The rise of retail media networks has been a hot topic these past couple of years, and for good reason! According to Forrester’s Predictions 2022 report, retail media spend will grow to $50 billion globally in 2022. The growth is partially attributable to an increase in ecommerce spending, with brands devoting ad dollars to connecting with shoppers in the online environments where their buyers are purchasing. One of the benefits of this is an improved ability to connect shopper behavioural data with actual sales, something which is of immense value to the brands that are advertising.
This is not a new trend, but it is one that is currently accelerating. Since Amazon launched its media network in 2012, retailers large and small have followed suit—from big-box giants like Walmart and Target to specialty retailers like Sephora and even app-based delivery services like Instacart. Now, we’re poised for an explosion of growth in this space, as retailers seek to capitalize on growing demand.
But the online space is only one of the arenas worthy of attention for retailers seeking to build up robust retail media networks. In this article, we’ll cover the basics of retail media networks—what they are, how they’re evolving to meet changing consumer and brand partner expectations, and best practices for retailers to consider when creating an RMN strategy—so you can get up to speed quickly and ensure you’re maximizing the potential of your full retail presence to generate additional revenue.
What is a retail media network?
Before we go any further, let’s start with the basics.
Retail media means different things to different people, but here’s a simple definition: retail media is a vehicle to market to your customer at the point of purchase or the point of choice. This isn’t a new concept. Retail media can include everything from product sampling, to in-store displays, to featured placements within the glossy paper catalogs mailed to customer homes. Retail media in the digital world is similar: brands pay to have their products shown at or near the point of sale, which increases the likelihood of a customer actually buying.
A retail media network (RMN) is the delivery and management system for the different retail media opportunities a retailer has to offer. In essence, it’s an advertising platform maintained by a single retail entity and set up across their owned channels and digital properties, both online and in store Retailers use RMNs to manage ad inventory and control the placement of ads at various points throughout the buyer journey. This enables a retail brand to give their partner brands access to customers close to the point of purchase, whether a customer is shopping from their computer or in a brick-and-mortar store. This means, for example, that a brand (like Doritos) can advertise on a retailer’s (such as Walmart’s) website, or can advertise to customers walking around inside a Walmart store.
Shopper marketing for the digital age: The evolution of the modern RMN
The retail media space has undergone rapid evolution in recent years, creating exciting new opportunities for advertisers and retailers alike.
The first retail media networks were mainly focused on increasing shopper engagement and sales, but retailers quickly found new ways to leverage their retail media investments. Now, they have become important tools for securing additional revenue from brands looking to advertise across the retailer’s offerings. RMNs can also incorporate vast amounts of first-party customer data, including shopping habits and buying patterns, all sourced from the retailer’s owned brick and mortar and digital ecosystems.
There are a few key factors that led to retailers leveraging customer data to expand their media networks’ monetization tactics. Most notably, the pandemic accelerated the shift towards online shopping at the same time that technological advancements enabled increasingly sophisticated data collection and highly targeted advertising. With more consumers shopping online, investment in digital media advertising has soared. According to Forbes, brands spent at least $5 billion on retail media in 2020 to influence the customer at the digital point of sale and better measure performance from their investments.
At the same time, we now have the technology and expertise available to make media networks profitable for retailers of all sizes. As a result, retail media networks have been gaining a lot of traction amongst retailers looking to create new revenue streams and benefit from the post-pandemic increase in digital ad spend. After watching the big retail players demonstrate the revenue-generating potential of an RMN, now the smaller and midsize retailers are following suit in creating their own.
Best practices for building a modern retail media network
The recent influx of retail media networks means that advertisers have more options to choose from when deciding where to spend their shopper marketing and brand advertising budgets. Even if many retailers have some sort of media network in place, an out-of-date model isn’t enough to keep pace in today’s rapidly evolving and competitive digital landscape. Now is the time to build a strong retail media network and refine your RMN strategy.
So what distinguishes the modern retail media network from the model of the past? We’ve put together a list of best practices to keep in mind when creating or optimizing your retail media network strategy.
1: Build the value of first-party data for partner brands
As the cookie crumbles, brands believe the modern retail media network can offer strategic change in the commerce experience (both online and offline) by:
- Influencing customers at the “digital shelf” point of consideration
- Offering lower-funnel advertising opportunities to fill the gap left by cookies
- Delivering performance insights to improve their return on media investment
Impending changes to third-party cookie policies are forcing marketers to rethink how they acquire, retain, and engage with customers. Losing the ability to automatically gather third-party data means that customer insights won’t be as readily available and will complicate the creation of hyper-targeted online ad campaigns. But while this upset is causing a seismic shift for marketers, it presents a timely opportunity for retailers, who should expect to see an increase in the value of their first-party data.
Consumer brands and consumer packaged goods (CPG) companies like Nestlé and PepsiCo tend to have less first-party data at their disposal; it’s their retailers and e-commerce partners that typically handle most of the transactions and “own” the customer relationship. With the soon-to-be decreasing value of third-party cookie-related platforms, CPG marketers will be looking to shift their ad dollars elsewhere—and retail media networks (RMNs) are poised to step in.
