Loading...

14 Dec 2024 13:28

Advertising & Marketing

Make no mistake. The time for retail media is now

Stuart Johnston, Global Commerce Director at Zenith, asks: with customers overwhelmingly turning to ecommerce to discover new products, not just purchase – how can brands ensure they are visible at the most crucial part of the journey?  This piece originally ran on Mediatel.

Admit it. Whether you are a brand manager, a marketer or a performance specialist, you have heard countless times since March about the “new normal”, the rapid shift in media consumption and that COVID-19 has accelerated consumer adoption of digital retailing channels. Duh!

In all seriousness, the statistics are compelling.

According to a recent Criteo study, over half (53%) of consumers globally discovered a new form of online shopping in the last few months over the lockdown period with online grocery being a top contributor; a whopping 80% of these shoppers state that their new behaviours are here to stay. Data recently released from Nielsen showed that UK grocery spend totalled £1.12bn in the four weeks ending 16th May, a year-on-year increase of 103%. It’s also not just the more digitally native Gen-Xers and Millennials favouring online retailing either; data published early August from eMarketer shows that 62.1% of US Baby Boomers will buy online this year.

Advertisers are taking note. The latest Zenith Advertising Expenditure Forecast suggests that digital advertising will account for 51% of global spend this year, growing to 55% in 2022, as brands shift focus in an attempt to follow consumers and lure spend in the intensified battleground of eCommerce.

Time for action

Whilst a proportion of consumer spend will undeniably return to physical retail in time, the inevitable mainstay of eCommerce in grocery and non-food retailing cannot be underestimated. With the role of eCommerce increasingly evolving to one of discovery and education as well as purchase, the time for brands to capitalise on this opportunity is now.

Despite the mass-funnelling of digital advertising budgets into the well-established disciplines of programmatic and paid social to drive acquisition and revenue, retail media is best-placed to underpin the shift to eCommerce. This is because its customer-facing inventory scattered throughout retailer-owned channels, such as in-search product placement or visibility within newsletters sits closest to conversion. Retail media was one of the fastest areas of digital advertising growth last year in the US, with retailers such as Walmart and Target setting up standalone business units with the sole objective of scaling monetised inventory across its entire customer-facing estate. I feel it almost unnecessary to write about Amazon’s colossus revenues of $14.1bn raised through its advertising sales in 2019, which accelerated at a phenomenal rate. Up 21% on the year, to be exact.

The case for retail media

Nicole Kivel, Regional Managing Director for Criteo, agrees that retail media is an essential component of a brand’s media mix, especially in light of COVID-19; “it will become ever more vital for brands to ensure product discoverability on the digital shelf to ensure online sales are maximised whilst in-store declines.

COVID-19 demonstrated the fundamental need for brands to diversify their ability to reach the end-point consumer; those too heavily reliant on a single point of distribution suffered adverse consequences due to delivery cessations in markets or stock issues; with Amazon’s push into grocery this point will remain vital with ample diversification available for consumers and brands today.”

Inventory targeting in-market shoppers, elevating product visibility above competitor brands and the growing world of private label, closest to the point of conversion, gives advertisers a significant scalable edge.

The UK is behind – but there is opportunity

Whilst US retailers have evolved their offer to include self-service platforms, real-time access to digital performance data and the ability to test, learn and optimise at scale, the state of retail media is still somewhat nascent in the UK and Europe by contrast. Despite the likes of Amazon Advertising and Criteo’s Sponsored Products offering UK advertisers the level of audience targeting and capability they demand from more traditional publishers, most UK retailer solutions and internal politics still need time to mature at scale in order to achieve parity in transparency, data-sharing and technology infrastructure.

“Armed with their own DSPs, improved audiences, data access and analysis widely available, UK retailers could easily ride the wave of growth, as seen in the US,” adds Ben Taylor, Head of Omnichannel at Publicis Commerce.

Sizing the opportunity and inevitable rapid growth of retail media, customer data science firm Dunnhumby calculated an unrealised potential worth £1.7bn for UK grocery retailers. With retailers succumbing to intensified margins, it is only a matter of time before UK retailers begin to lean on monetising traffic and developing inventory to sell at scale. You can be sure that brands are already testing buying methods and different inventory types and those doing so will ultimately win in the long term as retail media scales at pace.

What should UK and EMEA brands do?

First and foremost, brands operating throughout the UK and the wider EMEA region need to quickly understand how their customer habits have evolved over the course of COVID-19, the retail landscape they operate within and the types and strengths of retail media inventory readily available for activation. Whether activating Amazon’s advanced advertising solutions, leaning on retail-media networks to utilise third-party inventory or buying direct from retailers themselves, a world of media options exist for brands within the grocery or non-food space. The ultimate key to retail media success is activating the most efficient inventory where the most relevant and engaged audiences exist.

Brands need to identify their customers, find retailers of choice and open media mix budgets to trial elevating their products and influencing customers at the optimal time of their journey. An iterative approach, leaning on a test and learn mentality is often the best way to find out what works, before scaling for results.

Brands will also inevitably face internal challenges with converging trade and marketing priorities and budgets, notwithstanding difficulties in measurement and media planning. This is where a media agency can help make the most impact, aside from bringing fresh eyes to traditional retailer-to-brand commercial relationships.

If you’re a brand, it’s almost a given that the competitors will already be activating retail media to some extent; not engaging now puts your share of the digital shelf at risk. In order to win in the world of digital commerce and the infinite shelf, you need to be visible. Make no mistake, the time for retail media is now. As my former manager Cassandra Stevens used to say, “if you aren’t on the digital shelf today, you won’t be in the basket of tomorrow.”

 

Written by Stuart Johnston,Global Commerce Director, Zenith

NULL
(Visited 4 times, 1 visits today)
Top