Retail media is growing rapidly. According to Dr Daniel Knapp, IAB UK Retail Media Consultant, cyclical economic shifts and structural changes in the digital advertising industry have created a “perfect storm” that is pushing retail media into its teens.
“Retail media in 2023 will grow 7.8 times faster than the total digital advertising market,” Knapp said, “due to the quality of the data and the ability to deliver measurable impact in highly uncertain economic times.”
At Campaign’s recent retail media breakfast, Andy Stephen, managing director of UK retail and partnerships at advertising platform Criteo, said retail media might be “still a nascent business for many” but it’s a industry that is “rapidly changing”.
From the sofa to the store
Retail media offer highly engaged audiences and the chance to speak to customers “in a language and environment they are receptive to,” according to Uche Ofili, agency head of Tesco’s Media and Insight platform, which launched in November 2021.
“Through the pandemic, it’s a place where advertisers quickly learned they had guaranteed reach,” said Waitrose’s Philip Eacott, “and to have a comprehensive proposition is really compelling. Retail media provides a unique opportunity for brands and advertisers to build a truly connected and omnichannel experience.”
That ability to track the entirety of the customer journey gives retail media an edge. “We can connect the dots between advertising exposure and customer behavior across online and offline touchpoints,” Ofili added.
“It’s about attribution in a sense,” said Deliveroo’s Alex Prouhet. “Through our data license agreements, we are able to give our partners a truer view of not only the return on investment, but also what drove that purchase. It is encouraging that we are all committed to a customer-centric model.”
Why Retail Media Matters
It’s great for brands, but it’s also becoming a business necessity for retailers. “It is important for the industry to understand the dynamics of retail and lower margin,” said Tom Langley of the John Lewis Partnership. “Companies like Amazon and Alibaba have lowered prices for customers and make money through data services and advertising. So it’s a conscious change in the business model of how retailers need to operate – we just need to do it the right way.”
“You can learn a lot from digital marketing in the 2000s,” Langley mused. “There was no real emphasis on the quality of the content. It was all about what you could do with the data and how fast you could sell it. And that industry has pretty much disappeared.”
“Trust is extremely important,” Eacott said. “Many of our customers see Waitrose and John Lewis as one of the most trusted brands in the UK. Many brands see a listing within Waitrose as a seal of endorsement.”
Prouhet described this link as a “sacred trust with consumers,” adding: “If we want to progress as an industry within digital, building trust from a data perspective is a big part of that.”
Standardization and centralization
The goal is to grow the retail media industry, and doing so requires a degree of collaboration.
According to Andy Stephen, a centralized marketplace is part of the vision for Criteo, which works with 150 retailers around the world. “Every retailer has a different vision of how to run their retail media business,” he said. “With our technology, we try to enable whatever model the retailer wants, but of course we want to standardize. Let’s make sure they’re connected to the right platforms and partners that agencies and brands can use at scale. I think that’s what we can aim for as an industry.”
Anna Khan of the John Lewis Partnership said: “There is a challenge around standardizing ad formats and measurement frameworks, so we need to come together as an industry.”
Eacott added: “Standardizing and establishing KPIs can help the retail industry grow together. We believe there is a huge opportunity for agencies and brands to better align with retailers’ marketing plans to achieve that win-win solution. [for brands, customers and retailers] of which we so often hear.
According to Stephen Shepherd of Tesco’s Media and Insight platform, “we are all moving towards the same goal. Retail media is influencing the entire advertising ecosystem.”
Langley urged industry bodies like ISBA and IAB to provide assistance because “we’re not trying to compete with each other, we’re trying to increase industry spending.”
“We need to put the building blocks in place, so I think as an industry, we are poised for success,” concluded Criteo’s Andy Stephen.