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Commerce Media vs Retail Media Networks: The differences might surprise you

It’s no surprise people are interested in retail media–it’s expected to be a $130 billion industry by 2025. What is surprising, though, is seeing the term “commerce media” pop up in place of “retail media” in some spaces. While not a widely used industry term, “commerce media” may tout itself as superior to retail media, but it’s simply another piece of the larger commerce eco-system.

In this article, we’ll define both terms and articulate their differences, because although similar, “commerce media” sells short the full range of features, capabilities and outcomes of retail media. And if you’re looking for optimal retail media success, knowing the differences is crucial.

Don’t let semantics get in the way–connected-channel strategies, data collaboration and unified solutions are key factors in a successful retail media network. Both brands and retailers should find a partner who can help unlock the full capabilities of a retail media network.

What is commerce media?

Since commerce media is such a broad term, it also has a broad definition. According to McKinsey, commerce media “makes advertising more effective by using transaction data to gain audience insights, improve targeting, deliver relevant experiences, and connect impressions to sales, online and in-store.” Essentially, it’s combining media impressions and commerce transactions for better customer experiences. Some have called it the bigger cousin or extension of retail media, but that is misleading, given the capabilities of certain retail media networks.

What is retail media?

Retail media, on the other hand, has a more specific focus. Just like brands have paid top dollar to get their products in prime shelf spots in grocery stores (think eye-level shelves and endcaps), retail media networks began taking this concept to the digital realm. When a consumer visits a grocery retailer website, there are prime spaces on the website where consumers are more likely to see (and ultimately purchase) a product. This is a win-win for brands and retailers, as retailers can monetize their ad space, and brands can get facetime with consumers—not just in grocery stores, either. Retail media can happen anywhere in-market consumers are, and it links ad spend directly to digital sales, closing the loop when it comes to reporting.

So what’s the difference between commerce media and retail media?

It’s easy to fall into the trap of using these terms interchangeably or referring to retail media as an “avatar” of commerce media. Commerce media is specifically tied to a retailer’s e-commerce platform, which can serve ads, but in a limited capacity.

A true retail media network offers unified on-site, off-site and in-store capabilities. Using the term “commerce media” sells short the additional channels that can be powered by retailers. Retail media networks can reach all of the display options including email, social channels, connected TV, social, site activations and more.

It’s true that both commerce media and retail media highlight the ability to connect transaction-level data and media impressions to sales, which is valuable. Tying retailer sales data to show effectiveness and measurable outcomes is a standard goal. But what if your KPIs aren’t about the money?

According to Epsilon's State of Retail Media report, a global survey of brands and retailers, only 47% of brands identified ROAS and total sales as the most important metrics. While a big part of retail media is sales, there are additional metrics and KPIs that are beneficial. For instance, long-term data strategies, leveraging second-party data, branding campaigns to reach shoppers, competitive conquesting and nurturing campaigns are just some of the ways to interact with consumers in a non-sales way.

The average consumer needs 7 interactions with a brand before making a purchase so it’s important to make every interaction count. It’s also worth mentioning that a very small number of people shop organically on a retailer’s website regularly (10-20%). Brands can miss a huge portion of their customers if they’re using commerce media or a retail media solution that’s not optimized for on-site, off-site and in-store.

What to look for in a retail media solution

Retail media networks can do a lot of things for brands, retailers and consumers—so why are some better than others? For a smooth retail media experience, look for three key differentiators: connected-channel strategies, data collaboration and a unified experience.

First and foremost, you need a retail media network that spans across channels, on-site, off-site and in-store. Find a retail media network that can reach consumers off-site, especially without the use of third-party cookies. This may prove difficult, as only 37% of retailers currently provide off-site as a media network offering to their brands, and only 45% offer on-site advertising, according to our research.

Data collaboration is key

Also from the report, 70% of respondents stated data collaboration is “highly important” to their advertising strategy. One data collaboration tool to enhance your retail media is a clean room solution. Epsilon’s clean room solution will help you facilitate collaboration, activation and measurement with first-party data in a controlled, privacy-safe environment. What could knowing larger customer trends and preferences do for your marketing strategy?  

Unified solutions mean unified experiences

Brands and retailers agree: when you have multiple tech providers working your retail media network, it creates inefficiencies for retailers and a bad experience for shoppers. In fact, according to the Epsilon research, 64% of those surveyed believe retail media networks powered by multiple technology providers have a negative impact on shoppers, and 41% consider “multiple contracts or sets of terms” to be extremely or very frustrating.

Too many cooks in the kitchen can create inefficiencies, errors and a diluted experience. Epsilon's retail media solution has everything you need in one place. We provide an end-to-end retail media solution with sophisticated identity resolution and best-in-class activation technology. We have the right number of cooks in the kitchen, working together seamlessly to serve up support to fit your needs.

As is often the case in business, semantics matter. Retail media and commerce media are not interchangeable terms, so it’s important to know the difference. Retail media networks offer brands and retailers incredible CX and revenue-generating opportunities that commerce media cannot, so don’t sell yourself short. If you’re ready to learn how Epsilon can enhance your retail media strategy, let’s connect: www.epsilon.com/retail-media.