Retail media ad spending is projected to be $68 billion by 2025, and everyone wants to be a part of it. And for good reason—it is changing the way retailers and brands collaborate.
This could be seen at Shoptalk 2023, as it was impossible for attendees to miss the many thoughts, players, information and solutions surrounding retail media. New entrants—from data and ad platforms to analysts producing thought-leadership content to in-store tracking cameras—are emerging.
While this influx of new players is a positive development that encourages innovation and competition, it also makes the landscape even more complex and confusing for retailers, brands and consumers.
There certainly is an opportunity to bring everyone together, but the question remains of how to do so. Patrick Vesperman, Senior Director of Product Management for Retail Media Networks at Epsilon, attended Shoptalk, and here are his four key takeaways coming out of the weekend.
Patrick Vesperman
Senior Director of Product Management, Retail Media Networks at Epsilon
1. Lead with strategy
Many organizations focus on the capabilities they can sell in the short term to take advantage of the retail media trend. This approach may result in temporary gains, but it can also create long-term challenges for the organization, its partners, and the industry as a whole.
Speakers at Shoptalk anchored their innovations and partnerships in core strategic parts of their business. In Ulta CEO Dave Kimbell’s keynote speech, he discussed how Ulta is investing in robotics to enhance lash applications or AI around skin analysis to recommend products. These strategic enhancements will help shoppers have a better overall experience by making it easier for them to find their best next product, for example. Additionally, Bill Ready, Pinterest’s CEO, mentioned how Pinterest is integrating Shuffles, an app to engage with Gen-Z, into their main application to enhance commerce capabilities, which is a core Pinterest Strategy. Brands succeed when they let strategy take the lead. When it comes to retail media and the technology that a retailer builds, develop a strategy and follow a roadmap for a more sustainable approach that can lead to capturing a portion of the $55+ billion industry, along with a stronger offering and more satisfied clients.
2. Be thoughtful with your partner selection
Partnerships are vital in retail media since no single player can meet all needs. When evaluating potential partners, consider your strategic objectives.
Assess the benefits you expect to gain from a partnership as well as the expenses you’re willing to bear in the process. The value of specific synergies and the expenses you’re willing to incur will depend on your strategic goals, the potential benefits of the partnership, and the costs associated with achieving those outcomes.
For instance, a dominant player with an appealing UI might lack integration with your measurement methodology, resulting in challenging outcomes for clients or stakeholders. As a result, it’s essential to know your strategic objectives and incorporate them into you partner selection process.
3. Prioritize strategic unification
In many conversations throughout Shoptalk, retailers mentioned how they want more unified, consistent experiences for their brands. Unification should be purposeful and aligned with strategic objectives and client needs. A tech stack and solution that offers the best individual capabilities, such as a user-friendly interface, publisher network, reporting dashboard or innovative ad format, may seem appealing but can lead to a disjointed ad stack lacking consistency in delivering results.
So how do you sort out what you actually need and from whom? Look for common threads that align with your strategy and select partners who bring unification in those areas to create a seamless, consistent and high level of service.
4. Be honest
When promoting your retail media solutions, stay truthful and transparent about what you offer. Don’t make false claims about your capabilities or promise things that are not part of your roadmap.
Instead, focus on your strengths and be up front with your clients about what you can or cannot do. Actively seek feedback and incorporate your partners’ needs into your roadmap so that you are constantly evolving and being a leader in the space. It’s crucial to listen to your customers and prioritize their needs while maintaining honesty and integrity.
What does this look like in action?
We’ve developed a long-term strategy that supports our clients and enables sustainable growth and success. We’re committed to working together with others to establish an industry that values trust and transparency as much as market share and revenue.
We work with a variety of retailers from different industries ranging from CPG to healthcare and from small to large retailers. Our work with GoPuff, for example, expanded their retail media network for full shopper journey campaigns. With Epsilon's retail media solution, GoPuff’s brands are seeing ROIs as high as 430%, while platform revenue has grown nearly 170% year-over-year in July as active products doubled onsite.
As retail media continues to grow at a rapid rate, retailers need a strategy to not only get through the near term but also build for the long term as they embrace new tech advancements. Be deliberate with your partner selection and unification, and be honest with yourself and your clients.
To learn more about retail media networks, visit our website.
