There has been an explosion in retail media networks over the past couple of years, with brands like Walgreens, Ulta, Tesco, CVS, Walmart, Kroger and Best Buy entering the space. What’s driving the rise in popularity?
Well, retail media is a huge revenue opportunity. We recently hosted a webinar on retail media, featuring Forrester’s Collin Colburn, where he shared that most retailers were building media networks to increase profit and margins and diversify revenue, according to a recent survey Forrester conducted as part of the first Forrester Wave evaluation of sell-side retail media solutions:
- A quarter of retailers are generating more than $100 million in revenue from their retail media networks, according to Forrester’s 2021 Sell-Side Retail Media Solutions Wave Customer Reference Survey, Q3 2021. Although most in the survey are generating less than $100 million, that’s still largely new revenue for the business and highly lucrative.
- According to Forrester survey data that Colburn presented in the webinar, most retailers say their retail media margins range from 50-70%. Those margins are even higher with on-site advertising, at 70-80%
It’s no secret that most retailers in this space are working with multiple technology and service providers to get their media networks up and running at scale, but many say the perfect retail media network doesn’t yet exist.
I believe it does exist—you just need to know what to look for.
Here are some key insights from our webinar with guest Forrester to help you navigate the complicated, nuanced and fairly new world of retail media:
Know what you need in a partner
From conversations with retailers (and our new partner, CitrusAd), there are four categories most retailers need for a comprehensive retail media strategy:
- All-in-one platform: A platform that has everything a retailer needs, from on-site to off-site advertising, is not only easier to manage but also easier for brands to buy into. But “all-in-one” also encompasses the services component, not just the technology side. This kind of partnership requires skilled professionals that understand this space already and can execute everything from self-service to a fully-managed solution.
- Customization: With retailers of all sizes now entering the media space, not just the big conglomerates, there needs to be customization and flexibility for any tech partner. What works for one retailer isn’t necessarily going to work for another.
- Real-time reporting and trusted measurement: Using AI to stay up on real-time behavior is critical for understanding who is in market and who just purchased.
- Personalization: This is where first-party retailer data comes into play to deliver on mass personalization at scale—personalization that speaks to individual customers, not just segments (which unfortunately is still all-too-common today).
Start with off-site advertising to build traffic and quick wins
In the webinar, Forrester’s Colburn said: “Most [retailers] start with off-site media—being able to place display media, social ads, etcetera on other publisher sites—using the retailer’s first-party data to then get traffic back to the retailer.
“And then once they start getting more of that traffic on the site, they can start doing things like on-site search, on-site display, and [build] offerings and capabilities around on-site and off-site media management.”
Driving site traffic with off-site media is crucial for a well-functioning media network, but it also needs to connect to your on-site advertising and be part of a holistic strategy—delivering a connected retail media ecosystem. A one-stop-shop is not only easier to manage, but also ensures seamless connectivity and optimization between all retail media channels on-site, off-site and in-store.
Know how your tech partners identify real people online
Retailers can make the most of their first-party data (in a world where third-party identifiers are soon to be gone) by partnering with retail media solution providers who prioritize true identity resolution. Meaning: creating consistent consumer IDs across all platforms (on-site and off-site as well as in-store and online), accounts and devices. Siloed efforts not only complicate measurement, but also fail to deliver reach and scale with retailers’ valuable first-party data.
This means that the optimal retail media network should start with accurate individual data, which then informs how you talk to that individual shopper across digital and physical properties, and then data from those interactions circles back to inform each individual shopper’s next interaction with your brand in a continuous loop:
What is your retail media strategy missing?
The truth is that many of these capabilities haven’t existed across on-site and off-site, digital and physical properties for retail media until more recently. It’s a new and complicated landscape of technology and service providers for retail media, and we’re starting to see more consolidation of solution providers, which means retailers now get the things they love with different partners together as one connected solution.
Epsilon and CitrusAd are largely leading this charge, creating a crucial combo of on-site and off-site advertising capabilities, recognizing that an optimized media network takes collaboration between experts in various fields. Epsilon’s and CitrusAd’s strengths and complimentary offerings will enable us to lead a new generation of retail media based on real identity. (You can see how both Epsilon and CitrusAd stack up in Forrester’s recent report: The Forrester Wave: Sell-Side Retail Media Solutions, Q3 2021.)
The technology and solutions do exist today to drive the experiences that will make your retail media strategy successful—both for your investment and your business’ bottom line.
