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The CPG Guys
Roundel's Shawn McGahee and EMarketer's Sarah Marzano - How Consumer Behaviors are Reshaping Commerce
00:20:37
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- [00:02]
A
Hello and welcome to the CPG Guys Podcast. Set at the intersection of commerce and tech. Your hosts, Sree Rajagopelan and Peter V S Vaughn explore how brands and retailers engage consumers in a digitally driven world. And now, here are the CPG Guys. Hello and welcome again to the CPG Guys Podcast. I'm your co host, pvsb. I also moonlight as head of Industry and Client Engagement at Flywheel, the commerce acceleration division of Omnicom. My co host is the co founder of Think Blue Consulting, the father of pop stars Riaraj and Cat's Eyes Lara Raj. Their fans of course call him Papa Raj, but to me he's my bff, Sri. This past June, Sri and I attended the Cannes Lions International Festival of Creativity. Today's episode is a recording of a conversation that took place at LA Residence, our home on the Riviera. More on that in a moment. To our audience, if you're getting value from these conversations, we have three quick asks. First, subscribe to the CPG Guides podcast on whatever platform you're listening on right now, whether that's Spotify, Apple Podcasts, Amazon Music, or anywhere else you get your podcast. Hit that subscribe or Follow button so you never miss an episode. Second, leave us a rating. It takes a couple of seconds and it makes an enormous difference in helping other CPT and retail media professionals find us. We built this community one listener at a time and a five star rating is the single best way you can help us keep growing it. And third, follow us on LinkedIn between episodes. We're publishing thought leadership, industry analysis and content you won't find anywhere else, all built for the CPG and retail community you're already a part of. Search CPG guys on LinkedIn and hit follow or just click the link in the digital show notes of this episode. Subscribe Rate Follow these three simple actions help us bring you more of the conversations that matter. Today's episode came from an activation we hosted in partnership with eMarketer. The panel is called the New Rules of How Consumer Behaviors are Reshaping Commerce. It features moderator Sarah Marzano, Vice President and Principal Analyst for Retail Media and Commerce Media at eMarketer. Sarah's joined by Sean McGahey, Senior Director, Performance and Insights at Roundel Media, Design by Target. Now let's get to the conversation.
- [02:23]
B
I'm really excited to have this conversation, Sean. You and I have known each other for most of the time I've been covering retail media and I've always appreciated your perspective on the industry and where it's headed. I also Think it's a fitting way to close out the program given Target position in the retail media landscape and the role that Browndell has played. So let's start with consumer behavior. It's a theme that's come up multiple times during all the sessions. Today you are a retailer and you have visibility into millions of consumers across categories, lifestyles and shopping occasions. From your vantage point, like, how are you guys seeing consumer behavior change and evolve? Like, where do you see threat? Where do you see opportunity?
- [02:59]
C
Yeah, happy to share. Just want to thank you for having me to see what you guys for the time. I think to answer this question, it's really important to be specific because I guess as Target we have access to hundreds and millions of shoppers and many of those shoppers are shopping at other retailers. Well, like they're not necessarily distinct, but when they are at Target they are distinct. Like shoppers when they are in our environment are there for reasons that they are choosing not to go to an Amazon or Walmart or CVS or any other retailer. They're choosing that moment. And so what we're seeing in consumer behavior is really specific to our shoppers. And one of those things is really a pursuit of holistic value. And so our guests do not necessarily come because they're exclusively looking for the lowest price. They're looking for a basket that includes, let's say lower price staples, but also something trendy or a creator that they follow on social media that might have an exclusive release within our, within our stores or willingness to pay. They're kind of gifting themselves in this specific area. And so the basket overall is looking for value, but that value has a lot of different, yeah, flavors and iterations. Just price experience is also a part of that value. And for us we're seeing the emotional experience having more value than just the functional experience. Experience like the baseline of your children stock. You know, like the cashier is nice to meet. Those are like, like the bare bones at this point. And so when the guests are coming to Target, they're, they're coming for a break. They're coming because they know it's going to be clean and that the, the aisles are going to be wired like there. And that's a part of the experience. That's part of the value that they're seeing. I would also say we're seeing kind of what we're calling like discovery fluidity. And you know, when we can, if we can talk about all the funnels collapsing and all this stuff. Right. But for a Target guest specifically, we're seeing things like the shop, the digital and the in store experience merging. Three out of four Target shoppers have the app in their hand when they're in the aisle. And that you know the channel based thinking doesn't really serve our guest because end discovery is, is incredibly fluid and so like we're taking those insights, we're applying it to Roundel. We're leaning into new new products. We're seeing within our media that if you add new at Target to your are like the sales performance goes up 15%. We're leading into our digital fulfillment opportunities to aid in that blue discovery. But if, but I'll just reiterate that it's a tremendous data set and tremendously for shoppers that we're seeing for but we recognize that it's a specific unique to Target experience.
