2023 is set to be a big year for retail media, but what are the opportunities and challenges the channel presents? Julie Jeancolas, Global Head of Product, Strategy & Partnerships at Dunnhumby; Alex Crowe, Global VP Omnichannel Strategy at Criteo; and Nick Henthorn, VP Sales at InfoSum discussed the emerging digital advertising medium at the recent 2023’s Media Landscape: Delivering value in a fragmented world event from mediarithmics and New Digital Age.
There’s been a lot of talk recently about retail media and how it could – and will – hold the key to the future of digital advertising. Now, retail media is far from a new concept within the digital world – Amazon has been at the forefront of the approach for over a decade – but, since the pandemic in particular, the industry has cottoned on to just how much of a benefit the approach could have for everybody else as well.
With UK digital retail media spend reaching £176 million in 2022 (excluding Amazon), according to IAB UK, it’s fair to say that the channel is moving in the right direction, and 2023 is set to be a big year. With that in mind, the recent 2023’s Media Landscape: Delivering value in a fragmented world event from mediarithmics and New Digital Age featured a panel to discuss the emerging channel.
Driven by data
One of the driving forces behind the growing interest in retail media has been the “explosion of data” on both the retailer and media side, according to Nick Henthorn, VP Sales UK at InfoSum.
“This has been driven by the pandemic and the number of eyeballs watching things like CTV, but also in the sense that people went online to shop for the first time and grew there. But then this has been accelerated further by initiatives from Tesco, Sainsbury’s, with the plan of actually genuinely giving that value exchange back to the customer,” explained Henthorn.
He added that this has created the “perfect storm” to drive better targeting for CPGs, thanks to better modelling and increased scale.
Alex Crowe, Global VP Omnichannel Strategy at Criteo, highlighted the number of loyalty programmes that now exist to help retailers collect data, joking, “who even knew you could be loyal to all these different businesses? You can’t do anything without a loyalty card anymore.”
And, that loyalty data, coupled with the amount of data coming through ecommerce activity, is opening the door to a more joined-up experience for the consumer, and the brands hoping to reach said consumer.
“All the fun comes with data,” said Crowe, alluding to the potential of connected commerce. “How do I continue great conversations with my customers in ecommerce that extend into the open web and physical retail?”
Clearing the hurdles
While this is a very encouraging time for the worlds of retail and digital advertising, retailers have plenty to consider in order to deliver a successful retail media strategy. Perhaps most importantly, retailers have to remember that their core business isn’t media and advertising, so they have to ensure any retail media strategy doesn’t negatively impact their prime role.
“If you hinder the customer experience, you’re going to damage your core business,” said Julie Jeancolas, Global Head of Product, Strategy & Partnerships at Dunnhumby. “When we work with our clients, we show them how to put personalisation and relevance at the core to support their core business. When you run a retail business, you should make sure that your proposition enhances the customer experience.”
According to Henthorn, this presents another issue for retailers – they’re good at buying and selling things, but may not have sufficient knowledge of media.
“They need to think about building a data science business that’s enabling the magic to work,” he said. “Without a CDP, without something to wrangle all the data together into something useful within the organisation, you’re going to struggle to actually target segments in the first place. Without the data science tools to apply onto that to then build the model, you’re going to struggle.”
However, even with the expertise in place, retailers should be looking into ways they can assess the quality of their data, according to Jeancolas.
“That’s another thing you have to think about,” she said. “If you have data, what is the quality of the data? Email is not always sufficient to achieve good match people for your offsite activity. Having a phone number, address and postcode will drastically improve your reach. And this will be even more important in a post-cookie world where clean rooms emerge to let retailers, publishers and brands match their data achieving much better match rates.
“Quality of data is also essential to support personalisation. You cannot build good predictive models on poor data sets. Garbage in, garbage out.”
The retail opportunity
There may still be much to consider for retailers when exploring retail media within the world of digital. But it also opens the door to a wealth of opportunities, particularly when looking at extending beyond the retailer’s owned platforms.
“Retail media has been very much retailers thinking about their own domain,” said Crowe. “In commerce media, there are media buying agencies. There are multiple different opportunities – be that CTV, social, digital screens, audio – that can all come together in a meaningful way. But also, with incremental demand.”
Is this the year for retail media to explode in the digital space? It looks like it’s safe to say so. But it can also be said that the opportunity can go much further than that to create a truly positive experience for all stakeholders.