As defined in our previous blog, “The Evolution of Retail Media”, Retail media can be any kind of promotional marketing material, placed strategically to target a consumer in a retail environment. Undoubtedly, we’ve seen Retail Media evolve over the years and become much more prevalent in today’s digital realm. With this development, companies have increased their spending on Retail Media, intending to increase their reach and double down on the ability to collect first-party consumer data. In fact, Insider Intelligence from eMarketer is predicting that we will see spend in Retail Media surpassing £4 billion in the UK in 2024, compared to last year, at £3.26 billion. In this next part of our Retail Media content series, we will break down some of the most notable Retail Media trends happening digitally, starting off with Data-driven Marketing.
Data Driven Marketing Lies at the Forefront of Retail Media Trends
Many of the new avenues we are seeing business take with their Retail Media strategies is all thanks to the power of having access to first-part consumer data. This access has enabled businesses to double down on more precise targeting that in turn, will create a bigger return on investment for their business. Data driven marketing provides additional benefits, including:
- Opens the door for personalized marketing experiences and journeys.
- Improves the overall customer experience, as ads are better targeted to their needs and their behaviours on channels.
- Creates a higher return on investment for businesses as targeted ads see a higher success rate and increased sales.
Retail Media Has Become More Integrated with Ecommerce than Ever Before
As mentioned previously, it’s obvious that E-Commerce is growing at a rapid pace Looking at how this trend has developed in recent years now, Retail Media Networks provide the opportunity for larger profits and revenue to companies who continue to build upon a larger strategy in the e-commerce space.
It is prevalent that commerce and ecommerce are no longer separate priorities but rather, have now shown to be equally as important in utilizing retail media networks for marketing. Why? Simply because this creates a more consistent and positive shopping experience, when customers are interacting with their preferred brands. This also helps to expose consumers to more traditional forms of retail media and keep foot traffic for physical store locations. For example, a sale event advertisement for an in-store purchase could exist on a retailer’s website, prompting the customer to visit the store and take advantage of a discounted price. From this experience, the customer may come across other in-store retail, prompting them to make a further purchase. In-fact, data shows that up to 79% of consumers are making additional store purchases when they pick up their online order, to are exposed to digital retail media ads. This is a great model to adapt for businesses looking to increase their revenue.
An Omnichannel Strategy Wins Over Consumers with a More Convenient Path to Purchase
There is no doubt that adapting an Omnichannel Retail Media strategy creates more touchpoints in a consumer’s purchasing journey. Without adapting this strategy, businesses can easily miss the opportunity to create a more personalized shopping experience using first-party consumer data.
Not only this, but Omnichannel creates a more unified experience for consumers, which is the way in winning over their purchases. In fact, 70% of customers spend more on brands who have adapted an omnichannel strategy for their retail media. Convenience also has a part to play in this approach, especially with younger generations– who value the convenience of shopping for their favourite products and brands everywhere that they are connected. This in turn – can improve a business’s customer experience and loyalty, which retains customers and increases business revenue.
Mobile Commerce and social media are the primary drivers for making this shopping experience more convenient. Not to mention that, the number of social media users is projected reach six billion people by the year 2027.
Many of these social media platforms offer their own marketing and paid advertising services, helping businesses to better target their ideal consumers, and suggesting ways or are providing their own strategies to help businesses get the best return on their ad spend. Examples of this are Google ads, Meta Business Manager, or LinkedIn Advertising.
Mobile commerce proves to be one of the most ideal environments for businesses to squeeze their ads in. While signing up for these platforms, consumers are asked to fill in their information, which is streamlined to advertisers to help them better target ads.
The other part is the fact that, social media platforms are recording user’s habits which affects what show up on their feed, thanks to powerful emerging technologies and the integration of AI. This usage of data driven results is extremely tactical, as social media proves to be a platform that not only businesses can cater their advertisements to effectively but allow consumers to easily click-through to sites to make a purchase, which businesses can track through analysing the success of clickthrough rates and more.
