The retail media sector has evolved rapidly over the 2020s, growing from a fringe interest of the largest retailers to a sector-wide shift in how brand marketing can operate. It has also created a much-needed new revenue stream for retailers and created a whole new ecosystem of inter-related brands, retailers, tech platforms and agencies.
This evolution is set to continue throughout the decade, with the next three to five years marking radical shifts in retail media’s place in the marketing pantheon, as well as a raft of incremental changes. There will also be challenges, many of which relate to brands and retailers having to rapidly and constantly adjust to new ways of thinking as well as the new opportunities created by these changes.
These shifts will impact all parts of the value chain: retailers, brands and agencies, while tech companies will seek to sit at the heart of these changes by delivering the solutions needed to make it all work.
So, what are the key changes, opportunities and challenges over the next three to five years and how do they impact the different parts of the ecosystem?
Hyper-personalisation driven by AI
Gone are the days of generic advertising. Retail media puts paid to that, especially as it replaces cookie-driven marketing. However, using the power of artificial intelligence, the level of personalisation delivered through marketing will explode.
Machine learning algorithms will analyse vast amounts of retailer-owned, first-party customer data across demographics, purchase history browsing behaviour and even real-time instore interactions. This will allow brands to tailor ad creatives, product recommendations and promotions to individual shoppers, significantly increasing their relevance and, it’s hoped, their engagement rates.
Imagine a customer browsing for running shoes online. Based on their past purchases and browsing patterns, the retail media platform might recommend specific running shoes using AI-powered product descriptions that highlight those features most relevant to that customer’s needs, such as cushioning for long runs or stability for pronation.
Similarly, in a physical store, digital signage powered by AI could recognise a customer and display personalised promotions based on their loyalty programme data.
The rise of shoppable livestreaming
Livestreaming is currently exploding in popularity and retail media will further deepen this trend. Shoppable livestreaming experiences will allow viewers to seamlessly purchase products featured in real-time. Influencers, brand ambassadors and even retail staff can host live sessions showcasing products, providing demonstrations and answering viewers’ questions.
This interactive format fosters a deeper connection with brands and creates a sense of urgency, potentially leading to higher conversion rates. Some of the key features to watch in shoppable livestreaming include live product tagging, where, viewers can click on products displayed during the livestream to be directed to the product page for immediate purchase.
Live polls, Q&A sessions and gamification elements can also increase viewer engagement throughout the livestream. Exclusive discounts or deals can also be offered only during the livestream can incentivise viewers to purchase immediately.
Voice commerce takes centre stage
While voice assistants such as Google Assistant and Amazon Alexa have been a slow burn, they are still slowly integrating into daily life. Retail media is likely to adapt to this shift by optimising ad formats for voice search and voice-activated purchases.
Imagine searching for ‘organic laundry detergent’ through a voice assistant and receiving targeted audio ads, or sponsored product recommendations within the voice search results. Additionally,
voice-activated shopping carts will allow consumers to seamlessly add products to their carts and complete purchases through voice commands.
For retailers, brands and marketing agencies, this will require a shift to include detailed product descriptions, optimised for voice search, to ensure relevant information reaches consumers searching for specific items.
Brands then can bid for prime placement within voice search results, ensuring their products are
top-of-mind for consumers using voice assistants for shopping, in much the same way as they bid today for prominent placement on-site and in-app.
Coming the other way, voice assistants could be used to announce special offers or loyalty programme rewards to incentivise voice-activated purchases from those users that have opted in for such push messaging. Voice changes the emphasis from simple advertising to a more conversational approach. Ultimately, it could even leverage influencers or celebrities to voice the messages.
Omnichannel for a seamless customer journey
Retail media is already moving beyond siloed online and offline experiences. Omnichannel integration will continue to be paramount in retail media and ecommerce, creating a cohesive customer journey across all touchpoints.
Imagine seeing a targeted ad for a new pair of jeans online, then encountering the same product displayed prominently in the denim section of a local store. Additionally, loyalty programmes and purchase history data could be seamlessly integrated across online and physical stores, offering a personalised experience regardless of how customers choose to shop.
The power of omnichannel retail media is potentially awesome for retailers and brands. Cross-channel retargeting can be powerful, with consumers who browse a product online retargeted with ads when they visit a physical store, and vice versa. Instore, dynamic digital signage can also display personalised promotions and product recommendations based on a customer’s loyalty programme data, or items scanned through a self-checkout.
There is also the possibility to integrate through click and collect, with retail media ads promoting click-and-collect options, allowing customers to purchase online and pick up their items conveniently instore.
