How Retail Media Is Reshaping Retail
The retail environment is changing thanks to large companies that have led the way with retail media. Retail marketing is consumer marketing at or near the retailer’s point of purchase, or where there is a choice between competing brands or products. It can take place in-store or on any of the retailer's associated channels. In this way, a retail media network is an advertising business set up by the retailer, to allow advertisers to buy marketing space across the retailer’s properties. It also intersects with consumer data in order to connect with customers along the buyer’s journey and provide a more targeted advertising opportunity for the advertiser. So how do smaller retailers catch up with this trend in order to maximise opportunity, or risk losing out to early adaptors of this important trend?
The big opportunity behind retail media
Over the next 5 years, the retail media market will grow 25% per year and by 2026 will account for 25% of total digital media spend. The power of this channel is that the advertiser gets high visibility, with closed-loop measurement potential and the possibility of tying it back to omnichannel sales. While bigger retailers have already monetized their owned channels, many smaller retailers have also begun using their in-store and off-site channels to quickly get into the retail media market. The advantage of retail media is that it allows a brand to expand its reach beyond its own sites and channels. Further to this, brands can measure and monitor their performance and adjust their marketing spend and activity accordingly. With this in mind. all retailers need to devise a retail media offering that allows them to hold their proportional share of the historical trade, but also grow income by building their bottom lines with other income streams.
Retail media diversifies revenue
By having multiple retail media partnerships, retailers will be able to diversify their revenue streams. Here the plan is to ensure that there are multiple advertisers and partnerships in place. This will allow retailers to avoid relying on single-source incomes. It will also ensure their platforms talk to a wide range of audiences.
The importance of video
On online channels, to stand out from the crowd, retailers need to provide more engaging retail media formats like rich media and video adverts. Video is extremely effective with a 7,5 higher click-through rate than static adverts. The dynamic nature of video also empowers marketers to include lots of touchpoints across the whole funnel, which then maximizes the potential impact per ad unit.
The importance of first-party data
First-party data is a vital tool for advertisers to provide customers with a highly relevant and personalized experience. Retail media partnerships allow brands to access huge amounts of first-party data local to that retailer. Armed with this information, adverts can be customized according to these specific criteria, creating more effective adverts and bringing brands more value for money.
The bottom line
Retail media is changing the way retailers do business. Through online and in-store marketing channels, retailers are now increasing their revenue streams by providing in-store retail media channels to their brand partners. While fashion comes and goes, this trend isn’t going anywhere so it's vital that smaller retailers get on the retail media bandwagon, and watch their bottom lines grow. To fund your next retail media strategy, contact Merchant Capital today and fund your store in the next 48 hours.