The Full Funnel Effect: In-Store Media Gets a Glow-up

Retail media networks are still on fire, but most retailers are just scratching the surface when it comes to tapping in-store opportunities. In this episode, Cole Johnson, founder and CEO of The Looma Project, reveals why the next five years will be a land grab for in-store retail media. As inflation and tight margins put on the squeeze, savvy retailers are modernizing their store environments while tapping into lucrative new revenue streams.

Cole breaks down the "three CXs" that have kept some retailers on the sidelines: customer experience concerns, CapEx requirements, and operational complexity. The good news? Solutions are emerging that check all the boxes. Looma's three-screen approach creates an enterprise-grade platform that drives results without busting budgets, overwhelming shoppers, or compromising customer experience.

Key Takeaways:

Content is king in retail media, but authenticity is emperor. When shoppers tune out overly promotional content in less than a second, cookie-cutter commercials won't cut it. Learn why documentary-style storytelling featuring real people is the new standard.

Location, location, location. Sales lift 5-10 times higher when digital media and merchandise are co-located rather than placed away from products. Find out how smart positioning can transform displays from background noise into powerful conversion tools.

The numbers tell the story. Combining ad revenue and sales lift adds up, especially for low-margin businesses like grocery. Get insights into why in-store retail media can quickly become an exponential game-changer.

New tools call for new metrics. Although traditional KPIs such as ROAS and iROAS still have a place in the new retail media frontier, they don’t tell the full story. Understand how four key value drivers bring greater insight.

The in-store retail media revolution is poised to transform multiple high-involvement categories like beauty, outdoor gear, and pet supplies. The playbook is ready and the metrics have been established - now it's up to retailers to build the infrastructure and invite brands along for the ride. The future of retail media isn't just digital - it's dimensional.

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Transcript

CAROL SPIECKERMAN

Hey everyone, this is Carol and welcome to Spieckerman Speaks Retail, where we navigate retail from now to next through my latest retail trajectories and interviews with industry experts who help us chart the course. Well, it's that time of year again. The NRF Big Show is just around the corner. Right now, I'm setting up client catch-ups, collaboration exploration chats, and 2025 planning sessions at the show.

Ping my people at team@spieckermanretail.com to set something up. I am so looking forward to reconnecting with so many of you in 3D at the show. 

Over a decade ago, I forecasted that retailers and brands would evolve into media companies. Back then, that got a lot of puzzled looks, but they soon turned into a lot of views and listens as I continued to evangelize about retail media mania on the podcast and in the press.

The buzz surrounding retail media has only gotten louder. It's now a major retail profit center. It's a hedge against those pesky product-based headwinds like inflation and supply chain snags. It's a lifeline for retailers that focus on low-margin categories. And it gives brands an unprecedented opportunity to gain insight and get noticed.

So there's a lot to like there. But wait, there's more!

And it's all about the store. In-store retail media is the new frontier. And those noisy shelf talkers and TV screen walls? They're relics of the past. My guest read the tea leaves, creating a robust, store-based retail media platform that unites digital storytelling, education, and recommendations.

As the founder and CEO of Looma, Cole Johnson is harnessing the power of authentic content to educate and inspire shoppers at the point of decision. We've talked a lot about the digital rethinking of brick-and-mortar. Looma's network of in-store screens helps retailers modernize and monetize the store environment without crashing customer experience.

Cole really knows his stuff, and he's passionate about establishing and sharing best practices as retail media's next act unfolds. 

Hi, Cole. It's so great to have you on the show to talk about one of my favorite topics, retail media.

COLE JOHNSON

Thanks, Carol. Happy to be here.

CAROL

I wanted to ask you about the name of your company, The Looma Project.

Is there a story behind that? 

COLE

It comes from the word illumination. When we were ideating the origins of the business and thinking through a name, the words that we kept coming back to us as core to our belief, and what we wanted to build was illumination and transparency. We're connecting shoppers to the people and stories behind their products.

CAROL

I like also that you call it a project because it's always a work in progress, always improving. I like that. 

COLE

Yes, very much so. In the early days, it connoted a sense that there's a social side to the business, the social impact side to the business that was really important for us from day one that we were connecting folks to the stories and the people behind their products.

