.png){kind=logo}
They’re the third wave of digital media, the fastest-growing digital media channel, and a win-win-win for brands, retailers and shoppers. But what your C-suite needs to know is what’s behind all the hype. Why should retail media networks matter to your business? And why now?
In simple terms, retail media networks (RMNs) allow brands to use the data retailers collect about customers to better target their advertising in-store and online. That advertising has most commonly been on the retailers’ own online properties, but increasingly the data is now being used to target advertising further afield.
So RMNs should matter to any business that sells partly or wholly through third parties. Suddenly, you’ll know who your customers actually are and be able to target them more effectively.
What’s more, if you advertise on a retailer’s website, some customers will complete their purchase without leaving the site. So, you’ll be able to test different campaigns and creative against different segments, to see what works well (and what doesn’t). You’ll also be able to connect spend directly to results, due to the closed-loop nature of the process.
Even off-platform, using retailer data to inform your ad targeting means you’ll be better able to connect with potential customers, who are increasingly demanding more personalised experiences from brands in return for their attention (and their increasingly scarce money).
But you know all this already… so why do your C-suite need to sit up and take notice now?
Why now?
The digital landscape is on the verge of its biggest change for 25 years. In early 2024, Google will stop supporting third-party cookies in Chrome, following similar moves by Apple with Safari and Mozilla with Firefox. As a result, only one browser in ten will still be 3PC-friendly.
It’s the same story on mobile. A series of changes to iOS and Android have made it harder for advertisers to track and attribute users interactions with their ads. That’s why the past few years have seen businesses scramble to collect first-party customer data, for example by setting up email newsletters (with varying levels of success).
Meanwhile retailers have been collecting customer data via their loyalty schemes for years. Boots, for example, holds rich data on 17m Advantage Card users and 21m Brits are signed up to the Tesco Clubcard. Combine that with recent advances in technology that allow data to be shared between businesses without compromising privacy, and they’re sitting on the single most powerful solution to the post-cookie conundrum.
All this explains why RMNs are currently the hottest topic in marketing. Insider Intelligence estimates that retail media will be a £37bn market by the end of this year globally. They also predict growth of £8bn a year; by 2027 they expect it to be more valuable than linear TV.
And you shouldn’t just take our word for it; other people think you should be investing in RMNs too. In 2021, Goldman Sachs Equity Research produced a paper saying: “The rise of retail media, like the rise of trade marketing in the 1970’s, will create another vector of separation between leaders and laggards among CPG companies.”
Beyond the first steps
What’s really exciting is that this is only the beginning. Brands are already seeing better marketing performance – up to five times better – when retail media is at the core of a campaign. But beyond that, retail media also offers the potential to bring other elements of campaigns together, show how the channels work cumulatively and begin to properly optimise marketing spend.
At Capture, we’re already incorporating instore, around store (OOH etc) alongside digital and social (using targeted segments) into the equation, delivering more robust and cohesive user journeys, with data at their heart. Our channel selection has broadened, with a more robust opportunity to plug into data for targeting, and greater measurement capabilities (such as the rise of CTV). The future is going to belong to those who take advantage of the access to data and technology to enable true omnichannel measurement, attribution and optimisation.
And with these advancements comes a blurring of the lines of where internal budgets should sit, and a convergence of business priorities. RMNs and the data provision can span traditional shopper, media and brand budgets – making the internal conversation that bit more complicated. But, what is clear, is that internal red tape cannot hold up brands ability to act now.
You don’t have to go it alone
It’s a lot to think about, but there is help out there.
If you want figures to show global market growth, check out Andrew Lipsman of Insider Intelligence’s NRF Presentation from January 2023 and the latest webinar from the IAB for a more UK centric view
If you want a view on the growth and potential of RMNs, have a look at our own CEO Sam Knights in discussion with Skai
And if you want a consolidated view pulling in wider resources, have a look at Aaron Gilboe (CCO at retail solutions practice) article on Retail media presents new business opportunities
Many of the biggest names in UK retail already have established media networks, and more are setting them up. A lot of them are being helped and advised by our parent company, SMG, and, at Capture, we have relationships with them all – from Dunnhumby, to Nectar to MMG. We’ve also got more than a decade of experience in delivering strategic campaigns for FMCG brands. If you’d like some help getting your C-suite to appreciate the size of the retail media opportunity, and why they need to move fast to take full advantage of it, drop us a note. We have been touring some of our biggest clients, bringing this to life with key stakeholders internally – and would welcome the opportunity to do this with you too.