Major retailers are expanding their digital advertising capabilities and using retail media to cater to consumer brands.
To monetise their properties, retailers are exploring different ad-supported platforms, such as in-store radio stations and video displays on shopping carts that showcase products relevant to the weather and time of day.
The shift away from physical stores has allowed retailers like FairPrice in Asia Pacific to offer more innovative online advertising opportunities to some of the world's largest brands.
Last November, for example, Singapore-based FairPrice partnered with The Trade Desk (TTD) to allow brands and agencies to leverage its retail data.
Nguyen Vo Trung Hieu, head of performance marketing at FairPrice Group tells Campaign Asia-Pacific that although retail media has been around for years, recent technological advancements have made this channel more appealing.
In addition, with the phasing out of device identifiers like Apple's App Tracking Transparency and soon-to-be cookie deprecation by Google, new data sources are critical to preserving the value of relevant advertising.
"One area that has changed in the last 18 months is the ability to leverage data to gain more meaningful insights into customer behaviour," says Nguyen.
"The recent increase in ecommerce and loyalty programmes has created an opportunity for us to leverage our valuable shopper data in service of brands that want to better connect with consumers."
FairPrice collects various information about its customers over time, such as their behavioural data, web engagement data and data from its loyalty program and through its properties like its supermarkets and bank.
The retailer claims to have access to over 90% of Singapore's households, including over 2.3 million loyalty customers and 1.1 million monthly active app users.
Nguyen explains by leveraging this retail data generated using sales and membership data over a long period, FairPrice can help brands execute retail media campaigns at scale.
Such pseudonymised sales conversion data help brands identify trends and gaps, which is vital for formulating marketing and media planning strategies.
Retail data in action
As a part of the beta testing, FairPrice used its Deepavali campaign in October 2022 to test the effectiveness of TTD's Unified ID 2.0 (UID2), increase its reach and drive conversions by targeting 'past Deepavali purchasers' simultaneously.
FairPrice compared two methods that are accessible on TTD, building different lookalike (LAL) targeting audiences from each of them.
By directly comparing these two data sets across its Deepavali campaign with equal budgets allocated to each onboarding method, the retailer determined that the UID2-powered LAL audience performed better than the LAL audience created from device IDs and mobile advertising IDs (MAID).
The first method was importing the device IDs and MAIDs through an API. The second method was through the onboarding of our customers' hashed email addresses.
TTD's marketplace of partners expanded audience reach by translating hashed email addresses into UID2 identifiers matched to multiple devices and channels. This extended the reach compared to a single cross-device partner.
Early indications suggested positive outcomes. For example, FairPrice saw a 33% lower custom cost per acquisition at US$0.04 compared to US$0.06, a 23% lower cost per thousand impressions (CPM) at US$1.04 versus US$1.36.
The retailer also achieved twice the number of the scale, reaching a million more potential users.
"Onboarding first-party data and activating that data using UID2 essentially allows us to reach new customers who share similar characteristics with our current customers who have made at least one purchase at FairPrice," explains Nguyen.
"As such, we were able to target more effectively and improve the efficiency of our campaign. Aside from strengthening our conversion rate, we worked on reporting and measuring identity matching and advertising performance."
Nguyen points out this contrasts with walled gardens, where advertisers do not get a transparent view of their data and campaigns' performance.
A transparent view enables FairPrice to optimise our data across all digital advertising channels with granular reporting on campaign performance.
Vivek Misra, senior director of data partnerships at TTD, says advertisers that start activating first-party data today have the advantage of building, testing, and optimising seed audiences to develop always-on strategies.
He observes that brands that are not prepared will be left behind as the internet shifts towards authentication.
"As we move into an opt-in internet where consumers select what they want to follow or how they want to engage with brands and retailers, brands will need a seamless and secure way to activate their CRM data and more accurately match and measure it across publishers, channels, and devices," Misra tells Campaign Asia-Pacific.
The future of retail media
Retail media will be a shining light in the advertising industry in 2023. However, much work still needs to be done before it can fully live up to its potential.
The growth of retail media requires the establishment of common definitions, rules, and standards, better adtech to keep up with expectations, and widespread industry education.
Nguyen is bullish after seeing the results of increasing FairPrice's reach and driving conversions, saying the retailer is focused on giving brands access to its audience and sales data to run self-serve campaigns at scale.
"We can now allow our advertisers to use omnichannel campaigns, third-party data marketplace and measurement marketplace," explains Nguyen.
We believe this is what advertisers are looking for – to have all of these capabilities in a single self-serve platform. We will continue refining our approach as more advertisers leverage our retail data."