Retail media is poised to make millions for retail brands with Boston Consulting Group forecasting the global market will grow to $US100 billion over the next five years, gobbling up 25 per cent of total digital media spend. This represents an incredible opportunity for retailers, especially the ones that set themselves up for success.
SO WHAT SKILLS AND INFRASTRUCTURE DO YOU NEED TO TAKE UP THIS OPPORTUNITY AND WHAT ARE THE TABLE STAKES REQUIREMENTS?
Like any strong advertising business, you need to have a compelling media proposition. For retailers, this means having suppliers and partners you already have a pre-existing relationship with who are attracted to your audience and environments.
To be successful, you need an understanding of first-party data. Retail brands are sitting on mountains of the stuff making it a highly valuable asset when it comes to selling your media inventory and ensuring relevance to customers. This information will provide insights and supercharge campaigns.
Retail Media is now a $180 billion AUD global opportunity for 2023
You’re going to require data analytics teams to segment this data. If you’re a multiplatform retailer, to support this valuable piece of the puzzle, a Customer Data Platform (CDP) will be a good idea. This can help you to understand the data you’re sitting on across all your channels and make it secure and easily available. If you don’t have a CDP, don’t be deterred. It’s not a disqualifier from entering the retail media space.
ENGAGE AND EMPOWER YOUR MERCH TEAMS
The next piece is understanding how your merch teams work with brands. To have a truly robust retail media offering, conduct an audit of the assets that you are making available to your supply partners. What are the ways they are being accessed? And how can you build out best-in-class advertising products across your whole ecosystem including your website, apps, EDMs, social channels as well as in-store experiences such as digital displays and instore radio.
While the data team will be the ones you call on to show the proof in the pudding – i.e. the audience you attract on each of these channels and the insights they provide – your merch teams need to be across the nuances of the opportunities and adopt a strategic sales approach and be provided with the necessary support and training. Many retailers, until now, have been giving spots away as value adds or to sweeten deals. Knowing what this inventory is really worth, and selling it accordingly, is vital to ensure you’re maximising the revenue opportunity.
Once you have your data and merch teams at the ready, the marketing and e-commerce or web teams need to come to the table. Together these divisions control your customer journey and where advertising sits within the ecosystem. They are key to shoring up your retail media offering. The customer experience needs to align with where ads are served or there will be a disconnect. This could have a negative flow-on to the ways customers interact with your brand in digital channels so you can’t afford to skip this step.
Additionally you will need resource that is able to sell your proposition into brands and agencies and can work to enhance and support the trade activity as this is where a large percentage of supplier and partner budgets reside.
Having these teams talk to each other is crucial. I’d go one step further to setting up a retail media team with a dedicated representative from each of the various departments.
GET BUY IN AT THE TOP
In my view, the most important person to have on board is a senior executive to champion the project. Without that, the solution won’t get enough traction to lift off.
If you look at the most successful examples of retail media so far, there’s always buy-in at the top. Amazon, Walmart and closer-to-home Woolworths have shown us what’s possible if the organisation has the right teams in place and an internal champion.
In the case of Woolworths, the CEO was instrumental in establishing Cartology, the brand’s retail media offering. There is also a need for upskilling, change management and governance to consider. Without executive buy-in, none of this will be possible.
OUTSOURCE TO SUPPORT YOUR IN-HOUSE CAPABILITIES
Of course, there are some parts of the chain you can outsource. While retailers would be smart to keep their data assets in-house, sales and tech support can be provided by third parties.
A good tech platform will offer you the external support you need. But anyone that is close to the brand and the assets should remain in-house. Once these teams truly understand the value of your inventory, that will be a highly valuable asset in and of itself.
Retail media is set to shake up the digital advertising landscape and retail brands that capitalise on this sooner rather than later will reap the most rewards. The reality is supplier brands may well see the value before retailers do because they are already actively looking for better ways to reach their end customer, fuelled by first-party data.
Make no mistake, now’s the time to get your teams ready.
