How Industry Titans Are Integrating Retail Media
At a Glance
- Grocers are investing in retail-media networks fueled by economic uncertainties and shift in consumer preferences.
- Retail media market e-commerce sales are projected to reach $1.6 trillion by 2026.
- 27% of grocery retailers express optimism regarding the potential of retail media to amplify their advertising sales.
- This article delves into the strategies and investment choices of key retailers in the grocery sector.
The Rise of Retail Media Networks Amid Economic Uncertainties
The robust growth of the $45 billion retail media market is fueled by economic uncertainties and a notable shift in consumer preferences toward e-commerce. This transition is underscored by the impending phasing out of third-party data cookies by Q1 2024. Retailers are keen to leverage this consumer shift towards e-commerce, capturing advertising expenditure from marketers eager to access unique customer insights.
The realm of retail media networks (RMNs) is characterized by its diversity, providing marketers with a wide array of choices. Nevertheless, the question of which RMN effectively caters to the sophisticated demands of modern marketers and contributes to the revenue expansion of retailers remains unanswered. According to Grocery Doppio’s report on “The Media Monetization Opportunity”, 63% of grocery retailers are actively considering or implementing an in-house media platform. A significant 27% believe this to be a substantial avenue for boosting advertising sales, a perspective that gains nuance when considering the challenges in retail media networks.
Retail media networks have become paramount for grocers striving to secure profits in a competitive landscape while simultaneously fostering shopper loyalty and robust brand connections. Amidst economic uncertainties, the allocation of funds for retail media advertising is intricately linked to consumers' purchasing decisions. In order to harness the potential of retail networks, a comprehensive understanding of the strategies and investments of key industry players is imperative.
Amazon Advertising functions as a digital advertising solution offered by Amazon.com, enabling advertisers to exhibit advertisements to Amazon customers across diverse Amazon platforms, encompassing its websites and mobile applications, as well as external websites not under Amazon's ownership. Advertisers can refine their audience targeting based on various criteria, including search keywords, specific products and categories, and customer behavioral patterns, among other variables. The platform encompasses a variety of advertising layouts, including sponsored products, sponsored brands, and display ads, to name a few. According to Insider Intelligence, Amazon is predicted to contribute approximately $23.95 billion out of the entire $29.69 billion US retail media search ad expenditure for the current year.
The key regional player has unveiled its own in-house retail media division Leap, utilizing its customer loyalty program to engage its extensive base of 14 million customers across both in-store and online digital platforms. The company handles all activations internally, refraining from outsourcing data to third-party platforms and ensuring that customers are presented with ads tailored to their preferences.
Walmart's expanded retail media, the Walmart Connect Partner Lab, enhances customer experiences across omnichannel journeys with strategic ad placement on Walmart's digital platforms. This extends to live sports streaming with NBC Universal, leveraging premium inventory and Walmart's connected TV. The Lab enables shoppable ads in partnership with Roku and TikTok, fostering brand partnerships. Advertisers gain access to consumer insights, enabling precise campaigns, efficacy measurement, and resonant shoppable content, driving engagement.
Target Roundel serves as Target Corporation's retail media network. The platform offers advertisers avenues to engage Target's customer base via diverse advertising channels encompassing in-store, online, and Target's mobile applications. The Roundel framework equips advertisers to connect with customers across multiple points throughout their shopping journey.
Kroger is amplifying its retail media network via Kroger Precision Marketing. This retail media arm offers a platform for advertisers to engage 60 million customers through precise advertising campaigns seamlessly integrated into Kroger's online and in-store shopping environments. Notably, recent partnerships empower brands to monitor vital campaign metrics, return on ad sales, cost per click, and detailed product tracking, while also gaining insights into paid and organic visibility.
Kroger's strategy leverages the insights from its robust loyal shopper program, intrinsically linked to an impressive 96% of sales. This data-driven approach continues to attract marketers, as it provides profound insights into consumers, bolstering marketing efficacy. In addition, Kroger has expanded its retail media landscape by introducing smart screens, further enriching insights, measurement, and activation capabilities.