Although it has been around for many years, in recent months it has become increasingly relevant and has been boosted and exploited as a new source of revenue. This growth is driven by the new digital era, which increasingly demands that companies implement new strategies that stimulate profitable business models with accelerated growth.
Before we get ahead of ourselves in Retail Media, it is important to understand what a retailer is. A retailer is a company that sells products or services to the end consumer. The best known retailers in the Spanish market are: Amazon, Carrefour, El Corte Inglés, Zara… among others. Depending on how their business is developed, we can differentiate between two types of retailers. According to their distribution model, where we find the pure players that are Retailers that develop their business exclusively online. And clicks & bricks, who have an online and offline business. Furthermore, depending on how their operation is developed, we can distinguish between proprietary businesses that are 100% integrated and marketplaces that include their own business and that of third parties.
Now that we know what a retailer is, we can take a closer look at how retail media works, a trend that is unknown to many.
What is Retail Media?
Retail Media is a marketing strategy that aims to enable retailers to leverage their digital spaces to monetise them. This means that brands include their ads on the retailers’ websites or mobile applications, becoming another means of communication for the brands. This means that brands can directly reach their target audience at the right time and closer to the purchase.
In essence, retailers and brands have resorted to this form of monetisation to take advantage of their spaces, maximising their collaboration in favour of increased sales.
Within this market strategy, we can distinguish two main types of advertising products:
- Retail On Site: this is the advertising that appears within the ecommerce. Tools such as banner ads, featured product ads, search ads and product recommendations can be used to promote products and services to users visiting the website. They use formats very similar to traditional online banner ads and are often placed on pages with high visibility such as the homepage.
- Retail Off Site: this is advertising that is located outside the website. By this I mean social media ads, email marketing, push notifications, search ads and advertising on third party websites.
Advantages of Retail Media
Surely at this point you can already think of many of the advantages of this strategy, both for retailers and for brands and end customers. Let’s discuss them below.
For retailers, Retail Media can be an additional source of revenue. By allowing brands to place ads on their sales channels, they generate more visibility and, in turn, drive sales, also increasing the average ticket. In addition, retailers always have control of all the ads that are served and can target users by running campaigns where the user is shown what they are really interested in.
For brands, retail media can be an effective way to reach their target audience at the right time. By placing ads on retailer’s sales channels, brands can directly reach the customers who are most likely to buy their products, thus increasing their visibility and audience. In addition, the execution of campaigns does not rely on third party cookie data but on the retailer and are generated in secure spaces that maintain brand equity.
Last but not least, it provides the customer with a native and personalised advertising experience that does not interrupt their browsing, but accompanies them. In a context of advertising saturation, this is an aspect to take into account.
Why rely on a retail media strategy?
There are many scalability models for digital or hybrid businesses, but there are few where retailers, brands and consumers win. The case of Retail Media is true, as it is an evolution of the traditional market, based on a ‘win-win-win’ relationship. On the one hand, it allows retailers to generate a new revenue stream. On the other hand, it gives customers the opportunity to receive more relevant, personalised and less intrusive advertising, and finally, it allows brands to achieve greater reach, higher ROI and diversify their advertising, gaining efficiency with qualified traffic.
In short, there are more and more signs that Retail Media is going to be a great revolution that has only just begun. Its rise is closely linked to the environment in which we find ourselves. The preference of First-Party cookies, the increase in digital investment, changes in consumer habits and the arrival of technologies such as artificial intelligence are just some of the keys that help us understand why Retail Media is so present and its future so promising.
