What is driving retail media at the moment?
Traditional retail media started off on-site and that is still going but it’s starting to reach maturity, probably led by the US with Europe not far behind. The two big trends in 2023 is the move to off-site and scale, and with that a move to much more inventory becoming available. And the second is the move to in-store. Digitisation of in-store has led to a lot of opportunities. For next year there will probably be some discussion going on in the industry around how much we want to integrate targeted promotions and so on.
Is there enough inventory?
I think so, yes. This is what I mean about maturity because there are a lot of slots on-site being allocated, but not very intelligently. CRM can have slots one, two and seven and then a sponsored product can have slots one and two and so on. There’s more to be done to make this a more efficient process but there’s probably as much inventory as we think the consumer would take so we won’t push it too much. But then, things like in-store or offsite hugely increases the amount of inventory that’s available. We just need to get better at it.
What creative formats will be most effective on-site?
Going up the funnel will be important so we can expect to see more video, for example. We were seeing large negotiations between brands and retailers at the beginning of the year. The prices of own label products in retail went down while the prices for brands had actually gone up. Brand manufacturers are having to justify that gap and they’re doing that in their negotiations around retail media and their level of creative involvement.
What new trends are you seeing in retail media?
Sector-wise, beauty, fashion and the grocery brands are still very important. But what I would say is that, with the ability to go offsite, we have more opportunity to go outside the environment of what is sold by that specific retailer. So we can start looking at automotive or insurance. It’s new territory and getting measurement right will be more difficult but there are large opportunities there.
Are agencies ready to take advantage of the opportunities in retail media?
It’s quite interesting. In our latest quarterly results we announced that 35% of our retail media revenues are now coming from agencies. That’s growing very rapidly. It’s a big opportunity because retailers have traditionally been a bit reluctant to go to agencies because they think it’s another player that will take a cut, but the opportunity is really opening up. Having an agnostic view of working with agencies is really important.
What’s Cannes like for you this year?
Well, it’s back to normality, right? Everyone’s here, everyone’s looking at the opportunity. We’ve had more partnership discussions, which is encouraging. The industry does need to partner. It would be really difficult to do everything on your own.
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