The future of Retail: Explore the untapped potential of retail media
Amazon, Walmart, Target and Tesco have paved the way on a global level, and the number of those retailers taking the steps to leverage their digital platforms, ad generating, advertising revenue is growing by the day. And whilst the global giants are taking advantage and rushing to take a piece of this $ 100 billion market , local players are staying behind and missing out on the opportunity.
Now is the time for them to consider how to ride the wave! With growth in core retailing activity having become a challenge, Retail Media represent a solid proposition for Retailers to create new revenue lines and most importantly some with profitability margins of over 50%. Recent studies point to the finding that the leading retailers could boost their revenue by 2% to 3% by expanding their retail media offerings. A number which is validated already by those retailers who’re early movers in the Retail Media game.
Retailers are already feeling the urgency to find new sources of revenue and profit since traditional buying and selling methods have limited growth. With shrinking margins, it is no surprise that recent research points to the fact that almost half of the industry’s profits may come from nontraditional sources like marketplaces, advertising, and financial services. The time for securing a strong foothold in the retail media frontier is now as the advertisers’ appetite for effective digital media is getting stronger by the day.
Advertisers are shifting their marketing dollars away from traditional media channels and towards digital platforms, trade promotions, and cooperative spending. Retail media is already emerging as a major advertising option and is outgrowing all other digital channels on year-on-year growth, expected to reach 20% of total digital spend by 2024 in mature markets.
Stricter consumer privacy regulations imposed by governments and tech companies are making it challenging for marketers to connect with customers in a personalized manner and grab their attention in a competitive market. To address this gap, retail media enables retailers to utilize their own first-party data and monitor customer purchases triggered by advertising.
The retailers to create a compelling media offering, collaborate with brands on the KPIs that matter to them, and provide reporting and data that prove ROI, will benefit the most from this shift.
WHERE TO START:
Taking the steps to develop an effective Retail Media engine is a staged process. The initial set-up phase can set retailers up for long-term success and scaled retail media revenues. The required building blocks are:
- Strategy: To succeed, retailers should create a plan that outlines clear steps on how they will build their retail media proposition. The building blocks include the creation of scalable advertising solutions/formats, determining commercial structures and pricing and making sure that the offering caters to brands needs for efficiency and ROI. An effective strategy should incorporate a detailed blueprint that addresses the team, the technology, the processes and workflows and outlines a clear plan for growth and addresses how a retailer can take their fair share of the retail media opportunity.
- Organization: Assembling a team with media and agency experience, and granting them autonomy, is the first step to take. However, to be able to scale efforts retailers will need to get access to a wider set of skills to help them on jobs from campaigns execution to evaluating their media offering in ways that help them maximize the revenue from marketing plans or design new advertising formats that attract incremental budgets. For that to happen effectively, retailers will need to fill in the internal gaps by sourcing the right partners. Only fully transparent, modular, mix-and-match types of collaboration schemes will guarantee success in the long run. Lastly, effective workflows between retailers, suppliers, and partners will need to be in place.
- Technology & Data: Technology is needed for scale. In addition to the tech-platforms capabilities, Retailers should diligently plan the technical implementation, considering costs, timeframe, risks, advantages and disadvantages. They should consider having an infrastructure that can be used through managed services/campaign operations or in self-serve models by brands and agencies. Lastly, Retailers should consider how they enhance the stack, plug it with existing systems, design for future-proof schemes that cut off the complexity and just perform!
At Tailwind, we’ve developed a practice that can support with all that! Since 2013 we have been working with retailers to support them in launching some of the first retail media propositions in EMEA. We have helped with the establishment of the first regional retailer networks by powering them up with efficiency and technology. We work with retailers across all the key verticals: we’re trusted by a globally leading grocery retailer in the world on one of the pilot local implementations, we are supporting a leading technology retailer enhance their technology. We understand the global trends and help local retailers be part of the wave.
What does this mean for you as a Retailer? NUMBERS FIRST!
To begin with, seize the opportunity and see what you’ve been missing out on!
Reach out for a free Retail Media audit!