Manufacturers represents around 75% of the total worldwide advertising spend.  To get the highest return from this investment manufacturers are increasingly seeking access to specific SKU (stock keeping unit, or item-level sales data) to further influence the purchasing decisions of their end customers or create new ways to ensure predictive ordering though their merchant partners.

This helps explain why Amazon’s own advertising platform, with their SKU sales data, is growing so dramatically.   The shift in spend mostly occurring among Consumer Packaged Goods brands, drawn to Amazon’s ability to link advertising more closely to the actual point of sale and thereby provide a more seamless shopping experience.

In a world where 90% of all commerce still happens in the physical world, the digitizing of the physical store is rapidly becoming a prerequisite to compete.  It should also then follow that in-store Point of Sale providers are well positioned to become the new ‘advertising hub’ for all brick & mortar commerce.

This assumes both merchants and POS companies agree to to work together to facilitate access & availability of their data rather than trying to monopolise the opportunity individually.

Merchants have of course been slow to share their sales data (particularly on-premise; food and beverage operators) given their paranoia over competitive secrecy.  They don’t want their competitors to know how they’re doing, and much less how they are doing it.

However, by not sharing their data, these offline merchants are unable to reap the commercial benefits by unlocking manufacturer advertising spend.  Through partnerships with their POS companies, merchants would be incentivised to innovate in order to monetise these advertising opportunities.  Given this is also the future for their own businesses, it stands to reason POS companies would want offline advertising commerce to succeed and grow.

Historically, the major POS companies have made it extremely difficult for either their own merchants or themselves to participate in this type of value creation using the basket data.  Whether it is refusing to build APIs, or attempting to monopolise all aspects, these actions have resulted in holding up innovation for anyone else in the value chain.

Slowly, however, innovation around POS data is starting to happen.  Within the F&B sector companies such as Olo, Omnovore & Flyt now accessing multiple POS providers to facilitate ordering, payment & CRM services.

In the UK, Eagle Eye’s AIR platform provides AB InBev with promotional visibility from issuance through to redemption at checkout at Mitchells & Butlers’ locations enabling comprehensive media reporting in real time

Kroger in partnership with Microsoft Azure is currently building an ecosystem driven by data and technology to provide customers with personalized food inspiration.  Microsoft’s artificial intelligence software that can predict a shopper’s age and gender, data that will help the likes of Procter & Gamble, Pepsi, and Kraft Heinz tailor ads to a particular customer segment

Such partnerships are a signal that leading retailers plan to do more than merely remain competitive; they plan to innovate around data and technology.  If this innovation could be delivered on a collective basis, perhaps the multi billion advertising market could, at last, be unlocked for bricks & mortar retailers