The main takeaways from Shopper 2024 in Chicago on April 18, 2024, included digital commerce insights, the emerging changes for Retail Media Networks, and how AI is impacting the media and advertising ecosystem.

For Comscore, the focus remains squarely on audiences and where they want to consume content and make purchases across screens. My colleague, Ryan Williams, and I revealed some key insights about the landscape in our annual State of Digital Commerce reports, with findings from 2023.

Digital Retail Commerce Recorded another Trillion a Year

First off, it was another record year! Consumer online Retail spend reached $1.3T in 2023, exceeding the first ever $1T year in 2022 and more than 5.5X higher than a decade ago, led by online grocery, apparel, and computers/peripherals. Inflation did have a dampening impact but only when a threshold was hit did consumers slightly pull back on spending.

Q4 continues to be huge for retail, consistently accounting for roughly 32% of total digital retail spending in any given year. Q4’23 was the largest quarter ever with consumers spending over $389 billion.

However, the growth on desktop overtook that of mobile, most likely driven by return-to-office policies pushing consumers to using desktop devices more often and an increase in layoffs which may have limited consumers’ discretionary income, making them less likely to pick up their phone and order that ‘nice-to-have' item. This saw the mobile share of total digital commerce recede to 36% in Q4’23, after reaching a high-water mark of 38% in Q4’22.

Online grocery has continued to lead in total spending after becoming the top spending category in early 2020, and showing growing strength on mobile, where it was the highest-grossing category, exceeding apparel and accessories. However, the category of Event Tickets continues to see the strongest growth. After being decimated by COVID, it has seen an incredible recovery since vaccines became readily available.

Digital and Social platforms have become critical elements to a post-COVID era, as more and more consumers discover products online creating a threat for legacy brands and a tremendous opportunity for new brands in an ‘Always On,’ ever-changing consumer world. It’s the new “virtual endcap display.” On Instagram alone, sponsored content by US Retailers and CPG brands amounted to a 118% increase in total engagements between Q3 and Q4 of 2023. Social strategies continue to be critical pathways to shoppers because that initial awareness and build doesn't just start on a product landing page.

Growth in Retail Media Networks

Retailers are increasingly investing in their own media networks, with Walmart notably opening up its previously walled garden of first party (1P) data to merchants. During the event, we heard that the focus is on sophisticated customization and full-funnel capabilities to reach shoppers more effectively. This trend reflects a move towards cross-platform advertising and measurement, with an emphasis on offering a seamless shopping experience across channels.

The scope of these efforts currently skews towards retailer owned and operated channels, which limits the advertising options merchants have at their disposal, but they are also trying to add off-channel extensions. The key challenges ahead are: 1) enhancing measurement and attribution across channels; 2) gaining a more accurate understanding of retailers’ consumers; and 3) reaching out to audiences elsewhere, at the right time and through the right channel.

AI and Data Integration

The future of retail advertising lies in leveraging AI and advanced data analytics to connect disparate datasets and optimize advertising strategies. With the impending demise of third-party cookies, contextual advertising will become increasingly important for targeting and engaging consumers effectively across multiple platforms. Real-time monitoring is another sought-after capability as it allows brands to tweak campaigns on the fly and maximize their learnings. Comscore’s Proximic solutions are great examples of products that provide real time monitoring and help brands prepare for a cookie-less world.

As Andrew Hotz, Director of Programmatic Media at Google said: “Brands are underestimating the difficulty a cookie-less world will bring. And they are not ready for it.”

Advances in AI are changing the way brands gather and activate consumer insights. It is now de rigueur for advertisers to use AI to create a holistic view of each customer, make personalized recommendations for products and services, and provide targeted offers. Yet AI’s capacity to analyze data and make complex analyses amplifies privacy concerns.

Engaging with the right audience, at the right time, and through the right channel

The holy grail of advertising is engaging with the right audience, at the right time and through the right channel. All the efforts mentioned above are done with this objective in mind. Brand owners are ultimately trying to build a wholistic and cohesive advertising strategy that encompasses the full-funnel and reaches the right audience, at the right time, and through the right channel.

The goal is to reach the consumer when they are the most receptive to messaging and learning about a product. Having a comprehensive view of the consumer, and understanding when, where and how they engage with brands is critical to developing the desired full-funnel strategy and finding the optimal multi-platform mix for a target audience.

Comscore was thrilled to be part of the dynamic line up of speakers and to present our latest research. If you have not yet seen the Comscore State of Digital Commerce report for 2024, it’s free to download at this link. Or, get in touch with me here. I would love to hear from you!