With a predicted £53 billion to be spent on retail media annually by 2024 (double that of 2021), the potential that this relatively new revenue line holds for retailers is growing at an incredible rate.
But what exactly do we mean by ‘retail media’ and how can retailers capitalise on this potential? Informed by the Retail Media Network (RMN) experts here at Trigg Digital, we’re going to answer these key questions and more…
What Is A Retail Media Network?
A retail media network is an offering through which a retailer gives advertisers access to its first-party customer data and channels, such as the retailer’s store, website or app. This gives brands access to detailed customer personas to improve targeting, as well as access to customers when they are in a purchasing mindset. Because brands are able to target consumers when they’re in the mood to buy, the return on ad spend (ROAS) of retail media advertising is generally better than on classic advertising placements such as print, out of home (OOH) and display ads.
A retail media network works by leveraging a retailer’s consolidated customer data and infrastructure to serve relevant ads and/or product placements to the right audience at the right time. However, as you might have guessed from the words ‘consolidated’ and ‘infrastructure’, it does require the retailer themselves to be some way along in their digital transformation journey. At Trigg Digital, we specialise in helping retailers to catch up with their competitors and set up retail media networks that can monetise their existing customer base and bring in a whole new type of customer – brands.
What Are The Market Drivers For Retail Media Ad Spend?
Source: Insider Intelligence, “Retail Media Networks Perception Benchmark 2022”, March 2022
Retail media networks are among the fastest-growing and most dynamic media formats available and are currently the second fastest-growing major ad channel, sitting just behind connected television (CTV). When it comes to the factors behind their growth, there are four key drivers. These are:
- The ongoing deprecation of third-party cookies and mobile identifiers
As the end of third-party cookies looms, ad sellers (including retailers) have doubled down on the collection and use of first-party data to protect consumer privacy and maintain the level of detail third-party cookies originally enabled when it comes to audience targeting.
- The drop in footfall at brick-and-mortar locations
Driven by the COVID-19 pandemic and the current economic climate, consumers are spending much less in retail stores. For many retailers, this has been the push they needed to seek alternative revenue streams (enter retail media!)
- The shift from physical to online retail
As consumer habits have moved away from in-person shopping, retailers have shifted their focus towards online retail more than ever before. This has helped to redirect the emphasis for marketers, particularly in the consumer packaged goods sector, where in-store ads have been swapped for virtual storefronts.
- The switch to attributable digital formats
Ad performance (particularly ROAS) is coming under intense scrutiny. For many marketing teams, this means that non-attributable formats such as television advertising, OOH, PR and organic social media are taking a back seat – or being combined with attributable elements such as affiliate codes and QR code links – to make way for PPC, paid social media and other directly attributable ad formats.
The 5 Pillars Of A Retail Media Network
When it comes to building a successful retail media network, there are five key pillars to consider. These are…
- Customer Journey Experience
Brands and advertisers seek a superior overall experience, including easy-to-use back-office management, omnichannel ad serving orchestration, campaign measurability, billing and revenue recognition, alongside in-depth real-time insights to help them determine their ROI and other key metrics.
- Traffic
The consumers visiting the store and/or utilising digital platforms on which the network is built must meet the advertisers’ marketing objectives – i.e. the retailer needs to be able to prove that they can capture the brand’s target audience.
- First-Party Data
Particularly as we prepare to phase out third-party cookies, first-party data (usually gathered through loyalty programmes and website, social media and app pixels) is becoming more and more valuable. When it comes to attracting advertisers to use a retail media network, quality, scale and availability of first-party consumer insights are major value drivers.
- Targeting
The ability to target specific consumer demographics that demonstrate specific behaviours like purchase intent, at the right time, is crucial to advertisers. Retail media networks must be able to provide this level of precision at the very least if they hope to entice brand marketers.
- Measurement
As mentioned previously, insights and the ability to determine how a campaign is running vs. its KPIs is incredibly important to any advertiser. Therefore, the ability to accurately measure these KPIs to determine the impact of each ad placement (and the potential reasons for this impact) is crucial.
The Role Of Salesforce In A Retail Media Network
Look out for our next retail media blog, which will explore the many ways that Salesforce can help you to accelerate your retail media transformation with solutions that are flexible, scalable and designed to maximise return on your investment.
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Here at Trigg Digital, we’ve developed a killer retail-media team with all the Salesforce skills and industry knowledge they need to help set up or improve your retail media network.
Get in touch to find out more…
+44 203 239 8492
hello@triggdigital.com
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