Developing A Retail Media Value Proposition: A Q&A with Our Retail Media Committee Experts

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:

• Diana Abebrese, Global Retail Media Lead, EPAM Systems
• Martin Svarc, IAB Slovakia Representative and CCO, Crxuo
• Larisa Dumitru Head of eCommerce EMEA, GroupM Nexus
• Babs Kehinde, Senior Director, Commerce Media EMEA, PubMatic 

Q1. What are the top two considerations for retailers thinking about building a Retail Media proposition?

Diana:

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.

Martin: 

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.

Larisa:

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.

Babs:

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?

Diana:

There are many! 

• It’s very easy to jump on the next shiny product bandwagon, but how do you ensure it is future-proofed?  Can it adapt to the potential needs of tomorrow - standardisation, growing market demands,  new buy types/ KPIs, new DSPs? Due diligence around this is something that often gets overlooked, rendering a part of the proposition redundant very quickly.
• More inventory/new products does not always mean more revenue. It can sometimes mean better (more profitable/ higher performing) revenue, replacing existing investment into other products. Manage expectations internally when building business cases and invest time in training and GTM around media planning and optimisation automation.
• When building a proposition, retailers will generally have to integrate with some 3rd party platforms. Be aware of buying into solutions, where you are told that it's a simple integration - “we just need to add a simple tag on the site.” It is rarely that simple - and you will have to jump through multiple hoops internally - business case, testing, securing dev time - before this can even be considered.

Martin: 

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.

Larisa:

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.

Babs:

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: 

• Speak the language of value: Link the proposition to the company goals, focusing on incremental revenue and customer engagement outcomes. 
• Show don’t just tell: Use real data to illustrate the benefits of Retail Media for the business. 
• Address scepticism head-on: Answer any doubts and concerns with clear evidence. Be transparent and honest. 
• Map out the road ahead: Explain the steps, resources, and timeline needed to make the proposition a reality. 
• Get champions on board: Get support from key stakeholders who can influence and overcome resistance. 

Q3. Can you share two top best practices for retailers?

Diana:

1. Conduct a proposition audit every six months to assess how it is delivering against your business strategy. Build a framework that highlights gaps in the current portfolio, reviews competitor propositions, reviews the performance of each placement - STR, pricing, ease of implementation, ROAS, impact on site yield, and considers qualitative feedback - internal and customer. 
2. Stay connected with the industry as it is so fast-moving. Keep talking to vendors and partners. Score and group innovation ideas into buckets such as - Do Now; Never; Yes but Not Yet; and Needs more Consideration. Continue to review quarterly.

Martin: 

1. Adopt a step-by-step approach: Rather than spending extensive time on forming a comprehensive strategy, retailers should take an iterative approach. Consider utilising an existing technology or platform to build a first proof of concept. Deliver tangible results, evaluate performance, and learn from the outcomes. This incremental approach allows for adjustments and optimisations along the way, leading to a more effective and efficient Retail Media proposition.
2. Simplify and expand the offering: Leverage existing platforms that simplify the complex process of vendor marketing. Streamline the management of vendors and extend the offering to both endemic and non-endemic vendors. By combining trade marketing and branding budgets, retailers can create an attractive proposition for brands and their agencies. Retail Media uniquely captures the complex customer journey from first impression to repeated conversion, providing a comprehensive channel for brands to engage with their customers.

Larisa:

1. There is so much noise at the moment in the industry and so much fragmentation, so make it easy for your external stakeholders to understand your Retail Media proposition – everything from the pricing model to the placements and creative opportunities. 
2. Showcase the incremental value that your Retail Media offering is bringing to the table – offering a ROAS metric based on last-click attribution doesn’t cut through the noise anymore. Brands need to know that the money invested in Retail Media will bring in incremental sales and new to brand audiences and they want to be able to properly track and measure those results.

Babs:

1. Prioritise the customer journey - Use Retail Media to enhance the customer experience at every stage, from raising awareness to establishing loyalty. By leveraging customer data, retailers can deliver relevant and personalised ads that match the customer’s needs. Measuring the impact of your Retail Media campaigns on customer metrics, such as satisfaction and lifetime value can help gauge their effectiveness 
2. Innovate and differentiate - Use your unique assets, such as your own products, services, content, and channels, to create distinctive and compelling Retail Media solutions. Experiment with new formats, on-site and off-site technologies, and partnerships, to offer more value and variety to your advertisers. Create a Retail Media proposition that reflects your brand identity and values, and that resonates with your customers and advertisers.