- [05:54]
B
Yeah. I think you hit on so many fascinating components. But I love to see the coming back to the fact that shopping at Target is kind of a special experience. Right. It's a fun experience that way. And what a wonderful asset to kind of sit on. Right. Everybody jokes about going into Target spending far more than they meant to. Not for bad reasons. Right. Because they discovered things they didn't know they wanted. So that's great. It's such an asset for you all to lean into a theme that has surfaced a few times today and I think not just because I can't shut up about it but because people are actually interested in it is the way that retail media operates on top of retail. You're coming up on about exactly a year in house at a retailer after spending a really impressive stint over at Google building up their commerce media capabilities. So now that you've had the opportunity to see retail media from the inside and one of the industry's largest players, what have you learned? What surprised you? What do you think the industry has broadly appreciated yet?
- [06:48]
C
Well I'm trying to be brief as you mentioned. Yeah. I come to Roundel having created and let Google's return to your practice. My pitch that it should be somebody's job at Google to do retail media stuff. And then I have like this should be someone's job. And so I got the opportunity to create that job and lead that business for about four years. And I knew what everyone was doing in that seat and decided to join Roundel because of the incredible data set that they have. I am the captain of the market. Is undervaluing the unique scale data that Target has that's differentiated across the retail media industry. And the thing that I, that I see is that we are still undervaluing the retailer data, the shopper data as an industry speaking specifically to Target, we're talking about 100 million shoppers. We have a free loyalty so we don't have the model for cash transactions the way other members have to do because it's tied to your mobile number and it's free to join. We have a cross category view that very limited retailers have and so we can give you insights in the full basket, not just on a specific category's performance. And we are truly omnichannel where other retailers digital customer and their in store customer are completely different customers. But for us, As I mentioned, 74 have the app in their email.
- [08:19]
B
That's amazing.
- [08:20]
C
I'm the captain of picking up something from drive up and then parking and going inside the store. Right. And so we have a very unique omnichannel perspective. And even with us in Brown Bell, the majority of our data conversations are measurement and targeting. And there's so much more we could be doing as far as creative messaging, testing, new product discovery, new product frameworks like you really should be coming to your retailers as key testing ground for what you want to do from a national standpoint around messaging and product and packaging. Customer lifetime. There's like a bazillion things.
- [08:56]
B
Yeah.
- [08:57]
C
We can do and we are still underestimating that. Primarily using it to close the lift.
- [09:04]
B
Sounds like some exciting things.
- [09:06]
C
That's why I'm here.
- [09:07]
B
The cash transaction being the same. Fascinating. I imagine that gives you more granular visibility into certain demographics and geos that are really difficult for other retailers to get to in that precise way. So that's. That's fantastic. But also your notes around being a true omnichannel retailer. Key me up to the thing I wanted to ask you next which I think as an industry we've come a long way in terms of recognizing that our customers don't think in channels. Right. They think I'm making a purchase from Target and maybe I visited the social site and then is it the website that I went to store and then I said to ordered online English. Right. Like there's. And they're. They're just saying that was a Target experience. Right. Even though we're sort of largely industry recognizing that's how consumers behave, both brands and retailers and agencies sometimes still tend to organize teams, budgets and strategies in these silos. So why do you think that gap persists and how needs to be done to actually change this?
