Although retail media has been present in the UK market for decades, in recent years it has become an increasingly important revenue stream for retailers. By leveraging media across store estates, eCommerce platforms, mobile apps, and increasingly off-site digital opportunities, retailers can develop valuable revenue streams and improve brand loyalty. In this blog post, I’ll discuss some of the reasons retailers can get excited about the retail media opportunity.
1. Valuable revenue stream: For retailers not currently monetising their media assets with brands retail media represents a totally new revenue stream. What’s more, retailers that keep discussions on retail media investment outside of trading agreements can boost profitability while remaining competitive from a pricing point of view. Retailers who are monetising media with brands today have an opportunity to explode this revenue over the medium term. Today, brands are craving access to transaction data, the ability to robustly report ROAS and attractive advertising mediums. Retailers who are serious about unlocking the retail media opportunity can facilitate these needs with some active attention and win commercially as a result. I have seen retailers with a mature retail media revenue stream double investment in just a few years.
2. Improved customer experience: By partnering with brands and serving targeted advertising to customers, retailers can use retail media to enhance the experience for their customers. Personalised advertisements can help customers discover new products, learn about promotions, and stay informed about relevant news and trends. This can in turn increase customer satisfaction and loyalty, as well as drive repeat purchases. Whether campaigns are developed in partnership with a single brand or several brands within an event activation, retailers who can successfully marry the communications of brands with their own corporate agenda and messaging can use retail media to carve a real point of difference for themselves in the market.
3. Enhanced brand visibility: Retail media can help retailers increase their brand visibility and awareness. By partnering with brands and serving targeted advertisements to customers, retailers can leverage the reach and influence of those brands to increase their own exposure. This can help retailers expand their customer base and reach new audiences. As retailers double down on leveraging first party data to deliver advertising outside their own estate, rules of engagement should be created to ensure they win as a result of activity i.e., traffic is always directed back to their eCommerce sites. Equally, when working with non-endemic brands across owned assets, rules of engagement should equally ensure traffic is never diverted within an active sales cycle.
4. Data-driven insights: Retail media can provide retailers with valuable data-driven insights about their customers. By analysing advertising performance and customer behaviour, retailers can gain a deeper understanding of their customers' needs and preferences. This can help retailers improve their product offerings, optimise their pricing strategies, and create more effective marketing campaigns. From a media revenue perspective, understand what media and messaging customers engage with can also work to enable more effective yield management across key inventory and increase profitability.
In summary, retail media represents a valuable opportunity for retailers to generate additional revenue, enhance the customer experience, improve brand visibility and gain data-driven insights.
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