Issue #96: Content Is The New Commerce

The past week was a big one for milestones in my life. Apologies for the missed issue! First, and most importantly, my brother got married! I am so happy for both of you! Second, on Wednesday, May 27th, it was the two-year anniversary of the launch of “Retail Is Not Dead?” Crazy how time flies, and super excited for the next two years. With that said, let’s dive in!

Advertising is a major part of society today, albeit less prevalent in the traditional retail world compared to other walks of life. Traditional retail advertising lags behind other industries. However, with the rise of omni-channel purchasing, that is changing. I have been trying to get smarter about how the advertising and media world works, and I figured I was not the only one. In Retail and CPG brick and mortar, especially, there is a lag behind many other industries, but that gap is closing if you know what you are doing. There are now many levers you can pull, akin to an eCommerce brand or someone who avoids traditional retail.

Traditionally, advertising has been pretty split between those who can send you to an eCommerce purchase directly and those who are not able to. From an efficiency perspective, generally, those who have been able to drive to eCommerce have won since you can track the sale end-to-end. If you drove your content to a retailer, that was generally a black hole. Maybe it was working, maybe it wasn’t, but at the end of the day, there were no clear data-driven signals indicating whether that was possible. Now, with the advent of retail media networks and AI-driven tools, it has allowed the smartest brands to capitalize and get end-to-end tracking & measurement of customers. Walmart just surfaced an API where you can access over 500 data points. Startups are popping up left and right to track this spend (my market map here). From a retail POV, surfacing data has become a major advantage to wooing brands.

Which brings me to my original point: as a brand, you need to connect your content and media to actual commerce. There are very few brands that can get away with traditional brand marketing these days, and I would posit that those are almost exclusively in the apparel market, and maybe even only the sports apparel market. Does that mean every post needs to have a CTA for purchasing? Definitely not, that will hurt you. What it means is that you need to have a clear funnel and path to drive people from the content to commerce over time. Additionally, you must marry that with the tools to track these users throughout the funnel. How many times does a user need to engage with Instagram posts to buy at Target? Does that change if it is on TikTok? How about purchasing at Walmart? These are all questions that can be answered right now, or if not now, in the next year or so, and brands need to be ready for it. The amount of data sitting in a traditional brick-and-mortar brand’s fingertips right now is exploding, and you need to be ready.

I certainly don’t have the answers here, that is why I am spending time learning about the space. If anyone wants to jam on ideas or share useful tools, I am always open. At this point, I wish I had all the answers, but right now, I can say you need to be focusing on this. In a timely fashion, I came across this piece from Kendall Dickieson, who has worked with Graza and Ripi to launch retail yesterday, about the role social media plays in launching retail. I highly recommend giving it a read:

Audible has traditionally focused solely on audiobooks, and was one of the companies to really make this format accessible at scale. However, as you know by reading this newsletter, in-person, retail, and experiences are all the rage right now. Audible wanted to capitalize on that, so for the month of May, they launched a bookless bookstore. The store features spaces to sit and listen to books individually, as well as events to bring people together over these books. Audible also created physical components of the audiobooks to make them feel like a real bookstore. Now that the month is winding down, it will be interesting to see what happens here. It would be really interesting to see this become more of a full-time concept. I think it would help the brand tremendously.

On the surface, retail sales rose 0.5% to $757 billion in April, which is great. Amid crazy shifts in the economy, retail rose. However, peeling back the onion a layer, consumer prices rose 0.6% in April as well. Everything we know about consumers right now says they are seeking value, regardless of income bracket, and rising prices cannot be making consumers happy right now. Grocery prices were up 0.7%, hurt most by beef and tomatoes. In the areas where consumers shop the most frequently, they are definitely noticing it. The question here is, how will retailers and consumers react, now that the first month of the impact has passed? Spending tends to stay on the lower side until back-to-school season starts, although that has been getting pulled earlier and earlier each year. Kroger just launched a big PR push about lowering prices; some other retailers may follow suit. From a retail POV, getting into a price war is not exactly ideal, you have to find other ways to deliver value to customers.

This week, social media was abuzz with the news that Chipotle is testing a new Crispy Chicken protein at select locations in California. The chicken is breaded, the first foray into non-grilled proteins, and costs $1 more than purchasing the standard grilled chicken. It is not like the Nashville-style spicy chicken that is all the rage, it is more like a traditional fried chicken. Breaded chicken is all the rage these days, despite the supposed focus on healthier items; people love their breaded chicken. It makes sense to add this alternative, as it is very different from the other options out there. I wonder if this will just be an LTO, or actually end up being a permanent item. Compared to other LTOs, it opens up many new use cases and occasions, so I could see it sticking around. Overall, this move from Chipotle is very smart in my opinion. They are closely following the consumer trends here and acting upon it in a way that fits their brand and product. Sometimes, trends feel forced, but here I would say not so much. It will be very interesting to see if this ends up being rolled out nationwide, and then whether it is permanent or temporary.

In today’s eCommerce world, almost everything has a fixed price aside from a very limited subset of transactions. Anthropic wanted to test how its Claude models would perform in an agentic two-sided marketplace with negotiations. This “Project Deal” involves two large language models to determine whether stronger AI systems would gain an advantage in the autonomous marketplace. It was done with employees internally, although it was unclear if employees were selling to each other or outside participants. Unsurprisingly, the stronger model made more revenue and paid less for items. Despite the interesting results, in practice, I am not so sure how this will roll out. First, there are more limited transactions where negotiating is allowed. Second, there are already tools to monitor prices and recommend when to buy, without any AI involved. Third, how does this work when both people are using the same model. Many questions, but an interesting project nonetheless.

Check out who is co-hosting this event 😊

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