5 Ways to Capitalize on Retail Media’s Rise
Retail is enjoying a rebirth. As third-party cookies fade and walled gardens tighten, retail media networks (RMNs) and their valuable first-party shopper data have become the coveted keys that brands need to drive sales and accurately measure performance.
But with rapid growth comes challenges. With new RMNs launching regularly, how can brands manage so many partnerships? What leads to success for both brands and retailers in this space? How should marketers balance upper-funnel brand building with lower-funnel performance tactics?
For brands and retailers looking to thrive in the age of retail media, here are tips to advance your multichannel digital strategy with retail media networks:
1. Lean Into the Data, But Keep the User First
RMNs' most valuable aspect is speed to insights – the closed-loop attribution they provide. Brands can get rapid clarity into what marketing tactics are working and tie back those results to specific user touchpoints across channels. As third-party cookies disappear, RMN shopper data provides a clear view of the customer and unparalleled insight into what motivates a purchase. This allows for nimble optimization and personalization. Retailers know more about their customers than anyone else, and that's what makes the data special – what makes it valuable to CPGs.
However, as Criteo's VP of agency development Michael Balabanov notes, "Brands shouldn't see RMN data as the be-all and end-all. Not all data is going to be useful, and retail media data is not going to be 100% of your strategy. The key is finding the right balance between leveraging RMN data and protecting the user experience to make the ad industry better."
To keep the user experience paramount in every decision, RMNs shouldn't think like data brokers, cluttering sites and stores and overloading customers with ads in hopes of growing their data and their quarterly ad revenue. As Michael emphasized, "When you put the consumer at the heart of anything you're doing, you provide value to shoppers first – they will reward you with loyalty."
For non-endemic brands like financial services or travel, RMN data may seem less relevant. But it offers up new targeting possibilities: valuable audience persona insights. RMNs allow non-endemic brands to home in on known personas in a granular way, which makes it easier to reach ideal target customers.
2. Standardize and Simplify for Scalability
The rise of RMNs has led to fragmentation for brands, with each retailer having distinct buying models, product offerings and metrics. This makes it hard for brands to run consistent, multichannel campaigns.
To knock down these walled gardens, retailers should look to standardize and simplify core retail media metrics and billing. Standardize the basics; then offer customizations that help set you apart for a nice balance of consistency and flexibility. Standardization makes retail media accessible and scalable, and consolidation platforms like Criteo can also aggregate RMN inventory and data to make buying more seamless for brands. As Michael notes, "If we make purchasing easy, it will drive more dollars to retailers."
Brands are already working with five to 10 major RMNs and sometimes more – the ones where they feel they can reach the customers they most want to reach. A media trader just doesn't have time in the day to launch major retailer campaigns and campaigns across multiple niche retailers. Retailers need to make purchasing retail media easier. Standardization and simplification are essential for retail media to keep growing.
3. Cultivate Win-Win Partnerships
Brands need to embrace collaboration with retailers, not see retailers as a zero-sum game.
"Retailers and true RMN partners will offer brands data-driven insights, personalized creatives and detailed performance reports that bring everything together in a digestible format. They should tell you what you should be doing and what works," Michael said.
Brands and retailers both want to drive more sales and understand the full audience picture. While joint business plan development may trend in the future, three-way collaboration among brands, retailers and platforms like Criteo brings together shared insights for better results for all parties now.
Everyone should have the same overarching goals – to improve brands' visibility on the digital shelf, make marketing easier and more measurable and drive more product sales. When you lean into strong partnerships, you'll find those moments of clarity amidst the shiny objects people tend to worry about and fixate on, and you'll get an outsized benefit.
4. Set Realistic Expectations and Focus on the Fundamentals
It's easy to get swept up in retail media's momentum. But retailers shouldn't assume they'll become the next Amazon. Be realistic about what you can truly achieve. Before launching an RMN, ask yourself these questions:
- Is my shopper data truly differentiated? Can it provide value to brands?
- Will my RMN be different? Better than what exists now?
- What are my goals and aspirations? Is it better to build or partner with an existing network?
On the flip side, brands need to clearly define KPIs for each retailer partnership. Is the goal increased sales, branding or both? Your strategies should ladder up to overarching campaign objectives.
While brands look at a variety of KPIs to gauge performance such as ROAS, iROAS and lifetime value, the one metric we find they focus on most is incrementality. Measuring true incremental lift gives you a baseline for future investments and helps you optimize your retail media spending.
A/B testing is also crucial to maximizing your performance, and it's doable with the right controls to measure its efficacy. And since every consumer journey is unique, you must uncover the perfect user path. Connect data across touchpoints to determine your ideal marketing mix. Marketing mix modeling (MMM) can show you how to weigh and balance your in-store, off-site and on-site retail advertising and where to put your money for the best results.
5. Strike the Right Brand Building and Performance Balance
What's the right mix of upper-funnel brand building versus lower-funnel sales activation in retail media? The answer depends on your campaign goals and the retailer.
A healthy tension exists between brand-building and performance marketing. Share of voice and share of market even out over time. Pure performance campaigns are short-sighted. Brand building sustains long-term sales. But different RMNs have different strengths: For example, a home-improvement retailer offers more upper-funnel opportunities than a convenience store.
Brands also shouldn't view retail media as the solution to all marketing challenges; it comes down to your goals. Keep investing in upper-funnel brand building to sustain lower-funnel performance. Every retailer and campaign require a tailored strategy.
Multichannel Marketing Is the Way Forward
Retail media must integrate with your broader multichannel vision. As the lines between in-store, off-site and on-site retail advertising continue to blur, combining first-party data with a multichannel personalized approach can unlock huge potential. Mobile apps, CTV, and video and checkout advertising are all providing more in-store digitization, helping increase incremental sales.
By embracing collaboration and innovation, we can elevate the ad industry, capitalize on retail media's immense potential to drive value for consumers and usher in a new era of multichannel brand storytelling and digital marketing.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Mallory Becker is senior director, RMN at Goodway Group, where she oversees the Dollar General team and guides creative, media strategy, planning and execution for DG and their CPG brand partners. A graduate of the University of South Dakota, Mallory has over seven years' experience working at a retail media network and over 15 years of account management, ecommerce planning and merchandising experience working for two of the biggest and most recognizable retail giants, Best Buy and Target. A strong collaborator, communicator, problem-solver and cross-functional leader, Mallory's digital media background spans multichannel merchandising and marketing, content planning and more. She has a proven ability to plan and execute highly visible marketing campaigns – with measurable results that have a significant impact on business growth.
Jay Friedman is CEO of Goodway Group, which he transformed into a leading data-driven and tech-enabled digital media firm with a remote-first work model. He expanded the firm's global footprint, launching Control v Exposed (CvE) and acquiring Canton Marketing Solutions (a U.K. company, now a part of CvE) and Tuff, a thriving growth marketing agency – all of which have further strengthened Goodway's capabilities. Jay's strategic vision resulted in Goodway's award-winning culture and three consecutive Ad Age Best Places to Work wins, including ranking #1 in 2023. Goodway and Jay's mission is to make marketing the force that helps consumers connect with each other through their shared love of brands. As a result, he is a highly accomplished writer, with two books, a Golden Stevie Award and articles published in Ad Age, Adweek, Forbes and other publications. Jay frequently presents internationally on marketing, digital media and remote work. A graduate of the University of Wisconsin, Jay worked at Young & Rubicam (Y&R) prior to joining Goodway. He and his wife reside in Plano, TX, and have two grown children.