no, it's, it's such a good point. And I think it's like if a retailer, retail media network is looking for a partner, then it needs to be presented as something that is a mutually beneficial offering. Right. Are both sides going to learn? And I think your point again, you know, I can talk about this at length, but about formats is so fascinating. Right? Because for an on site retail media network, everyone should have sponsored search ads. Right? We got to do that. But when it comes to physical stores, we need to think through does audio make sense here? Do smart carts make sense here? Does some sort of mobile app integration make sense here? What's the consumer journey? What's the benefit? What's the problem that we're trying to solve? And it gets a little bit more complex and strategic for, for in store. So that's a piece that needs to be considered as well. And with that, I'm going to bring us back to the topic of the organizational friction and the silos because there's relevant pieces on both sides and in store and the potential there and the fact that it's been a little bit slower to take off from a digital side. And he is putting really a lot of pressure on this because in store retail sits at the intersection of media merchandising, store operations, shopper marketing and analytics and probably way more teams that I haven't even mentioned. And so while retail media has always required coordination, like I said, in store really raises the stakes. Right. And I think the difference is an online environment. Media teams can often operate within more contained digital ecosystems. You can do a lot with a little. And in store just doesn't work that way. So during our prep conversation, we spent a fair amount of time on this. I think there's passion all around the table here around internal alignment as a cross critical factor in weather in store scales. So Gabby, we'll start with you. During our prep call, you described this as a misalignment of incentives. You mentioned it early in the conversation today. And we know that friction often starts internally. So what have you learned on your end about where in store retail media most often gets caught between teams and like, what steps are you taking to address that within your side of the organization?
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Yeah, absolutely. You know, in store retail media, you kind of hit the nail on the head there that retail media has, has always had to try and figure out where does it sit who's the best at Deploying it in store retail media just absolutely explodes that from my experience on the brand, on the advertiser side, it just exposes the core issue, not really creates it. And misaligned incentives for me are things like E Commerce team is looking at. They might be looking at ROAS or they're looking at all these digital KPIs and shopper marketing team is going to be focused on specifically on the in store activation. And then the sales and trade folks are going to be thinking about that retailer partnership and JVPs and they're focused on the, the volume getting out. But ultimately all of those things work together. Right. But we're looking at them separately depending on who the team is and what their focus areas might be. And so one area or one way to solve that is a shared brief for an overarching campaign. And how all different ways we might be deploying something, whether it's the online part of the retail media, whether it's in store part of that, whether it's just an overall new innovation launch, is what's the end goal and making sure that everyone, even if they're deploying different parts of that, understands and is signed up to that. And then if you as an organization could go so far as to making sure that the targets that are set by teams and the bonus structure and whatnot is when the collective wins, we are all winning here. Oftentimes when I go into year end goals for different teams, they are so siloed that it's just exasperating this problem. But at the end of the day, I think, I think the leadership really needs to have this joint conversation. They're the ones that will oversee the different org structures and the ways that the teams are working together. But taking ourselves out of what my day to day looks like, what my specific year end goals might look like, and putting myself again in the shoes of the shopper, making sure that we're ultimately not being disruptive to that and understanding this might be an awareness play, this might be a conversion play. Here's how it actually all works together.
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Yeah, so much good stuff there. And I think we all know that change management within an organization, especially if it's a larger organization, is tough and painful. But I think you've painted a couple paths to where those efforts can be sped up. Right. Which is making sure that goals at least feel aligned. Right. They're not directly in contradiction to one another. Creating a zero sum game where the success of one team is coming at the seeming. Right. And I think your point about bringing it back to what are we trying to do with the consumer is has to be the guiding light and the guiding principle here. Austin, something you said when we were prepping for this conversation that stuck with me is that from what you've seen, retail media teams often end up speaking primarily with digital commerce counterparts on the brand side, while you sort of recognize that in store budgets and influence might sit elsewhere. Right. So from your perspective and from your experience at Dollar General, how are you working to ensure those in store conversations are happening with the right stakeholders so that the initiatives can move beyond tests and really scale effectively? That seems like something that probably is quite complex to navigate.
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Yeah, it's absolutely complex. And Gabby called out a lot of things that I also truly believe are both opportunities and key decision factors as you're trying to go through that planning process. You know, first of all, you do have to start with the right stakeholders. You have to make sure that you're not just talking to one group, a digital group or a shopper marketing group only, especially if you're an Omni retailer like Dollar General is, you're just going to have a lot of different pieces to pull together. The most important part is, yes, what is the shopper experience going to be? What are we trying to accomplish as a retailer and the brand together? And then obviously, how do we make sure that the investments are driving the best outcome for what we're trying to do? Typically, as Gabby said, there's not always someone that owns the full funnel outcome other than the head of sales or cmo. And so making sure that we're trying to think through that lens is always really important. Making sure we've got the merchants aligned is really key as well. Both the anyone that's going to be working in store and online. And then finally, like when you are focused specifically on the in store activation, it's not just what is the activation that's happening in the store, it's what is the journey the customer is going on, as Gabby called out rightly so, is we know that shoppers are more digitally engaged, we know that there's a lot more sales happening digitally, but brick and mortar is still by far the biggest place where transactions are happening. So how do you help influence the shopping trip ahead of time with digital? How do you make sure you reinforce that messaging with the in store tactics you have? And how do you make sure that you've got the right priorities with your merchant teams to make sure that from aisle to app, you're telling the same cohesive story to the customer.
