Separating fact from fiction in the always-evolving landscape of retail media networks.
Retail media networks are rapidly growing in popularity as a key way for retailers to monetize their online presence. Last year the total retail media ad spend surpassed $40 billion dollars and is expected to exceed $60 billion by 2024. By now, nearly every CPG brand has made space in their budget for retail media, and grocers are firming up their strategies to get their piece of the pie.
But many relationships between CPGs and major chains aren’t amicable, and both sides have plenty of gripes about the current landscape. This frustration has the capacity to bring exciting new opportunities to independents to create programs that can simultaneously benefit retailers and brands, all while bringing crucial savings to their customers. At the recent National Grocers Association Show, Webstop CEO Shawn Tuckett sat down with MorningNewsBeat’s Kevin Coupe to discuss the biggest trends in the industry, including the ways that retailers can get the most out of retail media networks.
Keep It Simple
When any new technology is introduced, it’s natural to want to explore its full potential and see what it’s capable of. However, it’s important to remember that quantity doesn’t always equal effectiveness. As more and more retail media networks are introduced, there is an increasing likelihood for their offerings to overwhelm the digital shopper if not structured appropriately.
Ensuing chaos comes as a result of retailers trying to maximize their opportunities for profits at the expense of the shopper. “I think the one thing that retailers have to be careful of…is to make sure that it doesn’t become too much clutter,” said Coupe, “if the customer feels that they’re constantly being sold something, then it could have the opposite effect.”
Dollars That Make Sense
It’s true that brands are diversifying their ad spend, with more than half of all marketers advertising on five or more retail media networks. But despite continuous investment in the space, retailers have to be careful not to narrowly think of their networks as alternative revenue sources. While media networks do have the capacity to generate significant income for retailers, these networks are, first and foremost, valuable tools for enhancing the customer experience and driving sales.
It all comes down to strategic thinking. Retail media networks have a great deal of potential to help stores reinforce their brands and make personal connections with shoppers through data-driven insights and personalized shopping experiences. The biggest way for retailers to financially benefit in the long term is through the sales and customer loyalty that their networks can help build.
If You Build It, Will Brands Come?
Ultimately, prioritizing strategic thinking is the way forward for most retailers. Because ad spends are increasingly being allocated to retail networks, it’s still not the case that brands have unlimited money to just throw into every single one. This is particularly true for independents, who have to work smarter to gain access to get the attention of CPGs.
To succeed in this highly competitive space, independent retailers need to think outside the box. Whether this means joining forces with a group of other independents that gives them the scale of major chains or prioritizing offerings in a way that brands can easily recognize the network’s value, retailers need to know that merely building a network isn’t going to be enough to get attention from brands.
Ready, Set, Experiment
Despite their popularity, retail media networks are still in their infancy, leaving brands and retailers scrambling to secure strategies and figure out what works and what doesn’t. And nothing is completely reliable. In fact, a recent survey reported that 42% of advertisers questioned their investments in retail media networks, understanding it at times to be a valuable advertising tool and, at others, the cost of doing business.
There is no one-size-fits-all approach, and retailers have to be willing to try out different strategies to see what gains traction. This is going to require patience and a commitment to learning on the fly. Ultimately, the winners in retail media are going to be the ones who commit to experimenting and adapting to optimize results and drive engagement.