CAROL

Great. Let's get to that retail media topic that has been so buzzy for so long now. As you hear about retail media, you could start to think that it's a maturing opportunity, but That's definitely not the case. And I know you agree with that sentiment because when we talked earlier, you said that the next five years will be a land grab in retail media.

So I want to know from you, Cole, is where do you see all that blue water coming from? 

COLE

I think the land grab is specifically about in-store retail media. I do think online retail media is beginning to mature. There's still a ton of opportunity. On-site certainly the most mature. Offsite still probably in fairly early days.

Most of the opportunity I think lies in CTV and in-store and probably a few other channels. I think most are beginning to recognize in-store retail media is a very nascent, very untapped opportunity. It represents, as best we can tell, well less than 1 percent of total U. S. retail media spend. And yet, 85 percent of transactions are still happening in a physical store. I think we'll start to see that gap get closed over the next 5 to 10 years. 

CAROL

So, in-store is the big opportunity. Are there any barriers to entry, though? How can retailers and brands make the most of that opportunity? 

COLE

It's certainly not an accident that in-store has moved a little bit slower than online.

It's, frankly, harder. There are three main reasons we've seen retailers stay on the sidelines or be a little bit slower to move into in-store retail media. We call them the “three CXs”. The first is customer experience, which is really the quality of the content. Most in-store retail, in-store digital media is not new by any means. This has been tried many, many times over the past couple of decades. And, in almost every case, the content has just been repurposed using existing assets, many of which are TV commercials. And I don't know about you, but I don't know a whole lot of people who want to watch TV commercials while they're grocery shopping.

CAROL

Sometimes they don't even want to watch them when they're watching TV! 

COLE

Exactly! When it comes to content quality and the entire customer experience, there just aren't that many use cases of delivering an awesome customer experience via in-store digital media. I think that's keeping folks on the sideline.

The next CX is probably the biggest and most obvious, which is CapEx. Obviously, there's a big infrastructure investment you have to make to install digital screens in your stores. That's definitely kept folks on the sidelines. And the third CX is complexity. There are a lot of things you have to get right including the physical experience. There's a lot of underlying software that you have to get right as well. You obviously have to sell the advertising either directly or programmatically and, going back to content, you have to make sure the content enhances the customer experience and doesn't detract, and then close the loop with measurement.

So there are a lot of things you have to assemble. 

CAROL

That makes a lot of sense. Let’s dig into one of those CXs, customer experience. As you alluded to just a second ago, there was a time when people made early efforts at in-store retail media. There were shelf talkers and things like that. I think retailers just turned a lot of that over to brands and said, “Hey, go to town. We don't know what this looks like”. In some cases, things got really noisy and very cluttered. And I think retailers were burned by that experience and pulled it all back. Now they have an opportunity to rebuild it with much more sophisticated tools. 

How can you provide assurances to retailers that customer experience won't be compromised and that retail media might even enhance customer experience?

COLE

It's such an important question and a huge challenge. The main point of tension is between brands that want to control their messaging on one side of the equation. And then, of course, the retailer needs to be very careful, especially if it's a more premium retailer. They want to be very thoughtful about not bombarding their customers with a bunch of brand messages and make sure they have some degree of consistency.

We tend to work with stores that have more of a clean store policy. They let fewer shelf talkers in. They're very thoughtful about what they permit in their stores. And it really comes down to sitting down with their marketing team and establishing a set of guidelines and parameters that they will be excited about.

Most of our retailers have a frame or something around the perimeter or a stamp of approval on the content. On most of our videos, you'll see a little frame around them which indicates that the content is retailer-approved. We spend a lot of time with the marketing team building the right set of guidelines and parameters to ensure that it fits the sort of experience that they're trying to cultivate for their customers.

CAROL

I can imagine that you end up being a go between in some cases between the brands and the retailers. 

COLE

Yes, and the way we make this really simple for the retailer is that we'll be quite involved early on in developing those guidelines and parameters. And then the marketing team will review the first hundred or so playlists that we develop.

They're pretty hands-on in the beginning, and then they slowly dial back as they train our content team on what they're looking for, so it definitely becomes much simpler over time, but they tend to be fairly involved early on. 

CAROL

You guys have been at this for a long time, at least again in retail years, what, like a decade or more?