- [09:59]
C
You know, change is hard. I think this is the main thing and There's a lot of infrastructure and process and inertia that has been built around like the channel framework. And it's hard to just let all that go to go truly guest first to channel agnostic. We as a groundel we find ourselves on being a guest first design forward retail media network. And so for us with that orientation it's built into our ethos and so it just kind of we are living that value day in and day out. But we have like sympathy because a lot of these things were, were not built with a similar ethos. It may have been, hey, retail media is hot. Let me throw some tags on my site and start monetizing. And standing on the margin of that channel is more important than the experience of the shopping customer. But I think we, you have the benefit of having that that ethos Y squarely even how we want market has been more oriented towards here where our guests are. And so that's where our media is going to be to be helpful towards that experience and not just here's where our margin lies. And so we're going to double down on this channel or that channel for that purpose. But you know it's, we'll be, we'll be talking about this at can next year, you know, getting more guest focus, getting, getting out of the silos. But that it's. I think the strategy comes before the infrastructure. You're strategically approaching that way you can, you're absolutely.
- [11:31]
B
I think the complexity of sort of embedding is rounded to your core value set. In a large organization to be understated, to be able to start from that foundation is so, so crucial and important. I think part of Randall's growth story as well has been a willingness to expand and test in new environments. A couple of panels ago we were talking about how retailers were the first movers in terms of investing in some of the newer surfaces. I know off site media somewhere. Target was an early mover. To have a core pillar of your offering. You've been quite outspoken about how you're experimenting with emerging AI powered discovery experiences. Let's take this back to the organizational culture. How do you think about identifying opportunities worth leaning into before the rest of the industry has fully figured them out? And then how do you make sure that you're keeping your eye on the foundational components? You're not letting these new opportunities become distractions.
- [12:26]
C
As I mentioned, it goes back to our strategy that we're guest first. I think as you talk about why we were first to market when it comes to off site, I Think the industry overall, 21% of the mix is off site. And we tend to lean about 30 to 35% of your mixes is off site. Because through our knowledge of the guests, that's where they were. That's where they were discovering products. And so that's what we needed to be. Even as we talk about OpenAI and ChatGPT, we were actually the first retail media network to have an offering within Chat GPT. It wasn't because we have to say AI five times because they're market. It was fundamentally because we saw that Target traffic from OpenAI was growing 40% every month. And like, it's just a fact that the increase of traffic that we're seeing, our digital experiences, we're coming from that channel. So we need to be in that channel to help with that discovery and to drive and to drive, you know, the guest experience in that, in that space. And so maybe we could be more operationally rigorous than we, than we have been. But it's aligned to our strategy. Like the strategy says, we are guest first. This is where the guests are, this is where we're going. And then we're very willing to test, fail, fail forward and move and alignment with that as first approach.
- [13:45]
B
We had Lindsay from Outworks on some stage earlier and she mentioned not letting perfect be the enemy of the good. Right. So that feels really salient here as well when it comes to testing these new AI just every environment. What are you hearing from brands? Are they moving quickly? Are they begging you for a chance to show up that way? Like, are they terrified what's coming? Is there a mix?
- [14:06]
C
Especially I'm on the measurement side of our business, right. And so I get all the conversations around your CPMs and your cost and is this efficient enough and how effective is this? You're like, oh, we want to test this thing in OpenAI. They're like, we don't care about CPMs. Like just, just get us in there overnight. Like they don't care. But I do think that the interest in the energy in the space delivered a willingness to experiment. And then our story of we're not doing this because it's, because it's impact. Look at this guest insight that's telling us this is the right thing to do has allowed, has garnered a lot of brand and advertiser interest. And it just makes me laugh at the amount of rigor that happens in most other channels. And then the just the general, yes, caution to the wind, you know, approach that we see in this approach.
