There is still a conundrum for retailers when they think about digital advertising: If the majority of purchases still happen in the physical store, why should they increase investment in digital? eMarketer’s Tricia Carr spoke with Courtney McKlveen, Yahoo’s vice president and industry lead of retail, travel and quick-service restaurants (QSR), about the underlying opportunities that digital advertising has for retailers.
eMarketer: What is the biggest challenge for retailers in the digital space?

Courtney McKlveen: It's important to take a step back and look at what’s going on right now in retail. The evolution and growth of ecommerce is happening fairly quickly and is driven by consumer behaviors. This massive ecommerce growth is a challenge, because these marketers with a brick-and-mortar presence have approximately 90% of purchases coming from the physical store. Yet their ecommerce growth needs to keep up with the opportunity that exists in the marketplace.
eMarketer: How should brick-and-mortar retailers who face this challenge approach digital advertising?
McKlveen: That challenge has actually created an opportunity around data that can help drive results and measurement. Retailers want to understand the value they get back, whether that’s return on ad spend [ROAS], key brand metrics or conversion metrics—that’s where the opportunity is.
Now that we have access to so much data, marketers are grappling with the question, “What data is most interesting to me?” Data is awesome insofar as it drives results. Then, how do you use that data to make better decisions about measuring your media? It’s about the decisions you make and if they drive against your metrics in digital.
eMarketer: What are the key performance indicators (KPIs) most widely used by retailers?
McKlveen: From a broad perspective, it’s ROAS: If I spend a dollar, what do I get back? We also spend a lot of time with marketers fitting together how to efficiently drive traffic to their site, and also increase favorability with and connect with customers. You can’t just have an ROAS metric and not fuel the funnel.
On the other side of the KPI spectrum is understanding consumer behavior across platforms. To us, omnichannel means truly understanding the consumer journey and making marketing decisions that help serve your customer and drive business results.