SMG have specialised in retail media for 15 years. Having led within our industry across this time we are delighted to see retail media broadly championed across the global advertising industry today. Retail media is an important source of revenue for retailers and can have a significant positive impact on profit delivered. Although this has always been the case, several trends have led to increasing volumes of retailers, agencies, brands, software providers and more engage with the opportunity. Most notably, the demise of the third-party cookie and the subsequent value boost for retailer’s first party data. What follows below are some thoughts on how retailers can grow their retail media at pace, within a highly competitive environment.
Evolve perception: Put simply, if investment in a retailer’s media estate is seen as a cost of business by brands investment will not grow. Indeed, in today’s competitive environment where this perception exists, retailers with a mature ‘supplier funding programme’ risk decreasing investment over time. As far as possible retailers should look to detangle retail media investment from broader trading agreements.
Collaborate marketing: Following the above, brands want to deliver ‘true’ collaborative marketing with retail partners vs. tactical executions and retailers who can offer this will win attracting investment from marketing pots, increasingly managed at a channel agnostic level. Specialist media planning resource and tools will be essential to delivering ‘true’ marketing with partners.
Agency service levels: Providing advertisers with a polished agency service is essential in today’s landscape. This often opens an interesting and new power dynamic between retailers and suppliers’ brands who both wear a ‘client’ hat within their relationship. Retailers should not fear this dynamic and lean into the opportunity.
Provide sophisticated targeting capabilities: The boom in retail media today is being driven in large by brand’s desire to access retailers first party data. Retailers must lean into this need, often requiring new investments and revised data and technology strategies and partners.
Unique value proposition: To attract brands to advertise within their estate retailers must offer unique value propositions that differentiate them from competitors. This could include access to exclusive customer data or the ability to target specific demographics that are difficult to reach through other channels.
Create engaging and relevant adverts: Retailers must work closely with brands to create engaging and relevant adverts that customers are likely to engage with. Retailers should always consider their omni-channel estate in any retail media growth strategy, as owned channels including in-store are not only often of high value to brands but are also the most profitable opportunities.
Implement transparency and data privacy measures: As customer data privacy concerns continue to grow, retailers must implement robust transparency and data privacy measures to build trust with customers and protect their data.
Measure and report on campaign performance: Retailers must provide brands with accurate and transparent measurement and attribution data to demonstrate the effectiveness of their advertising campaigns. This is the number one ask of brands today, and again is important to secure investment often managed in a channel agnostic way.
In conclusion, growing retail media revenue requires a range of tactics to be employed at any one time. In this retail media boom, retailers should ensure they take the time to set up for success, de-risk channel switching across base investment and ensure balanced revenue and profit growth.