- [14:57]
B
But how exciting you have that willingness to just like hold hands and do this together. Absolutely, yeah. How will you measure success right now
- [15:04]
C
with the early stage that we're in with that activation specifically? Really, it's around can we meet the yield and the demand that we want it to be. And I would say these platforms are also testing, so it's not as scale from an advertising standpoint as we would like. So the primary focus right now is can we get more visibility in that channel as KPI number one? And then we are a very incrementality first organization. We have a suite of bigger mentality solutions that we use to triangulate what's actually dropping the bottom line. And we're including that in the, in the mix so that we not only understand how the ChatGPT driver results, but what does it add across our whole channel.
- [15:47]
B
Yeah, that'll be so exciting to hear more about as you guys continue on this journey. Something that, that sort of also keeps coming up, I think we're going to hear more about it this week is that marketers are trying to keep up with this extraordinary pace of change. Right. And you've alluded to this a few times through our conversation. I wonder what you see the role of retail media organizations playing in helping brand partners separate signal from noise point in the right direction, stay really efficient in terms of where they're putting their efforts.
- [16:14]
C
Yeah, I think encouraging the mindset that you can come to a retail partner to separate signals from. No, as I mentioned right now as a lot of advertisers are leaning into retail media, it's for the purposes of, let's say a seasonal campaign or a specific moment or they want to be on the digital shelf. And so they're doing search ads and TPA like product listings and things in that space. But often they're not coming to their retail partners. We have this hypothesis. We want to understand what message is most likely to convert a shopper and recognizing that we're not talking about a panel, 10, 20, 30 million, we're talking about 100 million real life people buying stuff and that we can go to that as a data source to answer those questions. And I don't think we get those type of questions at scale in the industry, but we, but, but again, I think it's being guest first is leveraging the full value of that shopper data as opposed to just measuring the, and the campaign results for a seasonal push.
- [17:20]
B
Yeah, I think that's, that's a fantastic perspective. Right. Because retailers are a pragmatic bunch. Right. You're looking at what groups, products, what corrects results. And as you harness the power of your data right. You become even more valuable in terms of someone to turn to. So I love that and I think that is that I'm going to give you one more chance to have the last word here, the very last word. But I don't know, you're going to have trouble topping that one. We're the last panel. So if there was one thing you want everyone in this room to kind of walk away having top of mind. Yeah, we love it.
- [17:49]
C
I would say channels change, tech changes, the can buzz up. Word of the year will change. At the end of the day, we're trying to move products off shelves. We're trying to influence human beings to choose one brand versus another. And so considering on the customer experience is the is the thing that will persist. I think I'm proud of how Roundel is the leading a very forward approach. But as we all leave this room and hear a thousand pitches on the reset, you know, it's important to really remember that if it's not, if it's not a shocker at the heart of whatever we're talking about coming back to
- [18:34]
B
that north to start, I love it. Love it. Thank you so much, Sean. Thanks everybody.
- [18:41]
A
To our listeners and the over 46,000 followers on LinkedIn, thank you for doing what you do every day. Whether you're building brands, driving retail partnerships, deploying technology, or shaping the future of commerce, you are the industry we cover and this podcast exists because of you. If today's conversation sparks something for you, a new idea, maybe a fresh perspective, or just a reminder of why this industry is worth showing up for every day, share it. Tag us. Tell a colleague. The more voices we bring into this community, the sharper all of us get. Until next time, keep pushing the conversation forward. I'm PBSB on behalf of my co host, Paparaj. This has been the CPT Guys Podcast. The content in this podcast episode is provided for general informational purposes only. By listening to our episode, you understand that no information contained in this episode should be construed as advice from CPG Guys LLC or the individual author, hosts or guests, nor is it intended to be a substitute for research on any subject matter. Reference to any specific product or entity does not constitute an endorsement or recommendation by CPGuys LLC. The views expressed by guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. The views expressed by CPTGuys LLC do not represent the views of their employers or the entity they represent. CPTGuys LLC expressly disclaims any and all liability or responsibility for any direct, indirect, incidental, special, consequential or other damages arising out of any individual's use of, reference to, or inability to use this podcast or the information we present in this podcast.