COLE

Yeah, that's right, about a decade. 

CAROL

With all of that experience, what sets you apart from everyone else? What's your calling card? 

COLE

One of the two most significant we already talked about - content quality. We have a global marketplace of independent content creators, many who specialize mainly in grocery. We're starting to expand outside of grocery, but right now, we're pretty heavily focused there, so many of our content creators and filmmakers specialize in food and Bev and almost all of them, at least the filmmakers, would describe themselves as documentary-style filmmakers. They're used to producing very authentic, story-driven content that's not overly scripted. That's a big part of the equation in terms of delivering high-quality, authentic content. The second differentiator is that we offer three different screen types, which we believe collectively comprise an enterprise-grade platform. We think every major retailer doing north of five billion in revenue will ultimately have these three different screen types in their stores three, five, 10 years from now, and those are atmospheric screens, number one. These aren’t connected to merchandise. They are at the store entrance, or they hang from the ceiling, or they're at the checkout. But not connected to merchandise in any way. Number two is high-value space screens, which integrate directly with merchandising. These are typically on an end cap, but they can be other kinds of promotional space, like a center aisle display. And number three is what we call in-aisle interactives. Any screen type can be interactive, but we find that having smaller screens in the middle of the aisle that really solve real customer problems are best.

They might invite you to answer a few quick questions and get a personalized wine recommendation or enable you to search for the ingredients of a certain product, or figure out how to pair it, or turn it into a recipe, etc. They're much more interactive in nature. We think most retailers ultimately should have some of each of the three different screen types.

Most of the folks that have gone before us and even our competitors today just offer the first kind of screen, the atmospheric screens because operationally, they’re just much easier to execute. You can go drop a screen at the store entrance or hang it from the ceiling and it’s much easier than integrating it in an end cap. When you integrate it with promotional space or in the aisle, you have to bring together merchandising and marketing and, to some degree, store operations. That's the second big differentiator for us. We have software that makes that process a lot easier and we've seen meaningful results.

The latter two screen types tend to outperform atmospheric screens on a sales lift basis by almost an order of magnitude. You'll see about a 5 to 10 times higher sales uptick when the media and the merchandise are co-located than you would if they're 20, 30, 50 feet apart. 

CAROL

Do you recommend that a single brand have all three types of screens? Sort of a saturation approach, or is it choosing the best solution for a particular brand and the brand's attributes? 

COLE

Great questions. Definitely, if you're a retailer, you should have all three screen types. We do recommend that you build them out incrementally.

If you think of a traditional grocery store with 50, 000 plus square feet, most of those stores will have 10 to 25 atmospheric screens, plus another 20 to 30 high value space screens, plus something like 100 in-aisle interactive screens 10 years from now. It sounds like a lot but if you see it in-store and it's executed well, it doesn't feel overwhelming at all. For example, we just did a large deployment with Harris Teeter in the southeast. We have a big, beautiful entrance screen that is 55 inches in portrait mode, so it's right at the store entrance and you can't miss it. And we also have a few end caps in the store. So if you're, for example, launching a new item, and you're on our new-and-trending end cap, it can be really powerful to pair that media with an entry screen buy.

You're introducing folks to the brand as they walk in the store. Those assets tend to be much shorter, something like seven seconds. When they actually get to the new and trending end cap, maybe there could be a 50 or a 30-second video that tells you the story behind this new item and why it was launched so they can come together quite nicely, but it really just depends on the brand's objectives.

If it's a more upper funnel and focused on reach and impressions, then something like an atmospheric campaign tends to work better. If it’s focused more on lower funnel KPIs where they really want to drive sales or loyalty, then a high-value space or an in-aisle interactive might be a better purchase for them.

CAROL

With retailers focusing so much on private brands, it kind of ebbs and flows, but I've been saying that there's a private brand palooza going on right now because a lot of retailers have these really highly developed. good, better, best private brand programs that they're really proud of how they make them a destination.

Are you seeing retailers incorporate private brands into their retail media strategies in-store? 

COLE

Yes, but it very much depends on how core that is to the retailer's strategy and to what extent they want to invest there. Every time you're featuring a private label, It’s coming, in most cases, at the cost of featuring a national brand where you could be monetizing the national brand. So it becomes an economic decision. 

