by Vitaly Gerko, CBDO of the Adtech video platform Viqeo
In today’s competitive retail landscape, capturing customer’s attention at the point of purchase is crucial for success. This is where retail media comes in, a rapidly growing tool in marketing strategy that empowers businesses to connect with consumers at this critical moment, influencing their purchasing decisions and driving sales.
It encompasses a variety of techniques, including in-store advertising, online advertising, sampling, loyalty cards, and vouchers, that work together to create a seamless customer experience, guiding them from initial awareness of the product to the final purchase.
The industry is booming, predicted to reach $897.26 billion in 2023, which is up just 5.8% over last year. Such fast-paced growth prompts retailers to reconsider their promotional strategies, embracing data-driven approaches that personalise ads for specific customer segments. For instance, most retailers now use cutting-edge technology, algorithms, and predictive technologies to create ads.
As retail media continues to evolve, consumers can expect to encounter more targeted ads on retailer websites and mobile apps, replacing traditional leaflets and brochures. Major companies like Amazon, Walmart, Target, Tesco, and Sainsbury’s are leading this shift, recognising the potential of retail media to enhance brand recognition, drive traffic, and stimulate sales.
What about Retail Media Networks?
In the ever-evolving digital age, retail media networks (RMNs) are emerging as a powerful force, shaping new consumer purchasing behaviours. A recent study revealed that Amazon, Carrefour, Tesco, and Boots are among the most prominent RMNs in the United Kingdom. These networks empower brands to engage with customers throughout their shopping journey, influencing decisions and enabling more informed online choices.
Interestingly, consumers are increasingly receptive to viewing ads while shopping, often seeking new products and recommendations. For instance, Criteo’s report indicates that every generation discovers new products through sponsored ads, with Gen Z being the most influenced group by digital ads and most likely to take action after seeing a sponsored ad in search results.
Furthermore, RMNs provide brands valuable insights into what to advertise, how to promote it, and who to target for maximum ad effectiveness. Retailers can now access data to analyse and tailor their advertising strategies. For example, with over a million registered users, the potential for advertising on a platform like Walmart is immense, considering that the retailer obtained customers’ data directly with great accuracy compared to the data collected by third parties or other methods, such as cookies.
5 Trends to Watch in Retail Media in 2024
- Retail media is revolutionising digital advertising, relegating traditional Demand-Side Platforms (DSPs) to the sidelines.
In the past, DSPs like The Trade Desk, TubeMogul, and RocketFuel dominated marketing conferences. However, many platforms have been acquired or shattered as retailers have taken centre stage in the AdTech landscape. This shift is driven by the rise of RMNs, such as those offered by Amazon, Walmart, Target, Rewe, Otto, Lidl, and OBI, allowing retailers to leverage customer data collected to deliver highly targeted and effective advertising campaigns. It is a part of Retail Media 2.0, known for expanding influence across retail channels and moving further in the marketing funnel.
- Standardisation in retail media reporting
The lack of standardised metrics in retail media reporting hinders effective media planning and makes it challenging for advertisers to assess the true impact of their campaigns. For instance, metrics such as impressions, clicks, and sales can be measured in various ways, making comparing results across different platforms difficult. This lack of consistency is causing frustration among advertisers, who increasingly call for standardisation to make more informed media buying decisions.
- The rise of off-site retail media.
Off-site retail media is a growing trend where retailers advertise their products and services other than their websites. For example, Amazon has been using off-site retail media to reach customers not currently shopping on their website. In other words, off-site retail media can help retailers reach a wider audience, target specific demographics, and measure the effectiveness of the advertising campaigns. As a result, off-site retail media is expected to grow in the coming years, from 12.7% in 2022 to 17% by the end of 2025.
- Retail media and dynamic retargeting
Retail media and dynamic retargeting transform digital advertising, opening up new video and connected TV advertising possibilities. These formats are particularly effective for Gen Z and Millennials, allowing advertisers to generate real-time dynamic videos tailored to each viewer. This approach rapidly gains momentum and potentially revolutionises video and connected TV advertising.
- Retail media is making a comeback to offline.
Digital-out-of-home (DOOH) advertising is steadily evolving into retail media, and ad spending in this market is anticipated to reach $17.54 Bn by the end of the year. One of the reasons for this resurgence is that retailers are now prepared to offer advertising in physical stores through their online platforms.This means that you can now bid on actual shelves through the platform.
For instance, Walmart Connect provides solutions like Search, Display, and In-store advertising. These solutions help brands connect with customers at every step of their journey, from high-traffic spots in search results to digital screens in over 4,700+ Walmart stores. At the same time, Target, through its retail media business Roundel, uses its rich insights to create personalized advertising campaigns. It works on Target’s platforms and connects partners with guests across more than 150 premium publishers and channels. Target also innovates in-store beacon marketing with a newsfeed-like content stream, providing customers with deals and recommendations as they browse aisles.
Another reason for the comeback is that it is now possible to target shoppers who have consented to data processing online based on their purchase history in physical stores. Such advancements in retail media are not only enhancing the shopping experience but also providing advertisers with more precise targeting tools. This integration of online and offline data is revolutionizing the retail advertising landscape.
Retail media is rapidly becoming dominant in digital advertising, offering brands and retailers a powerful tool to connect with consumers and drive sales. As the industry continues to evolve, we can expect to see more innovative and effective uses of retail media emerge.