The rise of the independents
While major retailers such as Amazon, Tesco, Walmart and Target have established their own powerful RMNs, there is now a growing trend for independent RMNs looking at the potential of this new form of ecommerce marketing.
These indie platforms aggregate data from multiple retailers, offering brands a single point of access to reach a wider audience across various shopping destinations. This can be particularly beneficial for smaller brands that may not have the resources to manage individual partnerships with each retailer.
Some existing independent networks include The Current, a partnership of the Independent Grocers Alliance (IGA) and Ideal, which leverage grocery data from thousands of indie grocers across the US and offer brands a way to reach them. CitrusAd and Freestar both run indie RMNs in Europe for a range of sectors, including retail, while Umami Media runs a RMN specialising in petrol pump ads, digital signage and POS displays for US convenience stores and gas stations.
These indie RMNs are set to grow since retail media are becoming a bigger play for brands due to their interesting value proposition. They potentially reach a broader customer base by advertising across multiple retail platforms through a single independent RMN. Aggregating data from multiple sources aids targeting for brands, while the independent RMN offers those brands a single, simple interface to manage campaigns across multiple retailers.
The role of social commerce
Retail media will need to adapt to address evolving consumer behaviour across their digital footprint. The increasing popularity of online grocery shopping, for example, will require tailored ad formats and targeting strategies for this growing segment. Additionally, the rise of social commerce, where consumers discover and purchase products directly through social media platforms, will require retail media to integrate seamlessly with these evolving shopping experiences.
Retail media platforms will have to partner with social media platforms to enable seamless product purchases directly within social media feeds. At the same time, RMNs will need to increasingly leverage influencer marketing campaigns to promote products and drive traffic to retail media platforms.
To do this, RMNs need to become adept at ‘social listening’ and gaining insights into what their customers are doing in social. This involves detailed analysis of social media conversations to inform ad creative development and product recommendations within retail media platforms.
This list of things to look forward to is part of the extensive RetailX Retail Media 2024 report.
Drawing on ConsumerX research, third party data and value-chain testimonials, the report explains the concept of retail media networks, their evolution, how to leverage them from any point within the value-chain and where they go next.
Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter sent straight to your inbox.
You are in: Home » Retail Media » ANALYSIS The road ahead for retail media networks
ANALYSIS The road ahead for retail media networks
Paul Skeldon
The retail media sector has evolved rapidly over the 2020s, growing from a fringe interest of the largest retailers to a sector-wide shift in how brand marketing can operate. It has also created a much-needed new revenue stream for retailers and created a whole new ecosystem of inter-related brands, retailers, tech platforms and agencies.
This evolution is set to continue throughout the decade, with the next three to five years marking radical shifts in retail media’s place in the marketing pantheon, as well as a raft of incremental changes. There will also be challenges, many of which relate to brands and retailers having to rapidly and constantly adjust to new ways of thinking as well as the new opportunities created by these changes.
These shifts will impact all parts of the value chain: retailers, brands and agencies, while tech companies will seek to sit at the heart of these changes by delivering the solutions needed to make it all work.
So, what are the key changes, opportunities and challenges over the next three to five years and how do they impact the different parts of the ecosystem?
Hyper-personalisation driven by AI
Gone are the days of generic advertising. Retail media puts paid to that, especially as it replaces cookie-driven marketing. However, using the power of artificial intelligence, the level of personalisation delivered through marketing will explode.
Machine learning algorithms will analyse vast amounts of retailer-owned, first-party customer data across demographics, purchase history browsing behaviour and even real-time instore interactions. This will allow brands to tailor ad creatives, product recommendations and promotions to individual shoppers, significantly increasing their relevance and, it’s hoped, their engagement rates.
Imagine a customer browsing for running shoes online. Based on their past purchases and browsing patterns, the retail media platform might recommend specific running shoes using AI-powered product descriptions that highlight those features most relevant to that customer’s needs, such as cushioning for long runs or stability for pronation.
Similarly, in a physical store, digital signage powered by AI could recognise a customer and display personalised promotions based on their loyalty programme data.
The rise of shoppable livestreaming
Livestreaming is currently exploding in popularity and retail media will further deepen this trend. Shoppable livestreaming experiences will allow viewers to seamlessly purchase products featured in real-time. Influencers, brand ambassadors and even retail staff can host live sessions showcasing products, providing demonstrations and answering viewers’ questions.
This interactive format fosters a deeper connection with brands and creates a sense of urgency, potentially leading to higher conversion rates. Some of the key features to watch in shoppable livestreaming include live product tagging, where, viewers can click on products displayed during the livestream to be directed to the product page for immediate purchase.
