Retail media – advertising across a retailer’s website, app, and store ecosystem – has taken the world by storm in recent years. In fact, U.S. Retail Media Networks are anticipated to exceed $52 billion in ad sales by 2023 according to a recent eMarketer report. By now, we know it’s critical to have a solid retail media AND retail buying strategy in place – but how do the worlds of retail buying and retail media intersect?
We sat down with Scott Glaser, Associate Director of Marketplace Strategic Services at Tinuiti to get his take on the future of retail. As a former buyer for retailers like Macy’s, Ross, Zappos, and Walmart, Glaser knows first-hand the importance of a fully integrated approach in the retail media (and retail buying) landscape.
Q: What is a retail buyer?
Glaser: A retail buyer is an individual who is financially responsible for managing a certain product category or department at a retailer. Depending on the retailer, the title of a buyer may be different. I’ve been a Buyer, Category Manager, and Merchant, for instance, but they’re all essentially the same role. Retail buyers generally have a budget that they buy to and a certain set of financial metrics that they’re tasked with meeting and exceeding.
The ultimate goal of a buyer is to buy the right product, in the right colors/sizes (if applicable), at the right price, and ensure it’s in the right place (store or online) to meet the customer’s needs. Some buyers buy products that are currently available from vendors. Some buyers buy products that they need to create from scratch with help from vendors. Ultimately, it all comes back to the customer and ensuring you’re delivering on what they want/need.
Q: Can you share your background in the retail buying industry?
Glaser: I started my career at Macy’s as an inventory planning intern, which meant that I focused on allocating units by SKUs to each Macy’s store for my specific department. It was a rewarding experience in that I was able to learn more about the customer and how many moving parts are involved in order to get an item from initial buy to the customer’s cart. I was then offered a full-time buying position at Macy’s via Macy’s Executive Development Program (EDP), a training course that reviewed the A-Z’s of retail.
I worked as an Assistant Buyer in Confections and then as an Assistant Buyer in Men’s Premium Brands. At Macy’s, I learned a lot about negotiating with vendors, analyzing reports to better understand the customer, and so much more.
After Macy’s, I joined the buying team at Zappos. This is where I learned a lot about ecommerce, and putting the customer at the forefront of all decisions. From there, I took a buying role at Ross Stores. I learned the ins and outs of off-price retailers. I was in Young Men’s Fashion, Premium Men’s, and Men’s Outerwear and Swim. I spent my time at vendor appointments negotiating deals for closeout (discounted) inventory, managed large financial portfolios, and built private label programs to take advantage of key trends at compelling price points.
To round out my journey in buying, I accepted a role to lead a merchant team at Walmart ecommerce. I originally was over Walmart.com, Jet.com & Shoes.com where I bought backpacks, sunglasses, luggage, kids’ footwear, and seasonal men’s and women’s footwear.
Q: How do retail buyers measure success?
Glaser: Every retail buyer is measured against their sales and margin plans. It’s also the job of a buyer to manage their inventory, and this is measured in the form of turn or sell-through (depending on the retailer) and receipts (dollar amount of the goods you bought). It’s important for buyers to purchase products based on what’s in their budget (receipt dollars vs. receipt dollar plan) and sell through that product once it’s in the store/online (turn or sell through %).
Buyers have the ability to take markdowns to accelerate sales, but this conversely drops their margin lower. It’s an analytical balancing act for a merchant to manage their receipts, sales, turn, and margin to ensure they’re meeting all financial goals while delivering the best possible assortment at the best value to the customer.
Q: How has the role of the buyer shifted or changed over the years?
Glaser: Off-price retailers and ecommerce platforms have shifted the way customers shop for products. Traditionally, department stores were ideal destinations for brands because of their reputation, foot traffic, and sales. With the growth of ecommerce and the rising popularity of off-price destinations, department stores have experienced headwinds over the years.
As a buyer, it’s important to understand the changing dynamics of the retail industry but also the macro-economic shifts as well. Buying for a department store is very different from buying for a small, DTC ecommerce brand. The goal is to understand your customer and what they want and deliver it to them. Simple goal but not always as simple to execute on. It’s not always about having the cheapest products, or conversely having the most luxurious brands. It’s about understanding what your customer will want in the future, and at what price point, and either finding that product in the market and negotiating for that price point or directly sourcing to manufacture the goods for the customer.
Q: Where does retail media fit into the current landscape (for buyers) and in the future?