CAROL

Let's talk about content a little bit more because that's the critical element in any retail media strategy. You mentioned that it's not necessarily the best idea to repurpose content that you use from commercials and things like that. What are some of the best practices in terms of creating content specifically for in-store media and maybe even some pitfalls that you think that brands and retailers should avoid?

COLE

Happy to talk about it. The biggest learning in 10 years of working on this is that the number one driver of performance in-store is authenticity. If your content feels overly commercial, consumers will shut down. It’s amazing how good we as consumers are at tuning out commercials and they make that judgment in less than a second. We immediately turn it out. That's why it's really critical to deliver authentic story-driven content whenever possible. It's not going to be a paid actor or paid actress, but a real person that works for the brand. That’s signals authenticity.

It's also the reason that we really care about developing these parameters and guidelines alongside our retail partners and do things like putting a frame around each piece of content that's customized for the retailer. It signals to the shopper that we've reviewed this content and we're delivering it because we think it's actually helpful and valuable educational information for you. If it’s not, then we’re just blurring into advertising. The theme is authenticity. When we first launched, our content was what we would today describe as human-centric, point-of-decision video – video that included a person. As our network has matured, that hasn’t always been possible, and there are many use cases where a brand wants to display a very simple product image or ingredient highlights that don't require a video.

The way we think about this now is we have a good, better, best framework where good is basically templated. We call them shopper education cards. They're usually just a few seconds, 3 to 7 seconds. It's a static asset that might include some really light animation, and it just communicates a simple fact about the product or highlights ingredients, or maybe delivers a recipe.

We have a series of these templates that brands can choose from that have been developed by and approved by the retailer, or developed in collaboration with the retailer. “Better” would be what we would think of as product B roll, we could call it product atmospherics. This is video so it's a step up. You're moving from a static asset to a video-based asset.

CAROL

Wow, that's a lot of content to consider. I think it's great that you've broken it out that way, though. I guess when you say good, better, or best, you're talking about “we'll get the job done” versus ideal. 

COLE

Yes, it's based on what we've seen perform the best. “Best” tends to outperform “better,” which tends to outperform “good”.

It does relate to your campaign objectives. If you want to hook your campaign into a national brand, and you're comfortable delivering a very simple message, then a static asset may be fine. If you just launched a new item and are really excited to tell the story behind the new item, then the “best”  framework as probably a better fit for your campaign. 

CAROL

I think one of the reasons retailers are so excited about all these in-store opportunities and particularly retail media is because so much in-store activity can be measured. That's a really big change because it was just assumed in the past that the most robust data always came from the digital space that's set to change and retailers are really excited about it.

But how do you measure that? And are there any new metrics that you should be tracking, given that it's just sort of the Wild West and a new frontier right now? 

COLE

it's a critically important topic. One of the things that's keeping folks from really investing here is just clear measurement. We're big fans of a methodology called full funnel IROAS.

We're very big believers that ROAS (return on ad spend) is a pretty fraught metric. It has a lot of problems with it. iROAS (incremental return on ad spend) is meaningfully better in that it's focused on incrementality. It gives a much clearer view into how performant a given campaign is. The problem with iROAS is that it's very myopic and short-term focused. You're just really looking at incremental sales during the campaign. From a pure performance marketing perspective, it's a great KPI, but our view is that with in-store retail media, especially when you're starting to move away from paid search or a banner ad and into video and richer media, you're starting to blur the line between brand marketing and performance marketing.

We think a more holistic set of KPIs is a much better way to evaluate performance. Full Funnel iROAS looks at performance through four value drivers. Awareness, Discovery, Conversion, and Loyalty. And then each value driver is tied to one KPI, which drives the dollar value associated with that value driver.

For awareness, the KPI is impressions for discovery. The KPI is incremental. First-time customers acquired during the campaign for conversion. The KPI is incremental sales during the campaign. So it’s the same thing as iROAS. And then for loyalty, we basically ask the question for everybody who bought your brand before, during, and after the campaign, did they spend more after the campaign than they did before? Did you sum those up? And that drives your full funnel iROAS. So we're really big believers in this methodology because it gives a much more holistic view into how a given campaign performed. And critically, because it's so robust, you can also calculate basically any other metric that you might want to calculate from full funnel iROAS.

