Retail media: The hypes, facts and realities
Although 2022 may have seemed ‘the year of retail media’, the view from late 2023 suggests this accolade was premature
It is easy to see why retail media has so readily captured advertisers’ imaginations. However, with so much promise and potential comes a need for clarity. Indeed, there are still pertinent questions over what retail media means, for both CPGs and retailers, and where it’s going.
I recently spoke at IAB Retail Media Upfronts, to discuss the hype, the reality, facts and reality around retail media. The reality is that the industry is still developing, and there are important lessons for the whole ecosystem to take on board now. This includes the opportunities, the strategies that will deliver for CPGs and retailers, as well as some of the new obstacles to scale in pursuing success in the new world of the omnichannel path to purchase.
Embarking on the retail media journey
One pervading assumption about retail media is that the space has already been monopolized. In particular, those grocers with long-established loyalty schemes, such as Tesco and Sainsbury’s, are sitting on a wealth of first-party data.
While these businesses have admittedly very mature retail media offerings, with a lot of in-house expertise and market penetration, they represent the tip of the spear. It’s thanks to the recent development of privacy-enhancing technologies, including data clean rooms, that have precipitated the retail media revolution in the past 12-24 months. This means that for other grocers looking to catch up, there is still ample opportunity to leapfrog the competition by investigating these solutions.
Moreover, according to research from Kantar, consumers visit at least three major retailers every month on average. So brand loyalty in the purest sense arguably doesn’t exist in the CPG world. The chance is there for other grocers to similarly acquire customers and capture their first-party data, through an appealing loyalty program.
However, this needs to be considered carefully. With the cost of living crisis continuing to weigh on consumers, retailers must earn the right to be in their shoppers’ wallets. Maximizing the value their scheme offers will be key to differentiation here. Not just in unlocking cheaper prices, but in ways that are personalized and meaningful to the consumer.
Collaboration and conversation
Likewise, not only must retailers ensure that they are meeting the needs of the consumer, but, in a far cry from the traditional relationship they once had with their suppliers, there is increasing pressure on them to present their retail media offerings in a way that is curated to their brands’ specific needs.
The retail media networks that are standing out, and who will achieve real growth, are the ones who have acknowledged that it's not a one-size-fits-all approach, but rather are offering a suite of options that are based on the CPGs’ needs.
Ensuring seamless delivery of these options to brands means retailers need to dissolve silos and establish more holistic thinking between their loyalty, marketing performance, and data teams.
This applies to the brand side too, where retail media has driven a convergence of trade marketing, shopper marketing, and digital commerce.
To ensure alignment and ease, many brands are appointing retail media directors, who are responsible for the bigger picture and who can oversee that retail media budgets remain flexible and that data insights are activated across channels in a shopper-centric approach.
Where do we go from here?
As retail media offerings become more widespread and teams on both sides of the table become increasingly adept at internal and external collaboration, we can expect more and more partnerships to form, with greater emphasis on how the brand can be offered value. Moreover, with advancements in technology having enabled these data relationships in the first place, the industry will soon see cross-data collaboration become the norm.
For example, brands and agencies will be able to use aggregated platforms to plan national campaigns against different audiences, touchpoints, and geographies. Likewise, with the majority of purchases still made in-store, the combination of online and offline environments will be significant.
While in the past, retailers jumped ship on in-store advertising due to obsolete screen systems that lacked real-time adaptability, the surge in video content across social media and CTV platforms has unlocked fresh opportunities for brands to impact in-store conversions. This is not limited to digital screens either, but truly understanding what the shopper is doing and storing real-time insights to inform and activate personalized experiences across the funnel.
Of course, with so many retailers looking to capitalize on retail media offerings, the result is that the industry today is fragmented. However, standardization when it comes to audience definitions, measurement metrics, and agnostic partners that support tech stacks will see these media networks look more and more alike. What will then determine their unique selling points is the retailer’s brand, and how retailers can offer access to different types of shoppers.
The result for the under-pressure consumer will be more shopper-centric offers as well as purchasing experiences that are more meaningful, and which increasingly blur the lines between in-store and digital estates. A good result for the whole ecosystem.
This article was based on a discussion that LiveRamp, Co-op and SMG participated in at IAB Retail Media Upfronts 2023