The $1billion digital retail media opportunity
Retail has always provided marketers with premium opportunities to connect with their customers at point of sale. In today’s market, where e-commerce and mobile commerce have interrupted the traditional shopper user journey, it’s vital digital retailers provide marketers with the same ability to reach customers in ways that take full advantage of digital platforms.
With digital, comes a unique set of challenges both for the marketer and the retailer. Central to this is translating customer engagement on to new and ever-evolving platforms, where distractions are only one click away. Retailers who address these challenges can open up significant revenue potential from digital advertising and branded content – an untapped opportunity estimated by an OC&C Strategy report in 2014 to be worth $1 billion in the UK alone.
Digital retail media is a concept that has emerged over the last decade since Triad Retail Media approached Walmart with the idea that advertisers want to engage shoppers on e-commerce sites. At that time, sponsored content on such sites was a revolutionary concept, but as retailers have embraced the digital customer, so they have moved away from just content and welcomed more “publisher-like” solutions, such as IAB and native ad units.
For brands, advertising placed at the point most likely to influence customers on their path to purchase should be a no-brainer. It’s as straightforward as advertising on the last billboard before pulling into a supermarket or a price-point promotion in-store. And, of course, one click will take you to the product.
It’s also easy to understand why many retailers have taken steps towards becoming credible media businesses. Investing in digital platforms is an expensive, but essential, move and advertising enables a retailer to generate revenue every time someone visits the site, targeting them as browsers not buyers. Creating an always-on revenue stream by opening up digital platforms to advertising provides retailers with funds to invest in their core digital business, such as developing customer rewards and retention programmes or introducing free delivery.
World-renowned retailers, such as Walmart, Amazon, eBay, Carrefour and Coles, some of whom partner with Triad Retail Media, already offer advertising and brand-funded content that delivers cross-device targeting and exploits the first-party data retailers can offer. Combined with brand-safe environments, these innovative retailers are providing an attractive alternative to traditional publisher platforms.
Advertising placed at the point most likely to influence customers on their path to purchase should be a no-brainer
You may well be asking at this point how advertising affects your conversion rates. In our 11 years’ experience and mirrored in independent research conducted by Nielsen, concerns about a negative impact on conversion, while always top of mind, aren’t borne out. One way of looking at it is to think of someone going to a department store to buy a pair of shoes and they see an offer on a set of saucepans. They may buy the pans, but it won’t stop them buying the shoes. In other words when people are in a shopping mind-set, they are simply more open to a variety of offers, so all retailers have to do is join the dots and lead them to purchase.
Equally important is maintaining your brand’s trust and credibility, which can be damaged with low-quality and intrusive ad formats. It’s vital that retailers protect their reputation and make sure the customer experience and path to purchase is a good one. Triad recommends carefully selecting advertising formats and platforms, defining business rules and creating block lists of categories and brands that meet your business needs. Such a well thought out approach makes sure you are delivering what your audience wants while also working for advertisers.
GETTING THE JOB DONE
The necessary skills to run a digital retail media programme are not core to many retailers, but whether you choose to partner or bring resources in-house, you need to gain the media, sales and technology expertise without any major disruption to the day-to-day running of your business.
Of course, at Triad we believe that launching a retail media business is best executed through a third party, but whatever approach you take, one thing is essential for success – strategic buy-in, as media will introduce a new set of challenges and decisions which need to be aligned across many functions within the retailer. Shared vision, full transparency and departmental alignment are necessary within the retailer as well as with any partner.
A retail media business needs the full commitment of the retailer to becoming a media proposition as this is the only way you will be able to offer products and services that advertisers and a rapidly evolving market demand.
So will we see a shift to advertising becoming an inherent part of the digital retail experience? Looking at our American cousins, where eight of the top ten retailers already have a solution, and with shoppers increasingly picking up their tablets and mobiles to shop, it’s not a matter of if it will happen, but how quickly.