Separating fact from fiction in the always-evolving landscape of retail media networks.
Retail media networks are rapidly growing in popularity as a key way for retailers to monetize their online presence. Last year the total retail media ad spend surpassed $40 billion dollars and is expected to exceed $60 billion by 2024. By now, nearly every CPG brand has made space in their budget for retail media, and grocers are firming up their strategies to get their piece of the pie.
But many relationships between CPGs and major chains aren’t amicable, and both sides have plenty of gripes about the current landscape. This frustration has the capacity to bring exciting new opportunities to the space and create programs that can simultaneously benefit retailers and brands, all while bringing crucial savings to their customers. At the recent National Grocers Association Show, Adsta Principal Shawn Tuckett sat down with MorningNewsBeat’s Kevin Coupe to discuss the biggest trends in the industry, including the ways that retail media networks can be used most effectively.
Keep It Simple
When any new technology is introduced, it's natural to want to explore its full potential and see what it’s capable of. However, it’s important to remember that quantity doesn’t always equal effectiveness. As more and more retail media networks are introduced, there is an increasing likelihood for their offerings to overwhelm the digital shopper if not structured appropriately.
Ensuing chaos comes as a result of retailers trying to maximize their opportunities for profits at the expense of the shopper... “I think the one thing that retailers have to be careful of…is to make sure that it doesn’t become too much clutter,” said Coupe, “if the customer feels that they’re constantly being sold something, then it could have the opposite effect.”
Spending That Make Sense
Brands are diversifying their ad spend, with more than half of all marketers advertising on five or more retail media networks. All this spending in an effort to find the most effective connection with today’s consumers. While grocery eCommerce campaigns offer a series of benefits to the brands involved, including better attribution, it is important to remember they still only represent 5-15% of total grocery sales. If optimal reach is the goal, brands must diversify their retail media spend in order to reach both in-store and online shoppers.
It all comes down to strategic thinking. Retail media networks have a great deal of potential to help brands reinforce their visibility and make personal connections with shoppers through data-driven insights and personalized shopping experiences. But the biggest way for brands to financially benefit in the long term is through the sales and customer loyalty that their retail media campaigns can help build.
Finding the Perfect Combination
Ultimately, prioritizing strategic thinking is the way forward for most CPGs. Even though ad spends are increasingly being allocated to retail networks, it's still not the case that brands have unlimited money to just throw into every single one. Even major brands have to be strategic and work smarter to gain access to the audience they’re after.
To succeed in this highly competitive space, CPGs need to think outside the box. This includes strategies that tap into creative resources and work to expand brand reach beyond the confines of major retail chains.
Ready, Set, Experiment
Despite their popularity, retail media networks are still in their infancy, leaving brands and retailers scrambling to secure strategies and figure out what works and what doesn’t. And nothing is completely reliable. In fact, a recent survey reported that 42% of advertisers questioned their investments in retail media networks, understanding it at times to be a valuable advertising tool and, at others, the cost of doing business.
There is no one-size-fits-all approach, and brands have to be willing to try out different strategies to see what gains traction.
This is going to require patience and a commitment to learning on the fly. Ultimately, the winners in retail media are going to be the ones who commit to experimenting and adapting to optimize results and drive engagement.