So if you want to compare apples to apples, you can derive IROAS, you can derive your CPM, you can derive your CAC, whatever metrics you most care about, you can pull out of a full funnel iROAS. 

CAROL

Is this unique to Looma, or something that you adopted from someplace else? 

COLE

We developed it, although we have no intent of keeping it just in-house because we think it's how in-store retail media should be measured. We want and expect folks to follow suit over time. 

CAROL

You mentioned before that a lot of your work right now is in the grocery space. And I always think of grocery as the ultimate test of fire because it's a complex business. It’s set apart from practices in other categories. It's also a low-margin business, which creates a lot of challenges for retailers. And on top of it, grocery is getting super competitive because it seems like everyone out there wants to be in the grocery business. What have you learned working in the grocery space in terms of how retailers can differentiate and plump up those margins. Do you have any secrets you can share?  

COLE

The main thought is that's the reason retail media is so exciting. It’s a 50 to 70 percent plus gross margin opportunity for a category that's used to single-digit margins. I don't think in-store retail media will have quite the same margin profile because of the inherent nature of requiring infrastructure and CapEx, but I don't think it should be far off. It should be within 10 to 15 percentage points from a gross margin perspective of online retail media so it still represents a massive opportunity. In terms of quantifying the economic impact, it's hard to tell because I really believe we're in the first inning of in-store retail media.

The target we've set for most of our retail partners is we want to be delivering at least a million dollars of incremental bottom line for every billion dollars of top line that they do. And then we want to double that via sales lift. So, the value of in-store retail media is a blend of advertising revenue and incremental sales. We want to be delivering between one and two million dollars of incremental impact for every one billion dollars of top line that our retailers are doing. When you're a single-digit merchant business, that's a really meaningful number. So the upside is quite high. 

CAROL

Absolutely. Do you see ways that this model parlays to other categories that you think are just natural growth opportunities for Looma and the space in general? 

COLE

Yeah, certainly. We just recently expanded into club wholesale, which is half a step away from grocery and that they carry food but also other categories. It's been a fun learning experience for us. I think it applies pretty much universally across all of retail. We’re excited about some other verticals. Beauty comes up a lot. Outdoor, like an REI or Dick's Sporting Goods kind of environment is really compelling. Those are higher-ticket items there that require more education. So that's really interesting. The pet category are also compelling because it tends to be reasonably high velocity with, very high emotional attachment. And so those are a few that we're pretty excited about.

CAROL

And it sounds like all of them benefit from that storytelling aspect and authenticity and all of the things that you mentioned as being keys to the kingdom. 

COLE

Yeah, absolutely.

CAROL

This has been such a great conversation about where you see retail media going next, particularly in-store. It's so exciting, and again, something that maybe people assume is already much further along than it really is.

What's next? 

COLE

Gosh, like I said, this is first inning, so there's a lot. The playbook is in place, at least for us. I feel confident that we have the right product for in-store retail media. It's a blend of the three screen types I talked about, atmospheric, high-value space, and in-aisle interactives.  If you walk into a retail store today, unless it's Harris Teeter, which is the most mature of our retail partners in terms of our deployment, you're not going to see all three of those.

So, what's next is retailers committing to building out the infrastructure, inviting brands to come alongside them in this journey, recognizing it's not all going to happen overnight, but that there's a lot of upside potential so we need to be investing. Over the next three to five years, I think you'll see the playbook that we and a couple of others have begun to develop actually get executed in-store.

CAROL

This is going to be so exciting to watch. And I have to believe that retailers are testing a lot of this out right now during the holiday season. So thank you so much for talking about some of those best practices. I know that'll be really helpful to the folks that are listening. Congratulations on your success.

COLE

Thank you, Carol. Happy to be here. 

CAROL

You bet. And hopefully, you can come back and give us an update. 

COLE

We'd love to.  

CAROL

To learn more about the work that Cole's doing at Luma, visit theloomaproject.com and follow Cole on LinkedIn. If you want to bring conversations like this to life in your spaces, check out Spieckermanretail.com or email team@spieckermanretail.com to book a discovery call or to book an appointment at NRF. See you next time!