In our previous blog, we discussed what trends are emerging due to new digital avenues of Retail Media and its expansion in the UK market. With the lack of standardization in these newer forms of Retail Media, and some methods of data collection disappearing such as the removal of third-party cookies, businesses are trying to navigate these challenges in an incredibly competitive environment. In this section of our Retail Media content series, we’ll cover some of the current challenges and the solutions needed to overcome them.
A Fragmented Retail Media Landscape Creates More Reliance on Retail Media Networks
With a multitude of businesses inserting themselves into a retail media landscape full of new digital avenues, it becomes harder to navigate in that environment what the most effective strategy will be for their brand is. This creates heavy reliance on Retail Media Networks to guide these businesses in the right direction so that they are seeing the best ROI for their business. Otherwise, advertisers will be reluctant to further invest if they are unsure how their spend is making an impact in the digital market. Businesses need a clear direction on the different avenues that work most effectively for them. So, what’s the solution to overcoming a fragmented market?
Businesses and networks will need to work closely together to better understand how to optimise their performance and measure the data collected in a standardized way. Another solution that some businesses have adopted, is to create their own retail networks, turning their websites into more profitable marketplaces. We’ve seen some very well-known businesses adopt this strategy so that they have more control over how their media is being spent and displayed to customers, creating less of a reliance on third part networks while earning additional revenue in the process.
Ad Fraud Skews Marketing Metric Performance but Learning to Avoid the Red Flags Improves Accuracy
With Retail Media investment on the rise, businesses need to be aware of concerns surrounding fraudulent advertising spaces and marketplaces. In a recent report conducted by Juniper Research, ad fraud cost businesses approximately 35 billion dollars in 2018, and that number has risen to double in 2023. Fraudulent ads are operated by scammers who persuade businesses into purchasing ad space and falsifying ad metrics, including impressions, clicks and more, for their own financial gain. If Retail Media is being sold through illegitimate websites that have fake views, clicks and impressions, this could mean that advertisers find themselves in a situation of false data, skewing their ad performance and ROI on ad spend. So, how can we tackle the ever-increasing case of ad fraud in the Retail Media landscape?
Ultimately, retail networks need to instil confidence and trust and offer guidance on how to avoid fraud. For networks offering advertising space, being transparent at every opportunity builds ongoing trust. There are also some helpful resources to find out what sites or networks have been blacklisted, while also allowing businesses to blacklist themselves and end their campaigns. Ad Vendor Services are also extremely helpful in these investigations, and Retail Media Networks may share these resources with their clients to better educate them for future interactions.
Retail Media Strategies Focusing on Customer Experience are Creating a Competitive Edge
Another challenge that presents itself in the years ahead is the need for businesses to focus on consistently bringing a positive experience for their customers in all realms of the journey, from the first notice of an advertisement to a post-transactional experience. Why is this important? Because Industry data shows that over 50% of a company’s sales come from returning customers. It is also cheaper to retain customers, rather than acquiring new customers. As the Retail Media landscape becomes more saturated, consumers become turned off and generally more concerned about their data privacy. So, how can Retail Media Networks adopt this into their marketplace strategy, to stay ahead of their competitors, and earn the trust of their consumers?
First, advertise a rewards program in your Retail Media network with a competitive advantage. Curious to know the three leading features that are seen as valuable in rewards programs? Statistics show that discounts, free shipping, and freebies top the cake. These rewards provide opportunities to keep your retail media placements fresh and exciting, and with the ideal situation of having these features, businesses can utilize various forms of marketing as well, as mentioned in our previous blog.
Secondly, Retail Media Networks should consider the advantages of Non-Endemic Retail Media and work with businesses to provide these placements on their networks. Not only does this provide equal opportunity for newer businesses to advertise on a more established space, but it also opens the doors for additional revenue opportunities. Through adapting this approach, it shows their consumers that perhaps they may be interested in specific products and therefore, an additional offering from another brand they didn’t think or know of. Ultimately, through understanding their consumer demographics, they can better curate a shopping experience for their audience’s purchasing mindset and cater to their needs.
Lastly, Retail Media networks should focus on staying transparent with their customers. By following policies and regulations and actively displaying to customers how their data is being used, allows them to feel a sense of reassurance and in turn, builds a more trusting relationship and promising future of customer loyalty.
Conclusion
As we wrap up this section on the challenges and solutions in retail media, it’s clear that businesses face a complex and ever-evolving landscape. Fragmentation, the rise in ad fraud, and the need to maintain customer experience and loyalty demand innovative strategies and close collaboration. By adopting intelligent technologies, creating their own networks, and focusing on transparency and customer rewards, businesses can navigate these challenges effectively. Staying informed and adaptable will be key to thriving in this dynamic environment, ensuring a robust return on investment and sustained customer trust in the years ahead. Want to learn more about some of the businesses leading by example? Stay tuned for our next blog, where we’ll cover some of the market’s top innovators and what they’ve adapted in their strategies.
Sources
- Fragmentation: The big challenge for retail media in 2024 (econsultancy.com)
- How Retail Media Is Reshaping Retail | BCG
- Insights into the evolving landscapes of retail fraud – Retail Insight Network (retail-insight-network.com)
- Insights into the evolving landscapes of retail fraud – Retail Insight Network (retail-insight-network.com)
- The algorithms powering loyalty: How an AI firm is helping Tesco gamify Clubcard (econsultancy.com)
- Retail Media: The Dynamic Landscape in the UK | by Aysu Altuntaş | GoWit | Medium
- BOPIS (Buy Online Pickup In Store) — Brightpearl
- IAB-MRC-Retail-Media-Measurement-Guidelines_For-Public-Comment-1.pdf
- Online shopping behavior in the United Kingdom (UK) – statistics & facts | Statista
- What is Endemic vs Non-Endemic Retail Media Advertising? – Digilant
- What Is Omnichannel Retail? How it Works and Examples (2024) – Shopify