Mark these words: Retail Media!
As online shopping popularity has been growing among consumers, retail media is now way more than just a buzzword in the advertising world. It is now quite popular with brands.
In the aftermath of the pandemic, people are shopping online, now more than ever before, thus leading to a shift in consumer behaviour and, consequently, changing the way brands promote their products.
The advent of technology has brought a massive transformation in how businesses operate, especially in the e-commerce industry. Retail Media Networks have emerged as game-changer in the digital advertising world, making it easier for brands to connect with their target audience. So, no surprise here, nowadays, e-commerce sales and/or e-retail sites are a popular (probably the most!) avenue for brand advertising.
And while brands are now accustomed to targeting their audiences (through social media or Google searches), now it’s time to take a step forward and get the most out of retail media networks and redesign a full strategy around it, to fully connect with customers while they shop.
Retail Media Advertising: the rise of the Beast
In recent years, the advertising landscape has undergone a significant transformation, with digital advertising taking over traditional methods.
As consumers continue to shift their attention to online channels, advertisers have been forced to adapt their strategies to remain relevant.
One of the biggest trends emerging in digital advertising is retail media advertising.
According to an article published on Xenoss, retail media can be defined as an advertising“form of promotion on the media inventory of the retailer, with advertisers paying a platform or marketplace to showcase their products at or near the point of sale”.
This form of advertising involves retailers leveraging their online platforms to sell advertising space to brands looking to reach their target audience.
This growth of retail media advertising can be attributed to two main (and frankly strong) factors:
1. Data is king
For starters: it’s all about data. Due to the rise of e-commerce, retailers now have vast amounts of data on their customers, including their browsing behaviour, purchasing history, and interests. This data can be leveraged to create highly targeted advertising campaigns that hit the spot and reach the right people at the right time.
2. Monetizing opportunity
Secondly, retailers are increasingly looking for new revenue streams, and advertising provides a way for them to monetize their online platforms. By selling advertising space to brands, retailers can generate additional revenue while providing a valuable service to their customers.
According to IAB: “retail media is now a key media channel within the digital advertising industry with IAB Europe forecasting that retail media ad spend will reach €25bn in Europe by 2026. As brands increase their investment in Retail Media advertising – largely driven by the depreciation of the third-party cookie – it is important that the industry comes together to discuss the key opportunities and challenges”.
This is actually the premise for the event they’ll be promoting in April, to discuss how the retail media market in Europe is developing.
Aligned whit this idea, there are also the IAB infographics showing that 92% of “advertisers are already partnering with retailers to reach their consumers” and of “35% of buyers cite access to retailer first data party as a key opportunity of retail media partnerships”.
This is why most companies opted to get online (if they were not there) or – for those who were already there – reinforced their presence. No wonder some companies took the lead and enhance the potential of retail media as soon as it gave its first signs. In Portugal, Wise Pirates was the one riding the crest of the wave, by providing services (from SEO and optimized content to e-commerce, data science, marketing automation, social selling, and so on) to enable companies to boost their online results.
Why retail media and how does it work?
Retail media advertising operates through the (of course!) retail media network.
Going back to the Xenoss article, a retail media network is a “unified ecosystem the retailer set up to let brands advertise on their website, app, email distribution, and other digital properties. In a nutshell, it is the digital version of in-store advertising and can have a variety of formats that allow advertisers to hit the shopper with the right message at every point of the buyer’s journey from product consideration to the point of sale”.
No wonder both retailers and brands are getting on board with this retail media trend, as these allow them to target specific audiences.
Given the current scenario, retail media networks are now a go-to platform for e-commerce advertising because they enable retailers to use customer data to identify the interests, and preferences of their target audience and then offer this information to brands. As a result, brands can create highly targeted advertising campaigns that resonate with their target audience, leading to increased conversions.
In addition to this, retail media networks also provide valuable insights into their customers’ behaviour, namely, their purchase history and click-through rates. Brands can then use this information to optimize their advertising campaigns, leading to better results.
It’s easy to see that this has fully disrupted the advertising landscape. By offering highly targeted advertising opportunities, retail media networks have enabled brands to reach out to their customers in a way that was not possible before. This has resulted in increased conversions and better return on investment (ROI) for brands.
On the other hand, retailers can also monetize their e-commerce sites effectively, generating additional revenue streams, and leading to increased profitability, thus being a win-win situation for everyone involved.
Taking the Xenoss article once again, retail media advertising might “include sponsored products and onsite and offsite displays. Sponsored products are generally the main form used for retail media advertising. They can be placed on a variety of pages on retailer sites such as search results pages, homepages, and product detail pages”.
As an article on Martech puts it: “Retail media networks have turned retailers into ad moguls. That’s a huge change and nobody yet understands all the implications of it. They are also spurring a lot of innovation as marketers rush to capitalize on them. While much of that is online, it’s also happening with in-store”.
Get on board: the boat is speeding up
No doubt that, even if this retail media environment is still fairly new, as the advertising industry evolves, it might become an insightful tool for brands. In fact, having access to these first-party data insights provided by retailers is a must for brands, as it allows them to improve their strategies and campaigns.