Things to keep in mind while building a successful retail media Share via

Ever since the Covid-19 pandemic has hit the globe, e-commerce has seen a massive uptick in its business and has acquired millions of new customers to its fold in a brief period. In addition, consumer shopping behavior has dramatically shifted to the online channel due to safety concerns and the ease of shopping from the comfort of their homes. This rapidly changing consumer preference has led brands in the digital space to start advertising on the retail media to be closer to the customer’s purchase journey and benefit from the marketplace’s robust shopper data.

According to a recent report by eMarketer, ad spending on retail media will be more than USD 31 billion in the US alone, increasing over 50 percent over 2020. The market research company predicts it will surpass the USD 50 billion mark by 2023, with most ad spending expected to come from the e-commerce channel. Global consulting firm BCG estimates that big retailers are already racing towards a USD 100 billion high-margin annual revenue prize in retail media, with Amazon leading the share (more than USD 26 billion in 2021) and other major retailers like Walmart, Target, and Kroger moving fast to establish their positions.

Experts believe that the absence of third-party cookie tracking and tightening of privacy and security standards will propel retail media’s significance to newer heights as brands will increasingly move towards advertising on marketplaces and gain consumers’ attention when their intent to purchase is at its peak. In addition, the ability of retail media to access tons of first-party data and closed-loop measurement that helps the advertiser identify the campaign’s success makes it a prominent channel in the AdTech world. As more and more retailers are looking to embark on the retail media journey and monetize their data, and create an additional revenue stream in the already thin margined e-commerce business, there are certain points they need to keep in mind to build it successfully.

Not all retailers have access to loads of quality first-party customer data like Amazon or Walmart. To create a successful retail media business, marketplaces should have a profound understanding of their consumers and should be able to use the available data to generate higher sales for their partners. They should also have scalable first-party data that can benefit their partners in the long run and provide value for every dollar spent on retail media. That means retailers will have to drive more consumer traffic on their websites to build a sustainable revenue model. A research report from Forrester said that retailers in the United States with more than 50 million monthly visitors on their websites would launch their own retail media networks to tap on the massive opportunity this channel brings in the changing marketing landscape.

Many retailers are still trying to build their first-party data, which can aid them in predicting their customers’ shopping behavior, leading to higher ROI for the advertisers, for which they will pay.

Moreover, many retailers looking to build their retail media network would be tempted to start the process in-house. But this is a complex process and requires a lot of additional investments, which can prove to be a detrimental factor for the retailers. As a result, many experts believe that third-party providers give better flexibility to the retailers in setting up their retail media networks. While the retailer can focus on its core competency, providing top-notch customer service to its customers, third-party providers can help the marketplaces efficiently monetize their e-commerce website, app, and first-party data. One such platform is ArabyAds’ retail media platform Ritelo. Ritelo assists retailers and marketplaces in the MENA region by offering technology to build a custom retail marketing platform that can help them create a scalable brand-funded media business.

Furthermore, most retail media networks focus primarily on on-site monetization for several important reasons. It provides retailers with more control over the user experience, the shopper’s purchase intent is high when they are on the shopping website, and the flexibility it offers to personalize the content more to monetize the media. But retailers should look into building their site traffic through off-site advertising that connects with their on-site advertising. Off-site outreach will help retailers to expand their reach and drive new traffic.

On top of that, retailers need to embrace video content in a big way to propel their retail media. Top retailers like Amazon and Walmart are already betting big on video content from influencers and live commerce on their platforms.

In the post-Covid world, retail media will become one of the most favored advertising channels for brands due to various reasons like rapid acceleration in the e-commerce business, safety concerns about visiting offline stores, and strict data privacy and security issues coming to the forefront. Therefore, many retailers will build their retail media due to the additional and significant revenue stream it has opened for some players. But, the task is equally challenging, and attracting top dollars from the advertisers will be difficult if they don’t see real value in your offering.