In your opinion, what has been the catalyst for this explosive growth of retail media?
The cause of growth is due to three factors:
Performance: Reaching consumers at the right time and place is akin to search engine marketing, where advertisers are placing their ads in front of hand-raisers. Taking this thought a step further, audiences can purchase right then and there, instead of clicking to the advertiser’s website.
Data: Retail media has so much first-party data that is leveraged to target in-market consumers even when they are not searching. These consumers can include category shoppers, brand shoppers, and even competitor product shoppers. Overlaying this data with recency, lapsed, and dollars spent gives you a pretty robust dataset to target against – especially with the continued threat of third-party cookie deprecation and the effects on third-party data as a targeting tool. Sales and revenue are other valuable pieces of data that retail media partners can provide. For instance, Target/Roundel can report on sales generated on your website AND product pages when leveraging both on-Target and off-Target media.
Pay-to-play: To get product SKUs into the aisle and to win merchant buyers, you need to show product marketing support, and a lot of retailers are looking at retail media spend as a factor in getting placement.
Retailers are becoming media owners. How will this shift impact brand strategy and media planning?
Retail media is now part of almost all media plans at Marcus Thomas. This offering affects brand strategy and media planning in that you now have another channel to support across all parts of the funnel. Retail media works the best when there is a full-funnel strategy in place specific to each retail channel. Most marketers think retail media is solely a lower-funnel channel. It is not. To win consumers within a specific retail channel, you need to create awareness, consideration, and conversion both on the .com and in-aisle (minus Amazon, of course), especially when consumers are looking for an omnichannel shopping experience. This situation is especially true as Generation Z (62.7%) and Millennials (64.6%) are twice as likely as Boomers (32.9%) to use omnichannel approaches, where shoppers used more than one channel in their purchase journey (Source: Near Intelligence, 2023).
As performance marketing becomes more important to prove marketing ROI, third-party data declines, and more retailers open their media platforms, more spend will go to this channel, where performance is on-par and sometimes even stronger than search. Media planners need to learn the various offerings and players in retail media and make it part of their media plans as these channels are being demanded by savvy clients. On the client side, we’ve seen this channel move from the sales and ecommerce team to the marketing team’s control as part of the overall media budget. Further complicating where this budget should come from is that some of these platforms like Roundel and Amazon allow both on-site/on-product page media offerings alongside offerings that leverage their channels and data to drive traffic to client .coms.
What opportunities do artificial intelligence (AI) and customer experience (CX) data offer brands in the customer journey?
Personalization is the key here; Being able to customize the shopper experience with the right products in an omnichannel way as “84.3% of Gen Z and Millennials are more encouraged to shop in stores with personalized in-store recommendations based on previous shopping history versus 59% of Generation X and Boomers” (source: Business Wire, September 2023). AI can consolidate data from various channels using an AI-powered customer data platform (CDP) to create a unified customer profile, including past interactions, preferences, and past purchases. This profile can then tie back to retailer data to create future recommendations and personalize the marketing of these products both online and in the store through apps and check-in kiosks. Knowing which channels and paths a consumer chooses can then increase personalization, with the right products and offers appearing on the right channels.
How can brick-and-mortar locations evolve so they remain relevant in a digital world?
Gen Z and Gen A want to shop where and when they feel like it – often browsing and buying across different paths with the expectation of brands knowing them each step of the way, across their devices. Brick-and-mortar locations need to think of each interaction as a unified brand interaction, with all channels serving the best experience for the brand.