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It’s no secret that the holiday season is critically important for retailers. NRF reports that the winter holiday season (November and December) represents an average of nearly one-fifth of total retail sales.
And even with lingering economic concerns, experts predict US holiday retail sales will grow 4.8% this year, compared to last year’s 3.8%. Certain non-discretionary categories are projected to grow even more, partly because price-conscious consumers are prioritizing essential spending. For example, eMarketer predicts 9.4% year-over-year growth for US holiday retail sales in the food and beverage category.
“The holidays are also the most competitive and active time for retailers and brands,” says Austin Leonard, Epsilon’s Senior Vice President of Business Development for Retail Media. “For that reason, it’s crucial to have the tech and strategy that can handle the high volume of data coming in and actually put it to good use.”
Your shoppers are out there, and so is the data needed to reach them—all of them. To maximize reach and revenue during the holiday season, retailers should focus not just on selling to known shoppers, but also on increasing the number of known, reachable customers in their audience. This is crucial for your own marketing efforts and for your brand partners to use with retail media.
It’s notoriously difficult to accurately identify in-store customers and turn them into an addressable audience. And despite the growth of e-commerce, a whopping 80% of all shopping still happens in stores. Unlike e-commerce transactions, in-store sales don’t automatically come with customer data that can be linked to a digital profile or loyalty account, so it can be hard to identify those customers and build strong relationships with them.
The rise of mobile proximity payments, like Apple Pay and Google Pay, adds to this challenge. When customers pay via mobile wallet, retailers can’t always tie the transaction to a customer in their file. According to eMarketer, 39.3% of the US population will use mobile proximity payments in 2024—a figure that is forecasted to grow to 50% by 2028. Can you imagine not being able to identify and market to almost 40% of your transactions?
Identifying these shoppers is an intimidating challenge, but not an impossible one. Here are three reasons retailers should turn their focus toward expanding their addressable audience and identifying more in-store shoppers this holiday season.
On their own, retailers rely on data from their CRM and loyalty programs, and, as mentioned above, these sources often fail to capture a significant portion of in-store shoppers. Also, what little data is captured is often fragmented, making it harder to measure and optimize campaign performance.
When retailers can identify and address all shoppers, it's not only a win for their own marketing efforts. Advertisers can scale campaigns based on high-quality first-party data and achieve a more unified view of customers.
“The promise of retail media is that it can help advertisers connect with all of their shoppers,” says Leonard. “If retailers can deliver on that promise, they can continue to grow their relationships with their advertiser partners.”
When retailers can accurately and completely identify their shoppers and connect them to all digital touch points, they gain a clearer picture of which marketing activities influenced purchasing decisions—and to what degree. When more media is tied to purchasing outcomes, it drives more accurate reporting and helps shape future media, and even business strategies.
In short, expanding the pool of identifiable, addressable customers helps retailers and advertisers achieve stronger, more accurate attribution. With better attribution, advertisers can make more strategic, data-based decisions.
Before expanding their addressable audience, retailers can only offer advertisers access to easily identifiable shoppers. This “low-hanging fruit” audience represents a small portion of the total shopper audience and is often not distinct from a national psychographic/demographic audience. Therefore, it’s less unique and less valuable when it comes to ad targeting.
“It’s common for retailers to only identify people who are quite digitally active,” explains Leonard. “These are the users everyone’s reaching. What’s often missed is a significant portion of an audience that is less digitally active; this audience is much harder to find and, thus, extremely relatively valuable."
Digging deeper and going beyond what you can see today means you’re broadening the profile of shoppers you can offer to advertisers for activation.
Expanding your addressable audience not only brings more value to advertisers but it also helps you, as a retailer, reach more of your shoppers with your own digital advertising.
“If retailers can activate a higher percentage of their audience base and see more accurate attribution, it’s truly a win-win-win for retailer, brand and shopper alike,” says Leonard.
And there’s no better time to reach more of your own shoppers than the holiday season when consumers are shopping more and spending more.
Your expanded ability to advertise to your own customers goes even further with digital tools like Epsilon’s Customer+, a solution that helps marketers find real customers who aren't already in their first-party data. These tools use the power of predictive AI to make smarter messaging decisions based on customer identity details, ensuring that communications are personalized for maximum impact.
This holiday season, invest in intelligent retail media solutions that help you identify and address all shoppers, not just the most digitally active. By expanding your base of known, addressable shoppers, you can enhance relationships with advertisers, improve attribution and ultimately, drive higher engagement and revenue with your own audience.
