The development of "retail media networks" has emerged as a significant trend and major opportunity for brand advertisers, as they attempt to recover from the impact of the pandemic.
In basic terms, retail media networks are when retailers make their digital and physical locations accessible to other advertisers such as through third-party brands advertising on a supermarket chain’s website. The concept of retail media networks has been around for a few years, but most brands are just getting to the point where they have the right tech stack and the right mindset to make the most of the opportunity.
Aside from the benefits of moving closer to the customer online, there’s a lot to attract brand advertisers to retail media right now. Retail media offers an entirely brand safe environment and provides advertisers with access to the retailer’s first-party data for targeting purposes, side-stepping the problems associated with third-party cookies.
In terms of performance, in a State of the Retail Media Industry Study commissioned by Criteo, 79% of brands say they have seen an increase in return on investment or return on advertising spend thanks to investments in retail media. A Digital Shelf Institute study has estimated that for every US$1 spent on a global omnichannel platform, as much as US$11 is spent in-store on the advertised products. What’s more, with retail media, spending can be closely tracked and allocated to deliver impactful brand messages at any stage of the consumer’s journey, from awareness through to conversion.
If you think about the stages of the purchase funnel (awareness, consideration, pre-purchase and purchase) often there has not been enough investment around the "consideration" and the "pre-purchase" stages. We are now seeing a lot of ad money flowing into the middle of the funnel.
Food for thought
Another reason for the rapid rise of retail media networks as an advertising channel is that it has become much easier to measure and attribute their impact. Previously, there was always an issue of personalisation versus reach. Digital media could execute personalisation well, but it did not have the reach brand marketers were looking for. Meanwhile, offline media such as TV and radio had reach but was not able to personalise to cater to varying customer segments.
The ability to adapt and serve digital advertisements that recognise the context of the consumer is a real game-changer for marketers. Retail media networks offer a new and unique opportunity for advertisers to engage advertisers in brand conversations. The food space, for example, is a major channel that is very untapped and under-utilised at this point.
Firstly, you have a captive audience, where they are sitting in one location for at least 30 minutes or so. It is not a cluttered space; minds are open to absorb new information and communication. That is a great place for brands to be present and starting "consideration" and "pre-purchase" conversations with customers.
The impact of retail media networks on brand performance can now be comfortably measured as part of an omnichannel campaign. Marketers should be working towards providing seamless experiences for their customers by working out the various journeys they take to purchase and identify the points of friction in those journeys to help better target media spending.
If you are a brand marketer, this is a great time to experiment with retail media networks. The opportunity is real and verifiable. Whether it’s a small test, or a larger experiment, it would be remiss for brand marketers not to get involved.
The writer is Vivek Kumar, director, strategic marketing and omnichannel monetisation, FairPrice Group.
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