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Yeah, no, absolutely. So just a few things to manage and keep track of. I love it. So we, we talked a bit about how diverse the formats for delivering in store retail media can be. Gabby, I would love to hear from you. Like, do you have a format that you're really interested in that you'd like to see retailers introduce in a more widespread way? Or how are you kind of evaluating things when someone comes to you and says like we're going to launch audio, we're going to launch digital signage, we're going to launch an app integration. Like how are you sort of thinking through that and what should retailers have in mind?
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Yeah, look, before I get into that one, I actually want to riff off two things that Austin said. You know, one, often e commerce and the online experience is touted as the fastest growing but for us in our categories, it's still two thirds of the sales are coming from in store. And so that's exactly what Austin was saying. And then one might be a tip for the retail media networks. I've had some, some of our partners come to me and actually ask, hey, who's the decision maker in these things? Or what are, what budget does it come out of to your team and other teams? And I have no confidentiality reasons to not say, yeah, look, I own the execution of this, but I'm having to pull it from a budget in this team and so I have to negotiate with them internally. So let's make sure that we get them on the phone so they understand why we're asking them to pull some budget out of something else that they might have planned. And so anytime I've ever been asked that by a retailer or retail media network, there's, there's no reason for me not to say, let me make sure that I'm actually getting the collective, all the folks on the phone on my side or prompting back to me to make sure that I'm pre aligning with those folks. So you know, maybe for the, if there's any retail media networks folks that are, that are in the audience, that might be something that's helpful. There's no reason for me not to, to work with you in that way. And I think that that has been helpful. Sometimes big CPGs and companies all, we all have different org structures, we'll operate a little bit differently. And sometimes it's just a little under the hood. How do you guys work on your side of the fence? You know, and asking that, I think
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it's such a good point. Like these aren't state Secrets that are being guarded under lock and key 100
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but it absolutely helps both sides to understand it. We do the same. You know, we'll ask and figure out how are you guys working across your different teams? Does the left hand know what the right hand is doing? And that's a very easy, approachable and partnership question I think to ask that often ends up having some really healthy conversation.
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And it's also called, it's the right call to action too. For on the retail media side is that in store execution is a different skill set than digital execution. So training, education is required. Subject matter expertise is really important. So a lot of the RNs that started digital only and then they're trying to get an in store, you don't sell it the same way.
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C
So yeah, absolutely. Sarah, riff for too long. You're going to need to remind me about what you were asking.
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We're going to set it up as a little bit of a rapid fire round because I kind of think I could talk to you guys forever. But our audience maybe doesn't have forever, which is fine. I want to hear from each of you what emerging in store capabilities or formats you feel sort of excited to explore in the Next, let's say 12 to 18 months. Gabby, we can start with you.
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C
I love audio and the reason I love audio is, look, it doesn't always work in every environment, so that's not a blanket statement. But the reason I love audio is I have a little bit of a passion for psychology as well. And when you have audio, your brain fills in the images about how this
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fits in my life.
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C
And when you're looking at something visually, you might not see my personal representation in that visual ad, whether it's a still or a video or something like that. So you can have phenomenal visuals too. But I love how the brain will fill in. It's a Malcolm Gladwell nod to audio as well. So feel free to geek onto that a little bit more. But I fully believe that you and your brain will fill in what is most relevant for me when I hear something and I'll picture myself using this tool or product in my day to day instead of seeing a usage that might not be perfect for me. So again, it depends where it fits in the shopper journey and is it deployed well, is it a good execution of it? But that is, that's an ad type that I'm a fan of.
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A
That's such a good perspective and I feel so validated. My E marketer colleagues make fun of me for being obsessed with the potential for in store audio. So I feel completely validated. So I appreciate that. Austin, what about, I mean, obviously you're bought in on audio, right? Audio.
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B
I actually started my career in radio. Threshold Radio, the original Omnichannel. We love it, but there's for us specifically, it fits our formats really well. So our average store size is between 7,500 to 8,500 square feet. So for us, like we've got a lot of products in there, but it's also a tighter space for us to be able to set up audio. So that to Gabby's point earlier, when we're delivering ads, you have confidence that it's reaching the entire store and that it's having an impact on the consumer and their journey. We also love the turnaround time and from a creative standpoint, building a 15 or 30 second spot where you can actually let the brand tell their story and it matches up to what they're hearing on national radio or their TV commercials. That becomes a much easier thing to execute when you've got the in store audio format. And again from a consumer standpoint, like there's, there's. It helps support a better shopping journey because of the, the music that's there and also gives them a message, helps give them something whether it's a promotion or a new product they didn't know is in the store, they can get there. I, I would re. Be remiss though as we're also super excited about what we're doing in community sampling. So we don't have a lot of of sampling programs within our stores, but we're connected to so many different communities around the US that we've built out this program with a company called Recess and allows us to do full end to end community based sampling that connects the shoppers in our local communities back into the stores and that becomes an extension of our own and operated connection to those consumers. So audio and sampling, but we're doing a little different on both.
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A
Very cool. Lots of good innovation there. This has been so great. Gabby, Austin, we are out of time. I want to thank you for being here. I know it's such a fun conversation and I'm going to insist that you both come back soon and keep track of how all of this is developing. Thank you both for being here.
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C
Thank you.