Glaser: Currently, there are a lot of opportunities for buyers to be more involved with retail media. As retail media continues to grow, I imagine that the successful retailers will figure out a way to integrate the buyers into the media planning process. Right now, generally speaking, there is a disconnect. Agencies and brands may be looking at their media spend in a vacuum. Buyers may be looking at the brand growth in their own silo. The trick here is to merge the two together and get the buyers, brands, and agencies (and retailer media arms) involved in conversations about future planning. For example, media spend may need to change drastically if the buyer is growing or decreasing the brand’s business drastically. Currently, there is a lot of opportunity to get all of these parties working closer together throughout the process.
Q: How have you seen retail media evolve over the years?
Glaser: Retail media is definitely playing a crucial role as ecommerce becomes a bigger piece of the retailer’s pie. I remember being part of retailers where ecommerce was such a tiny percent of the total business. As the years went on, it was still relatively small but growing exponentially. We’ve seen ecommerce become a much bigger piece of retailers’ total business throughout the years, and we tend to see higher year-over-year growth rates in ecommerce vs. the more established store business for omnichannel retailers. I expect retail media to continue to grow as ecommerce grows, and as brands realize the importance to invest in media to stay competitive online.
Q: What recommendations and tips would you offer brands looking to get started with retail media?
Glaser: One of the benefits of ecommerce is that it’s an endless aisle that isn’t limited by floor space in a store. In some situations, brands have the ability to upload entire product catalogs online, which is a great way to offer your product line to customers around the world. That said, more products and unlimited space leads to more competition. It’s increasingly important that brands invest in retail media to ensure that their products are visible and being shown to the right consumers.
The hard part is that there are so many advertising options across different retailers. It can be intimidating and overwhelming to think about how to spend budgets by retailer, let alone by ad type by retailer. That’s where Tinuiti comes in, as we take a holistic approach to retail media and allocate budget by retailer based on goals and our industry expertise.
Q: What are some common pain points/challenges for brands as it relates to retail media?
Glaser: Allocating budget by ad type and by retailer is what comes to mind. As I mentioned earlier, it can be difficult to know where to put your ad dollars. You also need to determine which retailer you want to work with and you’ll need to consider the different ad types each retailer offers. It can get overwhelming quickly and that’s why it’s important to have experts in your corner.
The second challenge would be understanding the true return on investment based on retailer ad recommendations. Retail media is new and constantly evolving and it can be hard to create success benchmarks and gain learnings from those specific KPIs. At Tinuiti, we have a long history of building those budgets by ad type and analyzing those post-campaign results. We use data and expertise to plan the best possible path forward.
Lastly, there can be a disconnect between buyers, advertising teams (internal and retailer), and brand account executive teams (sales team to retailer). For example, a buyer might be changing the strategy from an assortment standpoint and those points might not be communicated well to the media team which could then lead to wasted spending. At Tinuiti, we work to bridge any of those gaps for clearer communication and efficiency.
Q: What advice would you give buyers today as retail media continues to become more important in the industry?
Glaser: There is an opportunity for buying teams to work closely with brands (and their own retailer advertising team) to plan out media spend in conjunction with their overall assortment strategy. Buyers are tasked with a lot of responsibility to build a compelling assortment at the right price and profitability within the guidelines of their financial plans. This is within a complex macro-economic environment riddled with inflationary pressures and supply chain issues. Solving the buying puzzle is hard enough on its own, and throwing in marketing/media mix expectations on top of an already full plate can feel excessive.
That said, successful buyers are the ones that understand the direct correlation between media spend and revenue growth. Media spend can be the secret weapon that helps a buyer achieve better-than-expected year-over-year performance. Media spend is a tool buyers can use to accelerate sales without affecting their portfolio’s total margin. Brands should be open to discussing media spend because it’ll help increase revenue, market share, and brand awareness.
Investing in retail media is a win all around if done correctly. If I was a buyer today, I would be tracking my media spend by brand throughout the years. I’d plan out my media spend goals based on my overall portfolio sales plans. Buyers should be incorporating media spend plans by brand when doing their sales, margin, and receipt brand plans. If a retailer doesn’t plan media spend by department, a buyer should incorporate it into their financial analysis to ensure their portfolio is being sufficiently supported from a retail media perspective.
Furthermore, buyers should take time to understand the different advertising options available at their respective retailers, the different ad types their top brands have used before, the performance of those campaigns, and a general idea of the best strategy to use going forward.
Q: Any predictions for the future of retail media or retail buying?
Glaser: I anticipate retail media growing rapidly and becoming a much larger, more important part of a brand’s and retailer’s strategic plans. Retail media networks are spinning up and evolving frequently. The space is growing and changing, and it can be complex to navigate – those that figure it out earlier will have a leg up in the future.