Retail Media is the distribution of advertisements by a brand on retailers’ online sales sites or applications, aimed at influencing customers’ purchasing decisions at the crucial moment of purchase. This approach is very popular among various brands, as it significantly increases their visibility to a wide audience.
Over the years, it has continued to develop with the arrival of new technologies. That’s why there are now two types of retail media: digital and physical. Digital retail media is often referred to as E-retail media.
Today, knowing and mastering retail media is no longer an option, but a major asset for brands. This is especially true for companies seeking to differentiate themselves in saturated markets and boost their online sales.
At Impulse Analytics, an e-commerce agency, we’re used to helping e-commerce players and other businesses with their retail media strategy. Our main objective is to boost the performance of their advertising campaigns.
Our article is designed to equip you with all the essential knowledge about retail media. Discover with us how it works, its advantages and its challenges. We’ll also look at the steps you need to take to get started with this approach and accelerate your company’s growth.
Definition of Retail Media
Retail media refers to a form of advertising where ads are placed directly on the consumer’s shopping journey.
The aim is to bring users to an action. In other words, these ads are used to generate more sales with a higher probability of success. What’s more, this advertising approach can be used to meet various marketing objectives, such as brand awareness, loyalty or drive-to-store.
Retail media includes two main approaches:
- In-store retail media: This method involves the use of physical advertising at points of sale. It’s possible to display ads at various points of contact with consumers. For example, they can see ads when they scan products in-store.
- Retail media digital, or e-retail media: This strategy involves running ads on the e-commerce platforms of retailers who use this sales model. In most cases, this system is based on bidding for advertising space.
Digital retail media isn’t just about ad placement. E-retail media is an integrated strategy that uses consumer browsing and purchase data to display highly relevant ads at the best possible time.
At the heart of this concept is the strategic use of rich, detailed data. This data enables advertisers to target consumers with remarkable precision. They can select audiences based on what they’ve purchased. But they can also do so based on their browsing behavior on platforms. This level of targeting makes it possible to create advertising campaigns that are seen. But above all, they help to drive action.
How Retail Media works?
To fully understand how retail media works, we suggest you discover the types of platforms available and the targeting mechanisms they employ. This makes it possible to optimize advertising campaigns according to consumer behavior and preferences.
Types of Retail Media platforms
- Retailers’ in-house platforms: Retailers directly manage these platforms themselves. They use their own websites to offer advertising space. A typical example is a department store website where brands can buy space to promote their products. These platforms take advantage of the controlled environment to display relevant ads that match the consumer’s shopping experience.
- Specialized external networks: Unlike in-house platforms, these networks operate across multiple e-commerce sites, not just a single retailer. They enable ads to reach a wider, more diverse audience. What’s more, these providers offer extended reach across diverse markets and niches. These networks collect and analyze data from multiple sources to create ultra-targeted campaigns.
Ad targeting process
Ad targeting in retail media is sophisticated, using advanced data to reach consumers in the most effective way possible. Here’s how it works:
- Data collection: Retail media platforms collect data from various consumer interactions with the site, such as browsing histories, previous purchases, and searches performed. This data is then analyzed to understand user preferences and behaviors.
- Audience segmentation: Based on this data, consumers are segmented into different target groups according to specific criteria. For example, criteria include age, location, interests and purchasing habits. This segmentation helps to personalize advertising messages so that they better resonate with each group.
- Precise targeting: Ads are then targeted to appear to consumers who are most likely to be interested in the product. This is made possible by algorithms that predict user behavior and optimize ad timing and placement. The aim is to maximize engagement and conversion.
Retail Media ad forms and locations
Those ads take many forms and appear in a multitude of strategic locations to maximize their impact. For example, a retail media ad can be both display and native. Understanding their appearance and placement will help you better appreciate how they can serve your business objectives.
Ad formats
- Sponsored products: These ads are often the most visible. They appear as highlighted products on e-commerce sites. Similar to ordinary search results, these products are labelled “sponsored” to indicate their promotion. Their careful design aims to integrate naturally into the browsing experience, making them less intrusive and more effective in terms of clicks.