Non-Endemic Retail Media Strategies Are Being Adapted to Provide Better Brand Visibility and Sales Opportunities
Endemic Retail Media has been widely practiced in the retail landscape and is an effective way for businesses to advertise their products. It has worked well for businesses to use ad space on retailers’ websites where their products are being sold, as these ads are operating in a native space where the consumer is actively shopping for the products. The other benefit of these ads being bought and sold on Retail Media sites, is the ability for businesses to buy better ad space, such as a featured banner on the respected retailers home page, giving greater visibility and purchasing probability. This leads to a quite simple and convenient path to purchase for consumers, as well as an effective and reliable secondary revenue stream for retailers.
Contrary to Endemic Retail Media, we are starting to see more businesses use Non-Endemic Retail Media in their advertising strategies. Non-Endemic Retail Media refers to retail sites selling ad space to products that are not native to their website retail offerings. This strategy opens a larger potential consumer audience base to products not native to their site, while earning an additional revenue stream in the process. According to digital marketing agency, Digilant, one of the most effective ways of making this work, is through finding overlaps in target audience base. How? By collecting third-party data, and using that as a selling point for businesses who want to opt-in. This may be a less familiar avenue to take in the retail media space, but nonetheless, is something that more businesses are starting to adapt due to its revenue potential.
A notable example of Non-Endemic Retail media that proves to be incredibly effective, is post-transactional ads. Why are they so effective? Because they help to incentivize customers to make a second purchase, while providing a valuable additional revenue stream without interrupting the sales funnel. This ultimately proves to be an effective way for businesses to increase their value per sale and provide ad space for other brands not native to their markeplace who want their ads to be exposed to a new pool of potential customers when purchasing is at top of mind. This moment in a customer purchasing journey also gives businesses the opportunity to reward consumers with a discount voucher or cashback, contributing to the possibility of a more loyal, returning customer.
At Webloyalty, this has proven to be a successful tactic we have adapted with some of our leading partners and the promotion of our Complete Savings program on non-native partner sites, through signing up for a cashback subscription. It offers consumers the chance to take advantage of a cashback on purchases through a wide variety of retailers, while providing partners with an additional source of revenue by utilizing their website for post-transactional retail media placements. Helping to find solutions for businesses is always a top priority for us at Webloyalty. If you want to learn more about how we have provided secondary revenue for our partners, check out our solutions on the case study page of our website.
New Retail Media Trends Create a Higher Demand for Better Standards
With these new forms of digital Retail Media, comes the need for better management of the data collected, and a more standardized process for businesses to measure their success, and to ensure that the information is transparent. With Google’s plans to remove third-party cookies for the latter half of 2024 because of the Privacy Sandbox initiative, even more businesses will look to Retail Media networks as their main source for gathering, managing, and targeting first-party consumer data. In 2023, the ‘Retail Media Measurement Guidelines’ was created, as an attempt to ensure practices are compliant with the Retail Media Council and Interactive Advertising Bureau. When it comes to data, this guide is also an attempt to ensure that consumer data and privacy is protected and adheres to the GDPR (General Data Protection Regulation). One of the ways businesses need to abide to this regulation, is by including controlling access and ensuring that encryption measures are in place.
In summary, retail media has evolved to offer new opportunities for reaching consumers directly at the point of purchase. It is crucial for businesses to consider the trends mentioned in this blog and ultimately, how retail is evolving if they want to stay ahead of their competitors for 2024 and the years to come. We’ve noted that a variety of new platforms provide powerful tracking and analytics data which is allowing businesses to explore new avenues of retail such as Non-Endemic Retail Media and streamline a better path to purchase and consumer experience. This Non-Endemic Strategy is worth paying attention to, as it provides marketplaces with better profitability and opportunities for smaller businesses who want greater exposure to their brands as they fight an ongoing competitive landscape from larger corporations who are dominating the e-commerce ad space. Although this is providing new opportunity in retail, it also demands for better standardization that businesses can follow. As we have established the biggest trends in the landscape, we’re also seeing a rise in challenges that have resulted from some of these advancements, which equally businesses need to identify and overcome. Stay tuned for our next blog as we dive into these challenges in the next part of our retail media series.
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