Live polls, Q&A sessions and gamification elements can also increase viewer engagement throughout the livestream. Exclusive discounts or deals can also be offered only during the livestream can incentivise viewers to purchase immediately.
Voice commerce takes centre stage
While voice assistants such as Google Assistant and Amazon Alexa have been a slow burn, they are still slowly integrating into daily life. Retail media is likely to adapt to this shift by optimising ad formats for voice search and voice-activated purchases.
Imagine searching for ‘organic laundry detergent’ through a voice assistant and receiving targeted audio ads, or sponsored product recommendations within the voice search results. Additionally,
voice-activated shopping carts will allow consumers to seamlessly add products to their carts and complete purchases through voice commands.
For retailers, brands and marketing agencies, this will require a shift to include detailed product descriptions, optimised for voice search, to ensure relevant information reaches consumers searching for specific items.
Brands then can bid for prime placement within voice search results, ensuring their products are
top-of-mind for consumers using voice assistants for shopping, in much the same way as they bid today for prominent placement on-site and in-app.
Coming the other way, voice assistants could be used to announce special offers or loyalty programme rewards to incentivise voice-activated purchases from those users that have opted in for such push messaging. Voice changes the emphasis from simple advertising to a more conversational approach. Ultimately, it could even leverage influencers or celebrities to voice the messages.
Omnichannel for a seamless customer journey
Retail media is already moving beyond siloed online and offline experiences. Omnichannel integration will continue to be paramount in retail media and ecommerce, creating a cohesive customer journey across all touchpoints.
Imagine seeing a targeted ad for a new pair of jeans online, then encountering the same product displayed prominently in the denim section of a local store. Additionally, loyalty programmes and purchase history data could be seamlessly integrated across online and physical stores, offering a personalised experience regardless of how customers choose to shop.
The power of omnichannel retail media is potentially awesome for retailers and brands. Cross-channel retargeting can be powerful, with consumers who browse a product online retargeted with ads when they visit a physical store, and vice versa. Instore, dynamic digital signage can also display personalised promotions and product recommendations based on a customer’s loyalty programme data, or items scanned through a self-checkout.
There is also the possibility to integrate through click and collect, with retail media ads promoting click-and-collect options, allowing customers to purchase online and pick up their items conveniently instore.
The rise of the independents
While major retailers such as Amazon, Tesco, Walmart and Target have established their own powerful RMNs, there is now a growing trend for independent RMNs looking at the potential of this new form of ecommerce marketing.
These indie platforms aggregate data from multiple retailers, offering brands a single point of access to reach a wider audience across various shopping destinations. This can be particularly beneficial for smaller brands that may not have the resources to manage individual partnerships with each retailer.
Some existing independent networks include The Current, a partnership of the Independent Grocers Alliance (IGA) and Ideal, which leverage grocery data from thousands of indie grocers across the US and offer brands a way to reach them. CitrusAd and Freestar both run indie RMNs in Europe for a range of sectors, including retail, while Umami Media runs a RMN specialising in petrol pump ads, digital signage and POS displays for US convenience stores and gas stations.
These indie RMNs are set to grow since retail media are becoming a bigger play for brands due to their interesting value proposition. They potentially reach a broader customer base by advertising across multiple retail platforms through a single independent RMN. Aggregating data from multiple sources aids targeting for brands, while the independent RMN offers those brands a single, simple interface to manage campaigns across multiple retailers.
The role of social commerce
Retail media will need to adapt to address evolving consumer behaviour across their digital footprint. The increasing popularity of online grocery shopping, for example, will require tailored ad formats and targeting strategies for this growing segment. Additionally, the rise of social commerce, where consumers discover and purchase products directly through social media platforms, will require retail media to integrate seamlessly with these evolving shopping experiences.
Retail media platforms will have to partner with social media platforms to enable seamless product purchases directly within social media feeds. At the same time, RMNs will need to increasingly leverage influencer marketing campaigns to promote products and drive traffic to retail media platforms.
To do this, RMNs need to become adept at ‘social listening’ and gaining insights into what their customers are doing in social. This involves detailed analysis of social media conversations to inform ad creative development and product recommendations within retail media platforms.
This list of things to look forward to is part of the extensive RetailX Retail Media 2024 report.
Drawing on ConsumerX research, third party data and value-chain testimonials, the report explains the concept of retail media networks, their evolution, how to leverage them from any point within the value-chain and where they go next.
Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter sent straight to your inbox.
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