Retail Media is transforming the digital advertising ecosystem. At the same time, it is transforming many retail businesses and how consumers shop with them. Whilst some retailers have developed sophisticated media networks, some are new on their journey. To understand what it takes to develop a Retail Media value proposition, we sat down with experts from our Retail Media Committee to gain their insight and recommendations.
A big thank you to the following contributors for sharing their thoughts:
Q1. What are the top two considerations for retailers thinking about building a Retail Media proposition?
Start by understanding your customer journey and building a unique proposition to deliver relevant touch points across the journey. Often this will differ by product category, channels, audience segment, store formats, and seasonality. The proposition should improve not detract from the overall customer journey with customer experience always front of mind. Pricing strategy should reflect the role in the customer journey but also consider market rates; demand v supply; category and product profitability and cost of sale.
Secondly, make it easy for your internal teams and advertisers to plan, buy, and measure an end-to-end Retail Media campaign across each touchpoint - this is likely to be a different solution for each retailer, and their target markets (brand advertiser v agency v long-tail supplier v a JBP (Joint Business Plan) supplier with a media commitment aligned to their trading activity). The key is to create a streamlined user journey and enable a single view of the campaign activity through APIs and custom integrations where necessary.
When retailers build a Retail Media proposition, they should prioritise two key considerations. First, they need to assess their audience and data assets, leveraging valuable first-party data and understanding the size, demographics, and interests of their audience. Second, retailers must develop a solid monetisation strategy, exploring different pricing models and ensuring a seamless integration that enhances the customer experience. Additionally, they should consider factors like technology infrastructure, partnerships with brands and agencies, competition analysis, and compliance with privacy regulations. A comprehensive approach to these considerations will help retailers build a successful and profitable Retail Media proposition.
First, have clarity on the go-to-market model: are you building your own Retail Media proposition in-house? Are you working with a third-party? Are you selling through a retailer media network such as Criteo? Will it all be self-service? Will you also offer managed service? We see many retailers working with a plethora of partners, which creates a lot of confusion for brands and agencies. I’m all for testing and learning, but I do believe retailers need to be very clear on the partner ecosystem.
Secondly, make it easy for advertisers to buy into your Retail Media offering – be clear on the unique selling points, on the pricing, on the ways of working.
When retailers consider building their own Retail Media proposition, they should firstly initiate internal alignment to clearly define the value they offer to advertisers. This involves fostering collaboration across teams and business units to efficiently develop a viable solution. Additionally, retailers should prioritise effective use of customer data by investing in data technology solutions for storage, management, analysis, and activation of audience segments. Without a robust data infrastructure, competing in the realm of data-driven advertising becomes challenging.
Furthermore, Retail Media thrives on collaboration. Retailers should engage in strong partnerships with brands and agencies, ensuring their proposition is attractive and accessible. Retailers need to understand their new partners' needs and goals and provide the best tools and solutions to align with strategic objectives. Lastly, retailers should be open to working with third-party technology providers to aid them in their Retail Media endeavours. The development of these retailer-technology partnerships is vital to the growth as well, as it makes it easier for smaller, vertical-specific retailers to enter the market and compete on a level playing field with the larger players.
Q2. What challenges should they be aware of?
There are many!
Retailers can build the case internally for a Retail Media proposition by highlighting the benefits of collaborating with trusted partners who have experience in this domain. They can emphasise that partnering with established experts avoids reinventing the wheel and accelerates the process of launching a successful media proposition. By showcasing the potential revenue streams, enhanced customer experiences, and the opportunity to strengthen brand partnerships, retailers can make a compelling case for internal stakeholders, demonstrating that leveraging trusted partners is a strategic and efficient approach to building a thriving Retail Media proposition.
In Europe, the Retail Media market is expected to be valued at 25 billion EUR by 2027 – that number in itself is a good starting point when trying to convince internal stakeholders to launch a Retail Media proposition. For retailers, I believe it’s less a case of why and more a matter of how and when. Bringing everyone to the table and ensuring that all interests are equally represented (trade & shopper, marketing, content, sales, etc) will be key in ensuring a holistic Retail Media proposition and it’ll make it easier for agencies and brands to buy into it.
When persuading their internal teams, Retailers must remember they’re not just selling an idea but are telling a compelling story that aligns with the team’s goals and values and the significant growth opportunity for their organisations. A few things to bear in mind are:
Q3. Can you share two top best practices for retailers?