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Retail media is transforming consumer marketing more significantly, thoroughly, and quickly than most of the megatrends that have shaped the marketing industry. For brands and media agencies, this transformation often currently appears as a somewhat confusing collection of various forecasts about the ongoing transformation in allocation of marketing investments. In this article, I try to pinpoint the most important aspects of retail media transformation, particularly focusing on the creation of entirely new opportunities in in-store marketing.
In recent years, media agencies have established standardized ways of buying digital media through various media buying ecosystems. However, retail media brings along entirely new channels with new conventions for buying.
Programmatic media buying platforms are not the primary centralized solution for retail media purchases currently, and likely won't be soon either. Retail media is primarily sold through new channels established by retailers themselves and, in some cases, on marketplaces that specifically target audiences of certain retail sector players.
There are several channels to buy audiences based on retail data, but fortunately, from a media buyer's perspective, they can be generalized into perhaps three most common ones:
The fact that the number of purchasing channels and offered media products continues to grow, does not inherently make the job of a media buyer easier. There are many new ways to reach target audiences, which take time to learn, and their effectiveness in different situations can only be tested over time.
However, it is an undeniable fact that advertisers increasingly want to be present where purchase decisions are made and seek better understanding - especially during economically challenging times - of whether marketing efforts lead to actual sales. Retail media can achieve all of this.
It can also offer marketers a completely new way of utilizing a traditional channel leveraging modern retail media technologies. This channel may well be the most effective way to reach and influence customers: in-store marketing based on retail data.
Retail media in stores reaches a larger audience in absolute terms than the e-commerce platforms of major players in the industry. This is true everywhere, including in the United States, where the market share of e-commerce is significantly higher than elsewhere in the world.
As studies from various parts of the world and different cultural spheres show that approximately 80% of purchase decisions are still made in brick-and-mortar stores, and only about 8% of consumers find advertising in the store environment disturbing, it is clear that the role of stores in reaching consumers should be central for almost all consumer goods marketers.
As a media environment, the store has strengths that marketers highly appreciate. Firstly, the environment is not saturated with endless advertising messages. Compared to many online media, stores may even appear as a calm media environment.
And perhaps more importantly, consumers are positively receptive to messages while shopping. In the store, consumers seek information and inspiration; they are curious. When the right message is presented to the customer at the right time and in the right context, it is perceived as relevant rather than intrusive. This leads to the true superpower of in-store retail media: targeting.
Stores understand their customers' needs exceptionally well. At least those retail chains that are particularly successful know how important comprehensive and continuously evolving customer insight is. Insight accumulates from various retail systems and loyalty programs, and by analyzing and synthesizing this data, it is possible to develop unparalleled targeting capabilities.
In-store targeting is based on the characteristics of the audience present in the store at any given time and the best sales hours for different products. By varying these factors and making further refinements, such as based on store type, geography, and time, remarkable results can be achieved, which are simply impossible to attain in other channels.
The potential of retail media is not limited to increasing the sales of products sold in stores. Audiences based on retail data may interest a wide range of advertisers: an automotive brand or an insurance company may want to specifically target an audience with certain consumption habits.
Media agencies must understand that the targeting capabilities of in-store retail media are more comparable to digital channels than, for example, digital out-of-home advertising, even though distribution occurs mainly on digital surfaces in both cases. Agencies that acquire excellent understanding and experience of the targeting possibilities of in-store retail media will be invaluable partners for brands looking to market or grow their consumer product.
The power of in-store retail media is not solely based on targeting. At the core of its value creation is measurability. Because the retailer knows what is being advertised at any given moment and what is being sold at the same time, the effectiveness of marketing activities can be measured with precision.
This is called closed-loop advertising. Precise targeting and measurement of actions provide the opportunity to continually optimize and adjust advertising to be even more effective.
This provides an excellent opportunity for media agencies to be important and a true business partner for brands in retail media. By utilizing intelligently the enormous potential of closed-loop advertising and helping brands succeed in this new marketing environment, an agency can demonstrate its value both in numbers and as an expert. The added value provided to brands through the collaboration between the agency and retailer elevates the appreciation of marketing to a new level.
The primary means to do in-store retail media advertising is with typically advertising on digital screens. However, this is by no means the only way to conduct advanced retail media. We have gathered here a few examples of what in-store retail media as a marketing channel can mean now and, in the future, as well as how media agencies and creative agencies can seek new innovative solutions for in-store marketing for brands.
With a modern in-store retail media platform, media agencies can manage their clients' campaigns within the retail network themselves. Brands can build their own audiences, and the agency decides how and when the brand appears in stores within the framework of the agreement.
A food brand with its own comprehensive recipe database is in an excellent position in the new environment of in-store retail media. In stores, recipes are in the right context to inspire customers to try new things and vary old ones. By integrating the brand's recipe database into the presentation layer, the entire knowledge is automatically made available to consumers. When recipes are targeted to the right customers at the opportune moments, and when retailer’s customer insights is used, great results can be achieved.
When considering the actual tools that convey in-store retail media to consumers, they are most commonly displays or speakers. However, holistic sensory marketing is rapidly becoming a significant part of in-store advertising and has already achieved significant sales growth. Multisensory marketing gives brands the opportunity to reach customers with not only visuals and sounds but also with scents and even tastings of new products. Multisensory installations can be constructed to be easily movable and adaptable in-store to reflect the identity of a new brand instantly.
