The Rise of Retail Media
As more purchases move online, retailers are looking for new ways to engage customers and generate additional revenue streams. One strategy that has gained momentum in recent years is retail media networks. By opening their websites and apps to advertising, retailers can monetize the eyeballs they already have visiting their digital properties for shopping. Retail media networks allow advertisers to reach consumers in the crucial moments when they are browsing products and making purchase decisions.
The early adopters of retail media were large retailers with massive online audiences like Walmart, Target, and Kroger. They saw an opportunity to build advertising businesses by leveraging the traffic to their sites and mobile apps. Starting around 2015, these retailers began selling ad space in various placements throughout the shopping experience. Video ads could run before product pages loaded, for example, or search ads would appear alongside results. For advertisers, it was a chance to connect with customers in a highly relevant commercial setting.
Optimization and Expansion
As Retail Media Network has matured, the major players have optimized their offerings. Walmart spent billions acquiring Polar, Eko, and other tech companies to enhance its data and advertising capabilities. Their technology can now link purchases to specific ads, giving marketers detailed insights into return on investment. Target, meanwhile, refined its sales approach with specialist teams focused on various industries like CPG, finance, and automotive. This allows for deeper advisory services tailored to different advertiser needs.
Beyond the origins leaders, many other retailers have entered the space or expanded existing efforts. Dollar General launched a self-service platform for SMB advertisers in 2021. Smaller online merchants like Wayfair and Macy's opened their first-party data to help drive more effective campaigns. Grocery chains like Ahold Delhaize and Albertsons joined the fray as well. Even specialty retailers like AutoZone and Home Depot opened portions of their sites to advertising testing underway to prove out the opportunity.
As the market expands, retailers are forming alliances to achieve more scale. In Europe, Ahold Delhaize created an entity called Retail Media to aggregate its brands' audiences, which now includes over 20 million daily users. The coalition approach gives members access to a larger pool of demand while helping optimize technologies. In the US, Kroger struck a partnership that involved sharing its 84 million loyalty customers with Albertsons to boost targeting abilities for both.
New Features and Opportunities
The innovation continues as retail media networks explore fresh ways to engage customers and create value for advertisers. Livestream shopping events on platforms hosted by retailers like Ulta and Lowe's merge entertainment and transactions. Shoppable social media placements could see ads linking directly to purchase pages on Facebook and Instagram. AI/AR technologies may soon power try-before-you-buy virtual product trials and new forms of interactive brand experiences.
Monetizing first-party data through retail media also means retailers themselves can become customers. Many are using their own networks to promote private label brands, exclusive products, or drive traffic to certain categories. As Kroger demonstrates with its media arm KRG360, retailers may one day become full-service agencies or ad tech providers for other merchants as well.
Looking ahead, the continued rise of retail media networks holds massive implications for online shopping. Advertisers will gain efficient new channels aligned with the path to purchase. Retailers stand to create additional high-margin revenue streams from ad sales and gain valuable insights from campaigns. Most importantly, customers enjoy integrated brand messages, promotions, and experiences that feel native to the shopping journey. As commerce shifts increasingly to digital platforms, retail media will play a pivotal role in the future of online retail.
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Priya Pandey is a dynamic and passionate editor with over three years of expertise in content editing and proofreading. Holding a bachelor's degree in biotechnology, Priya has a knack for making the content engaging. Her diverse portfolio includes editing documents across different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. Priya's meticulous attention to detail and commitment to excellence make her an invaluable asset in the world of content creation and refinement.
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