Retail Media is a rapidly growing advertising channel that is reshaping the retail landscape, and will account for over 25% of total global digital media spend by 2026. More and more retailers are tapping into this business to fund strategies that boost their priorities and competitive position. eMarketer research indicates that the US retail media market is estimated to grow 25% in 2023, and US digital retail media ad spending is expected to grow to $100 billion over the next five years. It’s clear that this channel is a significant opportunity for retailers to reach new audiences and monetize their owned channels.
As the number of visitors to online retail stores like Amazon, Walmart and eBay increased, companies saw an opportunity to promote their brand and products through advertisements on these platforms. This led to the growth of retail media advertising, with Forbes reporting that 74 percent of brands now have dedicated marketing budgets for retail media advertising.
Understanding Retail Media Networks
A retail media network is an advertising service that offers marketers access to advertising space across multiple channels, such as a retail store’s website, apps, brick-and-mortar store, and partner networks. By leveraging these channels, brands can reach a wider audience.
How does Retail Media work🛒
Retail media involves setting up an advertising business that allows advertisers to buy advertising space across a retailer’s owned and paid media, using consumer data to connect with consumers throughout the buyer journey. The closed-loop measurement capabilities of retail media enable advertisers to tie a media campaign back to omni-channel sales, providing excellent visibility of performance.
The advantages for retailers and advertisers💸
Retail media offers benefits for both retailers and advertisers. Retailers can expand their reach, monetize their owned channels, and utilize first-party data to improve digital advertising ROI. Advertisers can access first-party data, increase visibility, measure their campaigns, create more relevant ads, and gain an additional revenue stream. Retail media creates a win-win situation for both parties.
👍Available solutions for retailers👍
Retailers looking to enter the retail media market have several solutions available, as some of the major players in the retail media space have developed their own retail media platforms to help brands reach shoppers with relevant ads at the point of purchase online. Some of the major players in the retail media space are:
- Amazon: Amazon’s retail media platform offers a variety of advertising options, including sponsored products, sponsored brands, and display ads, to reach shoppers at every stage of their buying journey;
- PromoteIQ: Retail media platform PromoteIQ enables retailers to work directly with their brand partners to promote products and generate incremental high-margin revenue. The platform offers full control over vendor marketing programs within a single dashboard, allowing retailers to manager vendor access, customize ad placements and set prices. promoteIQ also automates digital vendor marketing campaigns, including promoted product delivery, shopper targeting, campaign reporting and more;TargetMedia network;
- Roundel (Target): Formerly known as Target Media Network, is used by advertising partners to reach out to Target’s consumer base. The platform allows advertisers to reach Target’s audience through display, video, and native advertising options;
- Walmart: Walmart Connect is Walmart’s retail media network that uses its resources to create meaningful connections between its customers and advertising partners. It offers a closed-loop system that integrates online and in-store behavior to build a comprehensive picture of Walmart customers, allowing brands to reach shoppers with relevant ads at the point of purchase online;
- Kroger Technology & Digital: Kroger Precision Marketing (KPM) is a marketing service offered by Kroger in partnership with 84.51° that uses Kroger purchase data to help brands connect with customers. KPM uses PromoteIQ to power its vendor marketing programs, reaching shoppers with relevant ads at the point of purchase online. Kroger has also leveraged PromoteIQ to enable brands to track in-store and online sales results attributed to specific advertising campaigns;
- Criteo: Criteo Retail Media is a platform that helps brands, agencies, and retailers collaborate to increase product sales. It allows brands to reach shoppers with relevant ads on retailer and marketplace websites and apps, improving their position on the digital shelf and providing a new revenue stream for retailers. The platform offers various advertising options to reach shoppers across retailers’ media properties.
There are many other retail media brands. Each platform has its own unique features and capabilities to help brands connect with customers and drive sales. Some retailers choose setting up their own in-house retail media network.
Examples of successful retail media campaigns
- “Summer of Savings” campaign with Walmart. Procter & Gamble (P&G) partnered with Walmart to launch a retail media campaign called “Summer of Savings.” The campaign aimed to drive sales of P&G products during the summer season, and it leveraged Walmart’s owned and paid media channels, including display ads, sponsored products, and search ads. The campaign targeted specific audience segments based on their shopping behavior and preferences, resulting in more relevant ads that were more likely to convert. As a result of the campaign, P&G saw a 7% lift in sales and a 7.5x return on ad spend (ROAS);
- “End of Season” campaign with Amazon: adidas partnered with Amazon to launch a retail media campaign called “End of Season.” The campaign aimed to clear out Adidas’ seasonal inventory and drive sales during the end-of-season sale. The campaign leveraged Amazon’s owned and paid media channels, including display ads, sponsored products, and search ads. The campaign targeted specific audience segments based on their shopping behavior and preferences, resulting in more relevant ads that were more likely to convert. As a result of the campaign, Adidas saw a 70% increase in sales and a 5x ROAS.
🎯Effectiveness of Retail Media🎯
Retail media can be effective in driving sales and boosting a retailer’s competitive advantage. However, success in retail media involves more than just mastering this new channel. It involves using this new profit pool to re-invest in the business and redefine the company’s competitive advantage in it’s core business.
To make the most of retail media, retailers need to follow some best practices, such as building data-driven customer relationships, finding skilled media buyers, studying retail media networks and investing in retail media technology. By carefully planning, executing, and managing their retail media campaigns, retailers can leverage the visibility and targeting capabilities of retail media networks to achieve their business goals.
🚀Challenges and mistakes to avoid🛑
Retailers can encounter various challenges when executing retail media campaigns. Some of the most common reasons why retail media ads fail are: selecting the wrong audience, unclear messaging, poor optimization, insufficient investment and unrealistic expectations. It is very important to focus on the right audience for a successful retail media campaign. retailers should revisit their customer personas to ensure that the retail media platforms selected cater to the targeted demographic. Campaigns can be narrowed to a niche to reach the right audience. Bad messaging can be an issue if retail media ads aren’t resonating with target customers. Retail media campaigns often take time to optimize, and it’s important to monitor performance metrics (like clicks, conversion rates, CPA, ROAS) and make data-driven adjustments. Regularly monitoring campaigns and leveraging insights for potential improvement areas is crucial.
👉In conclusion, retail media advertising has emerged as a significant opportunity for retailers to reach new audiences, monetize their owned channels, and stay competitive in the market. With the retail media market projected to grow rapidly over the next five years, it’s important for retailers to understand how retail media works, the benefits it provides, available solutions, and best practices to execute successful campaigns. By leveraging the visibility and targeting capabilities of retail media networks and avoiding common mistakes, retailers can make the most of this channel to achieve their business goals.