There are many truths in life, but what about in the world of retail media? In summary, retail media enables retailers to target consumers more effectively at or near the point of purchase, on-site, off-site or in-store – often all of these. As a function, it is fast becoming a core component in retail and integral to FMCG brands’ media and marketing campaigns, even more so with the phasing out of third-party cookies and the need to access to first-party data. Here are some of the ‘universal truths’ about retail media:
1. It’s not that new
Hailed as the ‘next big wave in digital advertising’, the fact is that retail media in some form or other has been around for a while. Retailers have invested in trade marketing for years, offline in physical stores, but now increasingly online with the growth of e-commerce. Pre-pandemic, retail media remained a nascent industry, but with the acceleration of online shopping and the need for both retailers and brands to be connected with customers at all times via a website or application, we are now entering a golden era of retail media.
2. It is no longer an obscure’ other income’ stream
By leveraging proprietary media and data assets, retail media is a source of profitable growth for retailers and increasingly part of their e-commerce investment strategies. Retail media is disrupting legacy supplier collaboration processes and even impacting stock valuation. Retailers who invest in retail media to maximise revenue on their e-commerce sites and make it a core function of the business will see results.
3. Retail media is shifting media spend towards retailers
Brands and media agencies are buying into a new way of marketing, shifting their media spend towards retail media. Boston Consulting Group estimates that the retail media market will account for over 25% of total digital media spending by 2026. Although retail media budgets are growing year on year, retail media spend is more discretionary and fluid based on performance, scale and efficiency, so retailers will need to fight to earn their fair share.
4. Retail media cannot succeed on its own
Retail media needs to be supported by other areas of the retail business: merchandising, marketing, e-commerce, operations. The fusion of omnichannel trade marketing, shopper marketing and retail media will force retailers to approach supplier collaboration in a more holistic way. As retailers demand more spend from their suppliers, brands are having to rethink their retailer-specific and brand media investment strategies. Retailers also need to set clear and consistent expectations from executives, merchants, and marketers so brands know how to utilise retail media solutions to drive topline sales growth.
5. Part retail, part media – but they must work in tandem
Retailers who act like a retailer derive premium value by offering proximity to commerce, valuable customer data and the ability to seamlessly amplify trade investments with brand media investments. Suppliers are recognised and rewarded for making meaningful investments above and beyond trade. Retailers who act like a media publisher derive premium value by offering high value, highly viewable and far-reaching advertising solutions. They balance customer experience with total revenue management and build flexible media ecosystems that follow industry best practice for speed, effectiveness, and efficiency.
6. Agile isn’t just a buzzword
Retail media is a hot topic right now as we know, and it seems like everyone is getting involved. This is exciting, but it does mean that it is constantly evolving, so expect change and disruption. To manage this, retailers need to future-proof their operating models, partnership agreements and internal plans. Make sure on-site and off-site platform partners are enthusiastic about advancing their technology to maintain long-term competitiveness. It’s also important to keep communicating with internal stakeholders – there’s a good chance you will need to adjust your strategy at some stage in the future.
7. It’s all about creating value
In any market, the forces of supply and demand are at play. When a retailer wants to grow retail media demand, it should be complemented by an increase in retail media supply. If they are looking to grow their program by 50%, they must be prepared to create 50% more value through a combination of new and better ad placements, better performance, tighter integration or more exclusivity. Forcing investment through merchant pressure will only carry them so far.
8. Seamless planning and measuring
Retailers do not need to be retail media experts, but they need to care about suppliers. Even if the retail media programme is primarily outsourced, retailers should have a dedicated leader or team responsible for it so that planning, management, and measurement are frictionless. Suppliers and brands need clear expectations and investment tracking, and also transparency so they can measure campaigns through self-serve platforms, dashboards and APIs.
It is an exciting time right now with FMCG retailers and brands seeing the real benefits of retail media. More retailers are starting to use the technology to help monetise their digital shelf space and scale their business – and at a time when growth can be hard to find.
CitrusAd is a leading retail media company and part of Epsilon, a global advertising and marketing technology company.
