The retail industry has experienced significant changes in recent years. Most notable was the Covid-19 pandemic, which saw brick-and-mortar stores temporarily close and online retail grow at an unprecedented rate. However, the seismic growth of online shopping hasn’t been the only change the retail industry has experienced. Emerging in-store technologies such as interactive displays, scan-as-you-shop devices, and automated checkouts have provided enormous opportunities for retailers.
Retail Media Explained
Before discussing the subject further, let’s clarify what retail media and retail media networks are. Retail media is a form of advertising and promotion that enables brands to promote their products directly to the customer. Retail media occurs at the point of sale and can be online or offline. Online retail media promotion could be a banner ad or sponsored content on a retailer’s website. Examples of offline retail media include adverts on endcap displays in-store or on the screen of ‘scan as you shop’ devices.
Retail Media Networks are assets owned by a retailer or operated by a third-party that displays advertisements. These networks use the retailer’s first-party shopper data to target ads effectively. They can include various channels such as websites, mobile applications, streaming services, email communications, physical stores, and external partner platforms like social networks and digital billboards. They have become a crucial income stream for retailers and are just as valuable to brands that pay to have their products appear on the retailer’s website or app. Omnichannel retail media combines online and offline approaches to maximize the potential interactions between consumers and the brand.
Why Invest in Retail Media?
When a retailer invests in retail media, they are focusing on improving the advertising opportunities within their own channels. This could involve optimizing in-store advertising placements, improving online product recommendations, or enhancing search advertising capabilities on their e-commerce platform. The investment is aiming to improve their existing assets to increase advertising revenue and improve the shopping experience.
For retailers, recognizing the value of retail media is vital. Research by Statista shows that 25 percent of global brands that responded to their survey stated that they planned to increase their retail media budgets significantly in 2023. A further 35 percent reported that they planned to slightly increase their retail media budgets. Failing to invest in retail media means that retailers could miss the opportunity to profit from brands that plan to invest in these advertising platforms. This research is backed up by Advertiser Perceptions, which forecast that retail media will account for 23.5 percent of all digital marketing advertising spend by 2025. So, now is the time for retailers to invest in retail media.
Why Invest in Retail Media Networks?
By investing in a retail media network, you create a platform that offers both digital and physical advertising opportunities. By developing a more sophisticated system, data can be integrated better and targeted advertising can be applied across owned and partnered assets. The investment is broader and more strategic, aiming to establish a system that attracts external brands to advertise across the retailer’s network, using the retailer’s data and reach to provide precise targeting and potentially higher returns on advertising spending.
According to Mimbi, there are now 226 retail media networks (RMNs) worldwide. Deloitte surveyed 450 Director-level (or above) leaders of US retail companies, and found 64% were planning to implement a Retail Media Network by the end of 2024. It is vital for retailers to invest in retail media networks or they will be left behind by their competitors.
Understanding Omnichannel Retail Media Networks
In the highly competitive retail landscape, taking a targeted approach to product promotion and advertising is essential to maximize results and get the best ROI. Omnichannel retail media networks are the ideal solution to facilitate this targeted approach to advertising.
Omnichannel RMNs are a dynamic form of advertising that uses different channels to reach consumers across multiple touchpoints, leveraging platforms like e-commerce sites, social media, apps, CTV, OOH, and more. This approach ensures that consumers receive a targeted, seamless shopping experience. It enables brands to deliver consistent messages and reach customers across almost every touchpoint. They can encompass social media, websites, apps, and in-store customer experiences. This enables brands to engage effectively with their potential customers and deliver a targeted customer experience online and offline.
Benefits of Omnichannel Retail Media
Developing an omnichannel strategy can deliver significant benefits and puts businesses at the forefront of this emerging marketing technique. Taking an omnichannel approach helps brands reach customers more effectively, improves the customer experience, and opens up more channels for consumers to purchase. This increases sales and helps raise brand awareness, which drives traffic to the website for customers to find out more about the brand and its products.
One of the main benefits of using an omnichannel strategy is that it benefits not only the retailer and brand but also consumers. This targeted approach enables consumers to discover new products tailored to their needs and interests and multiple methods to find out more and purchase the products. Omnichannel retail media also allows consumers to start purchasing via one channel and complete it using a different channel.
Research shows omnichannel customers are more valuable to businesses. The report examined the shopping habits of American grocery shoppers and found that omnichannel consumers spend 1.5x more each month and are 3x as loyal as customers who only shop via digital channels.
In-store tech and how it can fuel omnichannel retail media strategies
Combining in-store and digital environments is a highly effective strategy to drive sales. In-store tech plays a vital role in this success by facilitating a personal customer experience in-store to close the gap between the physical and digital environment. This enhances customer engagement and provides valuable data to help tailor an even more personalized shopping experience.
In-store tech to consider using includes interactive displays, scan-as-you-shop devices, and automated checkouts.
Omnichannel is the Future of Retail Media
Previously, online shopping was seen as the enemy of brick-and-mortar stores. Omnichannel successfully brings online and digital shopping experiences together to drive even greater value for retailers and brands.
Making omnichannel advertisinga central component of your strategy is vital to stay at the forefront of the future retail landscape. Introducing omnichannel advertisingis central to gaining valuable insights and delivering personalized shopping experiences to every customer. This seamless approach is highly effective at building customer loyalty and driving sales.
Conclusion
Technological developments in retail have meant that the industry is now evolving fast. Being a part of the evolution is essential for retailers to safeguard the future of their businesses, but staying up-to-date with the latest developments in retail media and getting on board with them early is crucial. The Drum highlights artificial intelligence as an increasingly important method of targeting and engaging audiences with personalized content. Non-endemic partnerships are also predicted to increase to allow brands to reach audiences outside their traditional marketplaces.
Investing in omnichannel retail media is crucial, but its effectiveness depends on the successful merging of the different channels and the ability to manage them effectively.
Are you looking for a platform to manage your retail media advertising inventory? Contact a member of our team today.
Originally posted on ADvendio.com on 30th July 2024.