Through their owned and operated digital platforms, RMNs have access to large amounts of first-party data—gathered over long periods of time and encompassing different customers’ shopping histories related to a number of different products—that can be broken down and analyzed at a granular level. But brands want more than access to retailers’ brand experience and audience data; they also need a measured outcome. That means a successful retail media network requires a long-term strategy that keeps brand partners invested with deep performance insights and addressable advertising opportunities that fit the needs of brands and CPGs.
2: Incorporate in-store digital media to provide omnichannel access to your shoppers & enhance your in-store experience
As omnichannel retail strategies gain traction, the modern RMN leverages digital technologies to reach consumers across channels and devices. It does so by:
- Creating a complete network that seamlessly connects all channels and properties
- Offering partner brands access to customers near the point of sale, whether that’s in-person or online
- Incorporating digital in-store media to deliver contextual messaging and dynamic content
Any marketer worth their salt knows that an omnichannel approach is the best way to achieve results in today’s marketplace. Whether a customer is shopping from their computer or mobile device, by telephone, or in a bricks-and-mortar store, the shopping experience across all channels should be seamless, from product discovery to final purchase. And that’s where digital in-store media comes in.
WATCH: How to influence add-to-cart moments with an in-store digital media channel
According to Inmar survey data, 24% of marketers want retail media networks to add digital in-store media (or digital out-of-home/DOOH) to their solutions, and roughly the same percentage would like to see RMNs incorporate additional in-store signage and media options. In-store signage differs from other ad formats in its ability to deliver brand messaging and storytelling in context, when the customer is already in a buying mindset. At the same time, digital in-store signage opens up new storytelling possibilities through the use of dynamic content, offering brands unique opportunities to engage with customers and leave a lasting impression. It’s a type of media, in other words, that not only operates as a way to generate additional revenue from brands, but also as a method of delivering a more information-rich and relevant in-store experience.
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Marketing teams understand that contextual in-store ads can be combined with other retailer-centric activity—like in-store promotions or advertising in apps or out of home—and work in concert with online ads deployed across online channels. Moving forward, the most successful retail media networks will be those that can offer brand partners a range of ad mediums and channels—including in-store signage and other digital out-of-home advertising opportunities. After all, even in 2025, it’s expected that about 76% of goods will continue to be purchased in stores.
3: Optimize on-site retail media strategies
Retail sites are a major pre-shop touchpoint for online buyers and are where a lot of consumers conduct product research; almost 7 out of 10 online shoppers actually bypass search engines and go directly to a retail site when they want to purchase a product. This means that retail websites are a valuable part of the product purchase journey, especially for brands looking for new ways to stand out on the digital shelf. Any retailer thinking of building their own retail media network should start with by looking at their on-site retail media offering.
To maximize spend from brands, retailers need to help them address the entire shopper journey—from brand awareness to product purchase. This requires retailers to offer a wide array of ad formats on-site, ranging from retail display ads, which are ideal for upper funnel strategies geared towards awareness and consideration, to sponsored product ads, which are great for lower-funnel strategies like driving conversion. Display formats that are custom built for retail are another useful addition, as they enable advertisers to incorporate retail-specific elements, personalization, and a more seamless experience.
Done right, on-site retail media brings a lucrative new revenue stream to retailers without compromising or disrupting the shopper journey.
Some of the key points to address when optimizing your on-site offering:
- Offering partner brands a wide array of on-site ad formats that address the entire shopper journey
- Incorporating dynamic display formats that enable brands to personalize each ad to the store and the page the shopper is browsing on
- Providing on-site retail media offerings that blend seamlessly into the shopping experience
- Ensuring you have adequate capability to capture user information and provide it to buyers looking to do granular targeting & produce detailed campaign performance reports.
4. Think outside owned channels to maximize reach
While many retail media networks prioritize on-site monetization, today’s retail media networks also need to build site traffic by:
- Using off-site advertising to expand your reach and generate demand
- Optimizing on-site tactics by improving the user experience and incorporating personalization
- Connecting off-site advertising to on-site advertising to drive a bigger audience
There’s nothing wrong with starting your RMN strategy with on-site tactics. But unless you’re Amazon, you need to look beyond your own backyard and think outside owned channels if you want your retail media network to be a success. A recent Forrester report found that even the retailers best poised to launch their own retail media networks only have 50 million monthly site visitors on average. That’s a decent amount of site traffic, but it’s a far cry from Amazon’s almost 200 million average monthly users.
For the vast majority of retailers, owned properties won’t be enough; today’s retail media networks need to build their site traffic in order to succeed. One of the easiest and most effective ways for retailers to reach customers and prospects at scale is with off-site advertising that connects to their on-site advertising. Off-site advertising expands your reach by providing you with more customers and visitors to monetize and off-site programmatic helps drive new and more site traffic to your website.
It takes effort to build a solution that connects the reach and efficiency of off-site ads to the on-site experience—but it’s well worth your while and will pay off in the long term. When done right, on-site advertising and off-site advertising complement one another to create exponential monetization growth. In short: a successful RMN strategy requires a network that includes both on-site and off-site tactics.
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