Learn more about the value of first-party data, the importance of digital identity and how this is fundamental to the growth of retail media by watching Maria Giacobbe's presentation at eTail Connect Autumn.
The big retail media picture
According to Boston Consulting Group (BCG), retail media is exploding and is expected to become a $100 billion opportunity by 2025. This has been accelerated by the pandemic with more consumers shopping online than ever before. But time is short for the retailers who want a seat at the table. Experts predict that the market will subdivide into one broad and then several specialty media markets, where the earliest of adopters with the most scalable, advanced offerings will dominate the market both early on and in the long-term future, squeezing out those who do not have a solid go-to-market plan, or vision to become the best in their sector.
But what is retail media?
Retailers sit on a wealth of rich inventory and sought-after data and if they can navigate the complexities of needing to acquire brand new tools and skillsets to sell and activate data and technology effectively, they can enable their suppliers and marketing partners to reach more of the right consumers right across the entire span of the consumer journey, whilst equally helping them truly understand how their marketing efforts and pounds are impacting actual sales at a SKU and omni-channel level.
There are 2 key ways in which retailers can leverage their assets to build out a scalable, flexible and compelling retail media offering:
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- On-site
Monetising on-site traffic and search behaviours through sponsored product listings, display images/banners and branded landing pages enables brands to connect with in-market consumers and influence them right at the point of purchase. Whilst this is limited to the scale of consumers who come to the site and provides a small window of opportunity to drive awareness and change customer behaviour, it creates opportunities for brands to capitalise on existing demand and is ‘relatively’ simple to execute for the retailer, whilst producing the highest possible margins.
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- Off-site
Monetising 1P data to provide reach against customers off-site offers unparalleled scale that can crucially help brands drive net new demand overtime. It also provides access to customers who predominantly shop in-store rather than online and lends itself to more engaging formats like video, as well as extended reach into additional channels like CTV, social, email and direct mail to drive maximum ROI for brands and return for the retailers. However, as most digital marketers know, the ability to accurately activate 1P data at scale is challenging and can often require heavy lifting and investment, particularly in the wake of changes in online user identification being led by the tech giants.
Ultimately, it will be retailers who can quickly solve the systemic challenges of connecting the right data and technology partners together to offer a holistic and scalable on and offsite retail media solution that will succeed in this space.
Why it matters
With squeezed marketing budgets, tighter profit margins, significant push backs from the supplier and trade category and dramatic shifts in consumer behaviour, retail marketers are under increasing pressure to find new revenue streams.
Retail media represents a new business opportunity that can not only benefit the brand, consumer and retailer, but crucially it can also be highly profitable if retailers can execute quickly and effectively, because simply put… the money is where the customer is. According to Goldman Sachs, 82% of consumer brands are already investing in at least one retail media platform and whilst the large supermarkets have been doing it for some time, there is new growth in the sector from brands such as ASOS and Boots, who in 2021, both announced they were investing in building out a programmatic ad business.
The bottom line
Huge opportunities exist for bold retailers who fully realise the power of their assets and their audience. But ultimately, it is those who can navigate the complexities of data and technology to offer brands the most scalable and advanced solutions in terms of reach, creative execution and analytics that will win in their sectors.