Retail media is expected to grow further as we reach 2023, as more retailers capitalize on expanding customer data and focus on new revenue streams.
This article will highlight five key trends that will accelerate retail media growth in 2023 and beyond.
1. The Rise in Omnichannel Advertising
Having an omnichannel strategy entails more than just having a physical brick-and-mortar store and an eCommerce website. It integrates real and digital experiences and reaches consumers wherever they may be. Consistency is key across all channels to improve the customer experience, for example, allowing consumers to interact with retailers in person, through the internet, or through social media sites in an end-to-end personalized journey. Retailers risk losing customers to competitors if they have not yet optimized their omnichannel strategy.
With so many ways for customers to buy now, omnichannel advertising is becoming a growing trend in the retail industry, allowing businesses to provide customers with a consistent shopping experience across several channels and devices. As more people start making purchases through social media, it’s evident that businesses must be willing and able to provide consumers with more freedom in their choices if they want to successfully overcome the divide between online purchasing and in-person retail. This will be useful in assisting these brands in creating consistency across all channels, thereby assisting them in increasing brand awareness and loyalty, and ultimately enabling them to successfully generate income from numerous channels.
2. Retailers Are Launching Retail Media Networks
Cookie deprecation and the rise in first-party data are increasing the value of retailers’ media assets such as on-site and in-store. Retailers benefit from first-party sales and transactional data, which gives them a competitive advantage by creating highly targeted and personalized communications based on genuine buying habits, rather than just demographic, interest, or intent.
Retail media networks (RMNs) have existed for many years, but many retailers are only now starting their own retail media networks or increasing the sophistication of their operations. For example, Tesco launched their RMN, Tesco Media, and Insight in the UK in 2021, allowing brands and agencies to reach Tesco’s enormous digital audience using data obtained from their loyalty scheme Clubcard. Tesco’s closed-loop platform provides sponsored product marketing, a connected retail experience for brands, and media measurement.
3. In-Store Digital Advertising Investments
Shoppers are set to return to retail outlets in greater numbers this holiday season, with 63% of US consumers intending to shop in person, up from 58% last year. In addition to monetizing their digital store data, retailers are installing in-store digital displays in key locations to connect and communicate with customers. These interactive signs can be extremely effective at boosting conversion rates while also adding a layer of complexity to the overall attribution of media spending.
In-store digital displays enable retailers to capture a shopper’s intention at the point of purchase and as a result, have a significant impact on sales. According to research, digital signage improves consumer satisfaction by 46% and purchase rates by 30% in retail businesses. As customer interest grows, such displays provide a better return on investment.
4. Strategic Partnerships
In some instances, retailers do not have the resources, expertise, tools, or data required to monitor, manage, and analyze siloed customer data in order to create value for their brand partners. ADvendio assists retailers in optimizing their retail media businesses, such as Cartology, by supporting them from inventory and order management processes through to campaign automation. AI is frequently used by these technology platforms to help understand customer needs, provide valuable insights on advertising budgets and marketing, and ensure that consumers are connected with the right products at the right time through personalization.
Retailers who have improved their retail media networks through strategic partnerships include Dollar General in the US, which unveiled an upgraded version of their Dollar General Media Network (DGMN) in June 2022, as a result of a collaboration with multiple organizations, including The Trade Desk, Google Ad Manager and ad agency Goodway Group. Many additional retailers are likely to introduce or extend their media offerings before the end of the year.
The strength of the consumer relationship determines the value of a retail media business. Retailers with vast customer databases and established relationships can provide personalized advertisements that provide a targeted and streamlined customer experience while generating high returns for advertisers. Personalization in discounts and rewards has become a consumer expectation. Using retail media to provide real-time personalization across promotions and recommendations is likely to boost sales.
Retail advertisers can also use media programs to adapt their messaging in order to boost sales, improve ROI, and deliver a more pleasant shopping experience. By tailoring offers based on consumer categories, businesses can achieve this. This makes it simple for businesses to interact with new customers or introduce existing customers to new products.
In 2023, retail media’s significance and popularity will increase further, and it is soon expected to become a mainstream revenue channel for retailers. Retailers must take steps to ensure that retail media networks do not detract from the brand or the customer experience. To do this retailers must find the right balance of ad frequency, targeting, and data protection which will be vital to their future success. They should also stay current on industry trends and continue to evolve their retail media networks to avoid falling behind the competition.