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OPINION The in-store opportunity for retail media 

With Morrisons Media Group introducing screens and new branding and marketing opportunities into its stores this month, Colin Lewis takes a detailed look at why in-store retail media matters

“In-store will begin to emerge as the “new TV”—a mass-reach advertising vehicle ideal for brands. Digital surfaces at the front of the store, checkout, endcap, smart cart or cooler doors—deliver what brands want and what linear TV has lost: fast reach, high attentiveness, younger audiences and cultural relevance.” So says Andrew Lipsman, Founder, Media, Ads and Commerce – and he’s right.

Retail media is no longer about selling sponsored products. Retailers are rapidly changing their proposition to be “full funnel”, creating advertising units and capabilities that map across marketing channels and touchpoints in the customer journey. 

In the case of Retail Media, retailers are expanding their propositions to off-site, social, and streaming TV formats.

The biggest opportunity is the digitising of surfaces instore, including digital billboards, digital screens in store and at POS that is becoming ‘front and centre’.  This should not be surprising as we all know that shoppers instore are still 70-90% of traffic for many retailers – instore delivers ‘audiences at scale’

Stores still matter

A quick analysis of the revenues of four retailer from the US, UK and Australia shows the importance of the instore experience even in 2024. 

The story is similar for other retailers:

  • 81% of Target’s revenues are captured instore.
  • 89% of Home Depot revenues are captured instore.
  • 93% of Kroger revenues are captured instore.

Ryan Mayward, VP of Retail Media Sales at Walmart Connect, pointed out at the NRF Big Show in New York in January that: “Instore is a channel with broadcast-level scale.”

Of course, in-store point-of-sale has been around since the first stores were created thousands of years ago. Retailers and brands know that in-store reaches shoppers in a high-visibility plus attention plus intent environment.

The difference is now that there is new inventory, new technology and new creative that is available: the high-definition compelling screens that you see in Piccadilly Circus and Times Square are now coming to a store near you.

In addition, new technologies now enable that the operational aspect of in-store screens to be less hands-on. 

Pressures around sustainability mean that retailers and shopper marketing teams will have to adopt more digital options if they wish to keep their ‘license to operate’. The idea of “cardboard” point of sale and endcaps that must be thrown out every two weeks after a promotion does not really map to any sustainability story.

Some global examples

For example, the largest retailer in New Zealand, The Warehouse Group, installed digital screens right across their network with high impact, TV quality creative.

The Warehouse Group (TWG) is a New Zealand success story, from a single store to become one of the largest retailing groups in New Zealand with NZ$3 billion revenues, 260+ retail stores and12,000 team employees across our locations. Nearly every adult Kiwi comes through the doors of either a Warehouse or Noel Leeming electronics store every month. 

Alex Lawson, Head of Strategy and Media from MarketMedia, The Warehouse Group’s retail media network, says: “Our instore environment is powerful and was being underutilised. In-store at TWG can claim a really impressive reach and audience capture. Bringing screens into that environment was a no brainer as suppliers are keen to activate campaigns at the point of purchase and the power of our audience capture.”

In-store retail media challenges

The challenge to the potential of instore are arguably bigger than pure online Retail Media. There are some fundamentals about instore retail media to be addressed:

  1. Who is going to pay? Screens are expensive to buy – are they capex or a opex item?
  2. Who is going to maintain? Screens require a CMS, Wi-Fi and a guarantee of uptime. Busy store managers do not see these as part of their role – nor should they.
  3. Who or what is going to integrate with other Retail Media?  Advertisers want integrated media plans, and, as we know, excellent data if they are to invest in new channels.
  4. What will be the impact on ways of working? Instore is often the responsibility of trade marketing and or shopper marketing. How will these teams react if they are asked to hand them over to Retail Media teams?

Leaving the last work to Andrew Lipsman of Media, Ads + Commerce: In-store retail media is still in its early innings and will depend on retailers investing in store digitization before advertisers can put meaningful dollars against it. But retailers have clearly awoken to its potential and are now in active pursuit.”

Retail Media Networks are the focus of a brand new RetailX Events conference this June. 

MediaX explores the experiences of well-established retailers in this space to new entrants and the agencies who are helping make things tick. For the full list of speakers, agenda and to register – click here.

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