What is Retail Media?
Retailers are becoming ad publishers by transforming their data and online platforms to sell valuable audience data along with advertising spots. Retail media buys can be executed on retailer sites or programmatically on social and display channels using retailer first party data. This data enables consumer brands to reach online shoppers by targeting ads based upon keyword searches, purchase history and other invaluable data collected via SKUs, purchase scans, and loyalty programs.
The recent growth of retail media has been astronomical. Amazon Ads alone is expected to exceed $32B in revenue by 2023. Although many players are entering the market (Best Buy, Target, Kroger, WalMart etc.), Amazon still dominates with an estimated 76.2% of US ecommerce channel ad spending in 2021 (eMarketer). Brands are leaning into this trend with 76% of marketers planning to frequently utilize point of sale data in 2022. With the CPG clients I’ve worked with at Coegi, we recognized the emerging trend of retail media and made sure we were incorporating this must-have tactic into our connected commerce strategies.
Reach Your Customers Wherever They Are With Retail Media
Retail media advertising empowers brands to be exactly where your customers are and deliver personalized experiences on and offline.
- How can you reach customers in-store?
- Where can you reach them when shopping online?
- How can you reach audiences when they’re scrolling through socials?
Retail media lets advertisers be more data-driven and provides a reliable targeting solution. Targeting these shopper audiences creates the opportunity to deliver an efficient, personalized experience. The icing on the cake (or should I say cookie?) is that most retail data is cookieless, so we are able to utilize it not only now, but into the future.
With the landscape becoming increasingly cluttered, most CPG brands won’t have the budget to be present on every retail media platform, nor is that in their best interest. To make the most impact, brands need to research and test where their audiences are spending time so they can show up when and where it matters most. After making your selections, it’s also important to have unique strategies for each retailer. Your messaging and execution should look different on a Best Buy audience dataset versus a Wal-Mart audience.
Connected Commerce Strategy
Connected commerce strategy is a concept developed by Skai. It means thinking about how you can connect all points of the customer commerce journey together. As retail media networks become more sophisticated, we are seeing more full-funnel implications. The Trade Desk reported that 39% of marketers surveyed use retail media advertising to drive brand equity scores and 44% use it to track sales growth. Take advantage of ecommerce site placements as well as programmatic placements to find prospecting audiences and track them through the funnel with closed-loop measurement.
For example, you could target an upper funnel retail media audience on social and display and then bring those audiences through the funnel by serving them a retargeted ad when they are on Target.com actively shopping. Or, you could use Facebook conversion ads to drive to your Amazon product page and then utilize that Amazon traffic to develop a retargeting audience for those who did not convert. For best results, I recommend brands think about strategically flighting media together and not having standalone strategies with just retail media. Having supportive media across channels has proven to increase results for our clients at Coegi as compared to solely running onsite retail media buys.
Additionally, we recommend utilizing Amazon as a point of discovery along with Google Paid Search. When people start researching products, almost 75% start with Amazon. They are exploring, reading reviews, and connecting information to make a purchase decision. It’s important to look at the whole ecosystem of commerce, which is now massive, and make sure all those pieces of the puzzle are connected. Understand what channels can help each other to incorporate a true connected commerce strategy.
“Retail media presents retailers with an opportunity to better personalize their e-commerce sites, improve discoverability of products, and better monetize their first-party data. Likewise, it offers brands an opportunity to better reach their end customer and access more granular insights into marketing performance and effectiveness..”
– Forrester Now Tech: Retail Media Solutions Q2 2021, Colin Colburn
How To Measure Retail Media Success
The primary drawback to retail media, currently, is the segmentation from publisher to publisher. Wal-Mart data lives in one silo, Target data lives in another, and so on. Marketers have to be very mindful of where to invest for maximum impact. Using a trial and error method to test and learn is necessary to see where your customers are responding because we do not see integration across channels like we are accustomed to with other programmatic media.
When creating a retail media measurement strategy, look to outside partners who can aggregate data sets from the multiple publishers you are working with and measure the impact from a big picture lens. Coegi works with partners so we can directly tag our in-market media and they can measure it back to UPC scan and sales level data showing the direct impact of media on sales. With these partners sitting on top of all the data, they can feed back real-time information so we can make informed optimizations and identify opportunities to improve business outcomes.
“For marketers wanting to take full advantage of retail media’s potential for reshaping attribution, and their overarching strategies for guiding consumers through the purchase funnel — or true “closed-loop marketing” — managing across retail data environments will be key” – The Trade Desk
A more sophisticated approach is needed to ensure every dollar is spent wisely and effectively. This advanced insight from media and measurement partners provides the competitive edge needed to maintain efficiency in this competitive market with rising costs and influx of demand.
Retail media allows brands to:
- Utilize 1st party shopper data to reach customers wherever they are
- Consider and understand the full shopper experience from discovery to purchase
- Be data-driven and track closed-loop measurement, prioritizing cookieless solutions whenever available
- Clearly understand the impact of ads on consumer behavior and sales
At the end of the day, retail media is a must-have tactic for CPG brands, especially for challenger brands looking to break through the competition. Explore unique connected commerce strategies for your brand to maximize the impact of your media spend and drive customers through the purchase funnel with efficiency.