RX's very own Rebecca Brook (Senior Business Consultant) and Kate Bolland (Marketing Executive) recently attended the Marketing Association’s Brainy Breakfast on the retail media revolution. This piece covers their analysis of the revolution and what that means for brands.
Retail Media Networks were one of the global marketing buzzwords in 2022. It seemed everyone was talking about how they had either launched one or were utilising Retail Media Networks to get closer to customers at the point of purchase.
Earlier this month, we had the pleasure of heading along to the Marketing Association’s Brainy Breakfast on the retail media revolution and what it means for brands.
It was an early start, however the sunrise in the Viaduct made it worthwhile!
The morning was both thought-provoking and energising due to the brilliant line up of speakers including: Tom Langley Head of Personalisation & Retail Media John Lewis Partnership in the UK, Alex Lawson Product Owner Market Media, Samantha Osbourne GM Cartology and David Brem Head of Foodstuffs Precision Media.
A big thank you to the Marketing Association, we came away with some clear learnings and considerations for brands wanting to include Retail Media in their communications mix.
What is Retail Media?
We will start with a definition as there can be some confusion. Retail Media is an evolving advertising platform that reaches customers with trusted, relevant messaging across the customer journey, underpinned by first party customer insight.
In Retail Media Networks, advertisements can be displayed on their website, app, in-store or on other digital platforms.
The marketing and advertising industry is fast-paced and with technology rapidly evolving and pandemic enforced restrictions, people are increasingly purchasing online. Retail Media Networks provide the ability to engage with customers through their whole journey from sofa to store in the moments that matter most.
Historically, Google and Meta have dominated the digital media space, however with the transition to a cookie-less society, retailers are making use of the gold that is first-party customer data. Many big retailers have come to the party and experienced strong growth including Amazon Advertising, Walmart Connect and Roundel from Target.
The unique value proposition of Retail Media Networks is the first-party insights that are fuelled via behavioural shopper data. This gives advertisers a high-quality understanding of audiences and their purchase behaviour. Additionally, with Retail Media Networks, brands can receive a clear picture of how their ads perform as all behaviour is tracked within the Retail Media Network’s platform.
Retail Media can help brands advertise in places where consumers are spending their time and is a great way for brands to increase their visibility to shoppers.
How has it evolved to date? How is it expected to continue to evolve?
Retail Media Networks have evolved from trade marketing to a way of advertising to customers however and wherever they shop. Retail Media growth is skyrocketing.
- Globally, retail media accounts for 11% of Total ad spend, however in the US alone Retail Media is expected to grow by 60% by 2027.
- Amazon's ad business will top $30 billion this year (Henry Kim, Swiftly)
- In 2020, US retail media ad spending was $20.52 billion and is predicted to reach 52.21 billion in 2023.
Whilst the name ‘Retail Media’ is relatively new in NZ, the broad concept has been around for some time. Historically brands would set aside a small % of the budget for ‘Trade Marketing’ which typically felt more like a box ticking exercise and a ‘have to do’ rather than a strategic way to reach a highly targeted audience.
Nowadays it’s a media channel in its own right and its benefits for the supplier brand extend higher up in the marketing funnel to awareness, consideration and brand salience.
Competition is on the rise as more people want a slice of the retail media pie including legacy retailers, media and content players as well as disruptive global platforms. First-party data is essentially the holy grail of advertising so it will be an exciting one to watch.
What can we take from an (established) market like the UK
In the UK, retail media is forecast to be the fastest growing area of UK commercial media this year – with a forecasted 25% growth in 2023 according to GroupM analysis.
Tom Langley, Head of Personalisation & Retail Media at John Lewis Partnership reaffirmed the great success Retail Media Networks are having in the UK, particularly around targeting capability that comes with owning first party data. John Lewis has 12 million customers yearly so that is a lot of eyes that could be on your advertising. John Lewis Partnerships have found that the key is to ensure that you are focusing on creating engaging customer experiences e.g, retail media advertising on your website needs to have the same look and feel as your businesses content.
Key players in New Zealand
New Zealand brands now have options of partnering with local retailers that have launched their own retail media platforms. These include MarketMedia, Foodstuffs Precision Media and Countdown’s Cartology.
Cartology from Woolworths NZ (formerly Progressive Enterprises)
First to market in NZ and leveraging the Woolworths AU learnings. They are able to leverage their database of 1.8m One Card customers and promote products on Countdowns online shopping platform and in-store screen network.
Foodstuffs Precision Media
The newest entrant to Retail Media in NZ, Precision media is fuelled by globally proven Dunhumby data science and measurement. Through the 2m customer relationships and 200m+ transactions that occur each year across New World and Pak’n Save banners, Foodstuffs Precision Media is able to provide a variety of media options to brands. These range from in-store media, e-commerce platforms, through to 1st party social and brand advertorial in NZ online mailers.
Launched to market in 2022 in partnership with Omnicom. They can reach people across the Warehouse Group’s online stores, apps and millions of weekly visits to The Warehouse, The Warehouse Stationery, TheMarket, Noel Leeming and Torpedo 7. This provides brands with a holistic customer view, measurable results, closed loop targeting and performance insights that can be linked to transactions.
Considerations for including Retail Media as part of your marketing plan
As brands continue to strive to deliver a consistent omnichannel experience along the way, retail media should be given strong consideration within your marketing communications plan.
The beauty of Retail Media Networks is the WIN, WIN, WIN for retailers, brands and consumers. It's important that the retailer and supplier brand objectives align to create a seamless experience for customers.
Ideally you want closed loop tracking which is the gold standard in this space and transparency means as a brand owner you can make informed decisions. Preferably your retail media partner will provide live dashboards and see campaigns in real time. We think Retail Media Networks are brilliant, and definitely one to consider.
3 tips to keep in mind when planning your retail media campaign
To maximise effectiveness in this space, aim for 3 retail touchpoints
Omnichannel wins, use a combination of online and in-store touchpoints
Make sure to clarify your ROI expectations with your Retail Media Network partner
It’s exciting to see so much growth in Retail Media Networks, they are proving to be extremely effective at reaching customers so close to the point of purchase.
It is important to learn from established markets – such as the US and UK. Instead of competing with other retailers, put energy into growing the industry and creating industry standards.
Retail media propositions need to be a win for the retailer, brands and customers to work. Think about how brands can re-use their content to work for the retailers and have open and honest discussions to make it work for all parties while helping customers to live better every day. We will certainly be keeping an eye on this space.