by Amy Norton, Growth Director at Incubeta
Retail media has risen in prominence among marketers over the past few years, with the value of the sector forecast to grow by 25% in 2023, and there is good reason why.
In the first instance, ecommerce grew massively as a result of the global pandemic, with more people visiting retailers’ online outlets than before. Wherever you find large numbers of consumers in a buying frame of mind, brand advertisers want to be there. So, inspired by the success of online retailers such as Amazon, traditional brick and mortar retailers started to open up their own digital estate and in-store screens to external advertisers, creating a valuable new revenue stream for themselves.
For brand advertisers who are increasingly restricted in how they target and measure customers with digital ads, retail media offers an exciting range of new possibilities. For example, using daily sales figures to measure the return on advertising spend (ROAS) of retail media campaigns, or serving targeted ads and offers as a customer is physically approaching your product in-store. In a world where first-party data has become vital to understanding consumers, collaborations with data-rich retailers are becoming a crucial component of the brand marketer’s playbook.
The sheer amount of targeting, personalisation and creative storytelling which can now be done via retail media compared to a few years ago is incredible. So, how can brand advertisers make the most of the retail media phenomenon?
Given the continuing economic uncertainty and cost-of-living crisis, brand loyalty is being tested, with many consumers across all categories switching to alternative, cheaper brands. As a result, FMCG brand marketers are under considerable pressure from their bosses at the moment to demonstrate the impact of their campaigns and media investments on brand performance and the bottom line.
One of the key advantages of FMCG brands dealing with a retail media network is the ability to connect with their consumers and drive purchases in real-time, and then accurately measure the success of their highly-focused campaigns. Additionally, it allows them to build closer, stronger commercial relationships with retailers that they wish to work with. It has never been more important to foster the connection between the consumer journey and the media channels that act as touch points. So, discovering new ways to target, connect and ultimately sell to customers by disrupting the ‘walled gardens’ of media, drives the scope of opportunities like never before.
A win-win-win for retailers, brands and customers
The continued growth of retail media means that retailers are entering the market with the aim to monetise digital inventory and commercialise opportunities. In the UK, retailers such as Asda, Tesco, Boots, and Morrisons are already operating their own retail media networks and continuously enhancing their offering for advertisers.
Previously, the marketing funnel has largely been siloed depending on KPIs. However, now that traditional upper funnel channels such as CTV and shoppable video are growing rapidly, a more holistic view between channels is going to be hugely important for brands to commercialise where their consumers are.
From a retailers perspective, the opportunity here is vast, especially for those with brick and mortar stores and loyalty programmes. For SMEs, retail media offers the opportunity to be more customer-driven, rather than budget-driven via the deployment of algorithms. By making the right decisions with their strategy, retailers can take advantage of this customer-driven approach resulting in rapid growth.
The opportunity for brands
For marketers, the once disconnected strategies of ‘branding and performance’ and ‘offline and online’ can be stitched closer together with retail media influencing consumers at the very point of purchase. The door is also open to build brand loyalty through more targeted and engaging advertisements and personalised offers, all built on consumer permission and up-to-date data. Retail media ensures that there is complete transparency when it comes to what data is shared between brands and retailers and how it will be used. This level of personalisation adds lifetime value for both the retailer and brand.
Retail media’s ability to tell more personalised stories helps bridge the gap between online and offline more coherently. It allows brands to expand through retailers and reach new audiences with the use of first-party data, thus creating more tailored and relevant content across channels. It’s important for brands to keep up to date with current trends and developments to stay relevant. However, retail media gives FMCG brands the opportunity to adapt quicker than usual which is necessary for a sector that is constantly evolving.
Incubeta is a client of Bluestripe Communications, part of the Bluestripe Group, publishers of Ecommerce Age.