4 Trends Shaping the World of Retail Media in 2023
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As the global e-commerce sector experiences significant growth, it's no surprise that consumer buying habits have shifted towards online retailers. This surge has paved the way for the rapid emergence of online retail media, capturing the attention of advertisers and brands at breakneck speeds. Based on the latest forecasts, retail media is predicted to make up 18% of global advertising spend by 2027. Using the US market as an example, where the retail media landscape is more mature, it has skyrocketed from $1 billion to $30 billion in US ad spend in just five years, surpassing the growth rates of social networks (11 years) and search advertising (at least 15 years). This remarkable development within the e-commerce landscape presents unparalleled opportunities for brands to maintain a competitive edge and thrive.
Here are our four retail media trends that brands should be aware of for 2023 and beyond.
1.Retail media is expanding to new marketplaces
Traditionally, retail media was predominantly associated with large e-commerce platforms, mainly synonymous with Amazon.com during the 2010s. However, with the shift in consumer behaviours favouring convenience, fast shipping, and product variety, retailers have been quick to respond to advertisers' demand by offering their precious Sponsored Ads placements to brands throughout the customer journey and across the digital shelf.
This expansion of available marketplaces now offers brands the ability to run highly targeted, brand-safe, and personalised advertising among retailers such as Sainsbury's, Tesco, ASDA, and Argos. It opens the opportunity to tap into diverse customer bases and engage with a wider range of potential shoppers. The ability to programmatically run ad campaigns across multiple marketplaces achieves greater efficiency and opportunities for ongoing ad campaign optimisations, delivering increased media buying efficiency and ROI. By harnessing the advertising capabilities of these new marketplaces, brands can enhance their visibility and connect with customers at various touch points throughout their shopping journey.
2.Retailer data is essential in today's online advertising
Ongoing changes in online privacy regulations and the forthcoming deprecation of Google's use of third-party cookies mean that having access to and activating first-party data is crucial for brands to deliver highly targeted advertising.
This leads us to one of the most significant advantages of retail media, which lies in its access to valuable first-party retailer data. Retailers possess extensive customer insights, including user demographic information, browsing behaviour, transactional data such as purchase history, and even engagement with advertising campaigns. Brands can leverage these data signals to deliver highly targeted and personalised advertising campaigns while gaining a deep understanding of their target audience and existing customer profiles, which can inform other non-retail media campaigns.
For example, brands can leverage retailers' first-party data to determine the ideal time to capture a customer's attention based on their stage in the buying journey. When a shopper has been exploring a specific shopping category but hasn't made a purchase yet, brands can step in with highly targeted ads showcasing products from that category, tempting the shopper to make the final step and complete the purchase.
3. Retail media offers both performance and brand marketing for brands
Traditionally, retail media has been perceived as a performance-focused strategy employed by advertisers to target a select group of customers in the final stages of their purchase journey. While this approach ensures high conversion rates, brands and retailers have started recognising the significance of establishing enduring brand and product awareness earlier in the customer journey. The goal is not only to reach a broader audience but also to attract new customers to their business, resulting in incremental sales and substantial growth.
Retail media presents a unique opportunity for brands to blend performance-driven and brand-focused marketing strategies. Leveraging the valuable first-party customer data provided by retailers, brands can engage with shoppers at various stages of their purchasing process, utilising different touchpoints and ad formats. From homepage display ads during the initial product discovery phase to sponsored product ad placements during the final purchase decision, brands can effectively target and interact with customers.
By investing in both brand building and performance-driven approaches, brands can establish a strong presence within their respective categories. This enables them to connect with new customers, fostering long-term loyalty and customer satisfaction. Such an approach acknowledges the importance of advertising throughout every stage of the customer journey, ultimately leading to increased brand visibility, wider reach, and substantial sales growth.
4.Retail media is here to stay
The rapid growth and remarkable success of retail media have firmly established it as a core pillar within advertisers' marketing mix. It has proven to be a highly impactful strategy for brands looking to drive growth and effectively connect with their target audience across multiple touchpoints.
Retailers themselves have also recognised the revenue potential within their digital real estate and the high value of first-party customer data at their disposal. As a result, they are investing heavily in developing and expanding their retail media offerings. According to a recent study by RetailMeNot, 83% of retailers have plans to increase their investment in retail media platforms in the next year, further more, according to IAB research over 96% of surveyed brands confirmed that their retail media programs achieved desired brand impact and highlights the business growth opportunity available when running retail media.
