Retail media is a form of advertising that helps brands capture attention when consumers are ready to buy. Typically, retail media is used by brands that sell their products with specific retailers within the host retailer’s site or app.
It is also increasingly appealing to marketers as it offers attribution capabilities that tie marketing spend to sales down to the product level. This is creating new opportunities for agencies to build partnerships with RMNs.
Reaching the Right People at the Right Time
Sales are the most obvious metric, but more is needed. Sales indicate that the products and services perform well but only tell part of the story. Increasing brand awareness and driving engagement are key metrics for measuring your marketing efforts success.
The COVID-19 pandemic accelerated the shift to online shopping that had already been occurring, and retail media is at the forefront of this trend. This type of advertising engages high-intent shoppers close to the point of purchase, helping brands drive visibility and sales.
A new retail media network is launched weekly, from Michael’s (arts and crafts supplies) to Nordstrom (department store). The key to these networks’ success is the strength of their consumer data and relationships. This enables them to close the loop between sales and marketing, delivering a powerful ROI for marketers. The ability to track sales in real time and see how they relate to specific ads helps marketers make informed budget decisions based on true ROI.
The first step to increasing sales and customer engagement is getting your product in front of the right people. And this is where retail media can shine. Using first-party data (data collected by the website owner, in this case, a retailer), ads can be personalized to each viewer based on their unique characteristics and attributes. A higher ROI is possible by providing a greater level of personalization.
Another way that retail media can help boost ROI is by providing closed-loop measurement and a clear sightline into the return on ad spend. This allows marketers to make better decisions and maximize the value of their ad budget.
Lastly, retail media networks can also offer various other benefits to their advertisers. These can include programmatic advertising, e-commerce development, and analytics and reporting. This can reduce costs, streamline e-commerce operations, and increase revenue. Unsurprisingly, many brands are now using retail media for their marketing requirements.
In marketing, customer engagement is crucial to the success of your product or service. Even if your offering is excellent, it may only achieve the desired impact with customer connection. You must establish an emotional bond with them to ensure that customers prefer your brand over competitors, benefit from it, return for more, and recommend it to others.
That connection starts with an authentic voice and meaningful communications and continues with ways for customers to interact through social media, email, your website, chatbots, or your store. It also means listening to customers’ feedback — whether they’re complaining about a bad experience or sharing a positive idea that could improve your business.
Retail media networks present an opportunity for brands that need more resources to build capabilities in-house to marry sales and marketing data. In addition to providing visibility and targeting, they can offer sales-based attribution that lets you connect your ad spend to e-commerce sales down to the SKU level. This can help you optimize campaigns and attach concrete value to partnerships with individual retail partners.
Retaining loyal customers is the most effective way to increase sales. Harvard Business Review states that acquiring a new customer can cost up to 25 times more than keeping an existing one. Increasing brand loyalty reduces attrition or churn, increases CLV, and drives repeat purchases.
Loyal customers tend to have a higher emotional engagement with a brand and are likelier to recommend it to others. A study by Qualtrics found that 80% of consumers will switch brands due to bad customer service experiences.
A retail media agency can help boost loyalty by assisting marketers in creating a value-based program. Retail brands can implement various loyalty programs to incentivize customers to continue making purchases. These programs can range from simple donations to charitable causes with each sale to complex reward systems that offer loyalty points with every purchase. Retail media can accurately track e-commerce sales down to the SKU level using first-party customer data. This provides brands with solid evidence to justify ongoing investment in their loyalty programs. This is a crucial role for retail media as it helps brands get the most from their marketing budgets.
A specialized retail media agency is the ideal partner to help brands drive sales. By targeting high-intent shoppers at the point of purchase, retail media campaigns can increase ad conversion rates and ultimately generate more revenue for brand marketers. Plus, with the ability to tie ad spend directly to e-commerce sales at the individual SKU level, retail media offers a compelling value proposition for brands looking to maximize return on investment.
When leveraging retail media for revenue generation, brands must look at the big picture and ensure that their advertising programs align with merchandisers’ and product managers’ priorities. This is where a team with strong people management skills will come in handy to help drive campaign strategy and ensure the right products are promoted in line with customer demands.
Retail media is a rapidly growing, high-margin advertising channel that’s creating urgency for companies of all sizes to enter the space and grow their market share. To succeed, top players must make a strategic marketing and communication plan to attract and retain more brands and position themselves as thought leader in the industry.
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