Brands are continually seeking out alternative ways to target shoppers online after the death of third-party cookies. The answer may come from your existing retailer partners. Investing in retail media can provide a valid new marketing option for brands. You can also make the most of your own assets in the process.
Retail media is experiencing exponential growth, with the industry set to be valued at $100 billion by 2026. Businesses such as Amazon, Tesco, and Walmart are among the more progressive companies in this field. Morrisons, Boots, and some of the Kingfisher brands are at the early stages of their retail media journeys.
Retailers are working with forward-thinking companies like Epsilon to build media businesses. The process takes many forms. Creating ad space on websites and leveraging loyalty scheme data to build targeted messaging is all part of it. You can also explore different ways retail media can help your partner brands.
Dynamic content optimization and first-party data are the key ingredients for retail media. Epsilon is an expert in this space, and we can help you build a compelling retail media proposition. We have done it for retail brands in the US, UK and the EU, and you can read about it all below.
Death of the third-party cookie
Advertisers became reliant on third-party cookies to deliver targeted and measurable digital marketing. They are what underpin conventional digital ads. But alternative methods are now required. That is because Google has confirmed it will block third-party cookies from its popular Chrome browser.
The move has concerned e-commerce marketeers. Google’s announcement has spawned a plethora of events focused on “what next?” There has been much head-scratching in the industry, but brands now realise more than ever the importance of getting access to data.
By 2024, third-party cookies will have gone away completely. So, now is the time for retailers to assess how they effectively identify and reach their customers within the eCommerce arena.
Retail media is stepping up to fill that gap. Many brands believe working with their existing retailer partners in a more strategic manner will prove to be more powerful. Reliance on what many describe as flawed third-party cookies was arguably never going to be a successful long-term plan.
Retailers as platform
Retailers are becoming more than just a place to buy things. Superdrug, B&Q, and Decathlon are among many retailers adopting a marketplace model, for example. They are extending the number of brands they work with and creating a decentralised commerce model to drive revenue. Other retailers, such as Next, The Very Group, and Farfetch, are allowing third-parties to use their technology stacks. It means less sophisticated digital brands can raise their game online with the help of others.
These are all examples of retailers as platforms. Retailers are realising the value of their digital assets and their traffic. Moving into the world of retail media is a natural step to take alongside these complimentary industry trends.
Who better to help you market your brand than the retailer that’s actually selling it? And the best retail media deployments can make sure you send the right message to the right customer at the right time on the best channel.
Best Practices in retail media
Amazon has built a multi-billion dollar ad business, and is a leader in retail media. But it is not alone. Walgreens in the US has developed its game-changing Walgreens Advertising Group (WAG). The media division aims to help brand partners in many ways.
Luke Kigel, from Walgreens Media, wants to combine the strength and power of Walgreens’ customer relationships with brands' own data . The idea is for brands to work with WAG to increase the strength of their marketing capabilities. That is the perfect mix in Kigel's eyes.
WAG has access to insights from more than 95 million customers via the myWalgreens loyalty scheme. It presents a massive opportunity for brands to get their message in front of a relevant audience.
Kigel says WAG wants to build solutions that make it easier for brand and agency partners to work and engage with Walgreens. The main focus is on enabling brands to deliver personalization and drive performance. Epsilon – alongside some other key players in the space – is helping WAG open up its audience to partner brands. As a result, it provides a better return on investment than brands could get elsewhere.
Is retail media a marketer's golden ticket?
IAB Europe increased its focus on retail media in 2022, acknowledging it is no longer an emerging channel. It's arrived. The trade body says retail media is one of the fastest-growing sectors within the digital advertising industry. In a report looking at the opportunities presented by the market, IAB Europe forecasts retail media ad spend will reach €25bn in Europe by 2026.
According to IAB Europe, 92% of advertisers and 74% of agencies already partner with retailers to reach consumers. Of those not yet engaged with retail media as an advertising channel, 88% of advertisers and 77% of agencies plan to change that in 2023.
More than a third of buyers cite the need for first-party data as one of the key drivers of retail media adoption. IAB Europe reports that 91% of buyers have a first-party data strategy in place. Meanwhile, under half (49%) are still working towards scaling their first-party data strategy.
Retail media in Europe is an €8bn market and growing double-digit despite economic headwinds, according to the report.
And it is not just a select few categories looking to take advantage of the growing retail media space. According to a report in the US, jewellery and luxury is particularly focused on retail media investments. Consumer electronics, beauty, and consumer packaged goods brands are not far behind. But as eMarketer says, “just about everyone wants in, so it’s smart to get started now.”
Retail media: 4 reasons why you should get involved
1- Adopting a retail media strategy enables you to add a new revenue stream.
2- The onset of third-party cookie depreciation means brands you work with are likely to be looking for platforms with significant levels of data. If you’re a retailer – especially one with a loyalty programme – you’ll have that data.
3- Retail media enables you to deliver hyper-personalised content to each customer at the right time.4- Retail media enables you to capture shoppers when they are already in the mindset to buy. Done effectively, it can encourage customers to increase their average order size and elevate their lifetime value.
Analysts predict the continued growth of retail media will be a major trend in 2023. The rise in e-commerce over the last two years and retailers' position as first-party data custodians contribute to the trend.
We’ve already put together a handy top-tips guide to rolling out a successful retail media strategy. Have a look at what we have to say about it. But, in short, the first and most important task is to identify your customers. You can then build out profiles for them. What do they like? When do they like to shop? How do they shop?
Then it's all about communication. Get the right messages to the right people at the most appropriate time. And never stop measuring the impact of this strategy. The beauty of retail media is it can provide a transparent view of your campaigns.
Done properly, it gives brands the ability to combine ad exposure and conversion into a single platform. From there, you can measure what works best and double down on those tactics accordingly. Our message to retailers and brands is to make sure you take your share of the market. Don’t miss out. Ride the wave.
How can Epsilon help?
Looking to optimise your first-party data and find additional revenue streams? Epsilon turns retailers into marketing platforms and connects them with more customers.
We can also strengthen brand-retailer partnerships and help build the most personalised media.