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.

www.triadretail.com