Retail media is expected to be a $130 billion industry by 2025. With a rapidly expanding market, there’s a lot of opportunity—but not all are created equal. The landscape is more complex for retailers, brands and consumers. What is critical for retailers and brands has been overlooked.
Epsilon conducted a global survey of 689 executives from retailers and brands to gain insights on their perspectives of retail media and their progress toward achieving their goals.
Here are five opportunities gleaned from the findings so you can continue to make the most of this new and exciting market.
Epsilon’s research found that only 37% of retailers currently have off-site programmatic advertising as part of their retail media strategy. This indicates a massive opportunity.
The vast majority of most retailers’ in-market shoppers are not found on the retailers’ owned websites; they’re found on the open web. With one retail media client, for example, in a single month, 80% of its shoppers that ended up buying never even visited the retailer’s website.
Of course, it can be difficult for retailers to expand from just on-site advertising to adding off-site into the mix. Many retailers are new to the publisher game and may need assistance navigating the advertising technology ecosystem, including the many places they could reach most of their customers.
Individual-level identity and omnichannel reporting can solve for top retail media inefficiency drivers. Epsilon’s research discovered that at least half of retail media networks are ineffective at targeting and measuring digital media campaigns. The good news? There are solutions. The following two attributes are essential to combatting suboptimal targeting and reporting:
Individual-level identity: The underpinning of effective targeting, activation and reporting is identity. People-based identity resolution enables activation of personalized ads across every touchpoint.
Omnichannel reporting: An omnichannel solution allows brands to evaluate campaign performance seamlessly and measure outcomes connected to a real person across on-site and off-site media activation.
By having strong identity and an omnichannel solution, customers receive more unique messaging, and retailers can better analyze, optimize and accurately measure brand campaigns.
Brands and retailers seem to share common priorities for their retail media experience. Brands want an easy-to-use retail media network with ample inventory—and retailers want to provide it.
Epsilon’s research discovered that 75% of respondents believe the quality of advertiser experience and amount of inventory available are the most important aspects of retail media for their organizations.
Brands seek user-friendly retail media networks with robust ad inventory, and retailers are willing to meet this demand. Both parties also recognize the importance of a seamless and efficient advertising experience. Off-site advertising capabilities are a win-win in the inventory department because they ease the on-site burden many retailers are facing: their websites are already packed with ads.
Accessing comprehensive reporting and performance data downstream is also a big goal for brands. The ability to analyze and evaluate the results of their investment is highly valuable. The more seamless and user-friendly the reporting process, the more likely brands are to continue investing with that retailer. This creates a circular growth loop, benefiting both the brands and the retailers involved.
Data collaboration is a recognized retail media value-add. In Epsilon’s research, 70% of respondents stated that data collaboration is highly important to their advertising strategy. Brands and retailers recognize the value that data collaboration brings to retail media networks: 37% of respondents already have data collaborations in place, and 47% stated their organizations are actively pursuing data collaborations.
Data collaboration technologies such as clean rooms can play a vital role in facilitating collaboration, activation and measurement with first-party data in a controlled and privacy-safe environment. Clean rooms enable brands and retailers to work together more comprehensively, gaining valuable insights into their target audiences and developing effective activation strategies.
Minimizing the number of retail media providers can create better shopper experiences. Epsilon’s survey found that 64% of respondents agree that retail media networks with multiple technology providers have a negative impact on shoppers. Why is this?
It starts with retailers. With a fragmented tech stack, retailers will have issues with inconsistent identity across partners. Data loss occurs between different partners, which reduces overall ability to scale. In turn, customers may then be over-messaged and get frustrated, or under-messaged and missed entirely in their buying journey.
Brands are well aware of this issue and its impact on their investments: They know they’re paying for wasted impressions due to inefficiencies across the retail media ecosystem.
To thrive in the future of retail media, retailers and brands need to further explore these opportunities. And while it might sound like a lot to take on, it is achievable with the right partner. By elevating their retail media game, retailers and brands can unlock new opportunities, drive growth and deliver the kinds of personalized advertising experiences shoppers crave.
This article was originally published on Adweek, June 2023.
