Retail media networks have emerged as a significant trend and major opportunity for brand advertisers in 2021, as they attempt to recover from the impacts of the pandemic.
In basic terms, retail media networks are when retailers make their digital and physical locations accessible to other advertisers, for example, third-party brands advertising on a supermarket brand’s website. The concept of retail media networks has been around for a few years, but most brands are just getting to the point where they have the right technology stack and the appropriate mindset to make the most of the opportunity.
A variety of factors are attracting brand advertisers to retail media right now. Aside from the benefits of moving closer to the customer online, retail media offers an entirely brand safe environment and provides advertisers with access to the retailer’s first-party data for targeting purposes—side-stepping the problems associated with third-party cookies.
What’s more, with retail media, spending can be closely tracked and allocated to deliver impactful brand messages at any stage of the consumer’s journey, from awareness through to conversion. If you think about the stages of the purchase funnel (awareness, consideration, pre-purchase and purchase) often there hasn’t been enough investment around the ‘consideration’ and the ‘pre-purchase’ stages. We’re now seeing a lot of ad money flowing into the middle of the funnel.
Food for thought
Another reason for the rapid rise of retail media networks as an advertising channel is that it has become much easier to measure and attribute their impact. In terms of performance, within a State of the Retail Media Industry Study commissioned by Criteo, 79% of brands say they have seen an increase in ROI/ROAS thanks to investments in retail media. A Digital Shelf Institute study estimated that for every $7 spent on a global omnichannel platform, as much as $11 is spent in-store on the advertised products.
Previously, there was always an issue of personalisation versus reach for marketers: digital media could do personalisation well, but often didn't have the reach that brand marketers were looking for; meanwhile, offline media like TV and radio had lots of reach but no options for personalisation. With retail media, the ability to adapt and serve digital ads at scale that recognise the physical context of the consumer is a real game-changer for marketers.
Retail media offers a new and unique opportunity for advertisers to engage customers in brand conversations. The food court and restaurant space, for example, is a major channel that is relatively untapped and under-utilised at this point. Firstly, you have a captive audience, where they are sitting in one location for at least 30 minutes or so. It’s not a cluttered space, where customers are being bombarded by multiple messages at once; minds are open to absorb new information and communication. That’s a great place for brands to be present and start ‘consideration’ and ‘pre-purchase’ conversations with customers.
The impacts of retail media networks on brand performance can now be measured as part of an omnichannel campaign. Marketers should be working towards providing seamless experiences for their customers by working out the various journeys customers take on their way to purchase and identify the points of friction in those journeys to help better target media spending.
If you're a brand marketer, this is a great time to experiment with retail media networks. The opportunity is real and verifiable. Whether it’s a small test, or a larger experiment, it would be a big mistake for brand marketers not to get involved.
Vivek Kumar is director of strategic marketing and omnichannel monetisation at FairPrice Group.