- Banner ads: Banners can vary in size and design, from simple static images to more complex animations. They are positioned in strategic locations on sites, such as headers, sides or footers, attracting attention while complementing the user experience without dominating it.
- Video ads: Used mainly on advanced retail media platforms, video ads offer a more immersive experience. They can be launched automatically when a user reaches a certain part of the page or after a specific interaction, such as hovering over a product.
Ad placement
- On e-commerce platforms: The majority of retail media ads appear directly on the e-commerce platforms where consumers come to shop. This includes placements on category pages, product pages, or even search results pages, where ads can be inserted among natural product listings.
- In mobile applications: With the rise of mobile shopping, retail media ads are also finding their way into mobile applications dedicated to commerce. They can appear as pop-ups, interstitial pages or integrated into product flows.
- At the point of sale: As part of in-store retail media, ads may appear on digital screens located at strategic points in the store, such as entrances, specific departments, or near checkouts. Stores often synchronize these ads with ongoing promotions or special events.
Advantages of Retail Media
Retail media offers a host of advantages for companies of all sizes and in all sectors.
Increased product visibility
One of the primary benefits of retail media is increased product visibility. Ads on e-commerce platforms are placed where consumers are already in purchase mode. This means that interested parties come across these sponsored products at the best possible times. This visibility is crucial in a digital environment where getting consumers’ attention can be a major challenge.
Consumer engagement
Retail media enables direct interaction with consumers through relevant ads that align with their interests and buying behaviors. By presenting products that meet their needs, or awakening interest in new offers, brands can significantly increase engagement. This enhanced engagement is often synonymous with a better user experience, leading to increased customer loyalty and a higher likelihood of conversions.
Effective conversion and measurable ROI
Because retail media campaigns are highly targeted and located on platforms where consumers are ready to buy, conversion rates tend to be higher compared to other forms of digital advertising. What’s more, thanks to advanced tracking technologies, brands can track precisely which ads lead to sales, offering a clear measure of return on investment (ROI). This ability to measure and analyze performance enables companies to continuously optimize their campaigns for better results.
Real-time optimization
The world of e-commerce evolves rapidly, and the ability to react in real time is invaluable. Retail media offers this through platforms that adjust advertising campaigns based on consumer behavior in real time. If a certain approach or a specific product isn’t performing as expected, algorithms can immediately adjust ad displays to test new strategies or products more aligned with user preferences.
Access to rich data and insights
Finally, retail media provides access to an incredible amount of data on consumer behavior. This data is not only valuable for advertising, but can also inform other aspects of business strategy, from inventory management to product range optimization. Insights from retail media campaigns can reveal consumer trends, product preferences and market opportunities that would otherwise remain hidden.
Launching your Retail Media campaign
Step 1: Assess your needs and objectives
Take a moment to clearly define what you want to achieve. Do you want to increase brand awareness, promote a new product, or perhaps improve conversion rates? Your objectives will dictate not only the type of campaigns you should launch, but also the platforms you should use. Make sure these objectives are specific, measurable, achievable, relevant and time-bound (SMART).
Step 2: Choosing the Retail Media platform
The choice of platform is crucial, as each retail media platform has its own strengths and particularities. Some platforms may be better suited to consumer staples, while others may better serve niche or luxury products. Take into account your target customers’ demographics and buying habits to select the platform that will maximize your visibility to the right audience.
Step 3: Content creation and ad targeting
Your ad content should be both engaging and relevant to your target audience. Use high-quality images, attractive product descriptions and clear calls to action. Targeting is also crucial: leverage available data to target users who have shown an interest in similar products, or who are within the demographic of your target market. The more precise your targeting, the more favorable the response to your ads.
Step 4: Campaign launch and follow-up
Once everything is in place, launch your campaign. But the work doesn’t stop there. Tracking is essential to understanding the effectiveness of your ads. Use the analytical tools provided by the platform to track the performance of your ads in terms of clicks, impressions, and conversions. Be ready to quickly adjust your strategy if certain aspects aren’t working as expected.
Step 5: Performance analysis and adjustments
After a while, analyze the data you’ve collected. Which ads performed best? Which messages resonated with your audience? Learn from these insights to refine your future campaigns. Don’t be afraid to test different approaches to see what works best for your brand.
Conclusion
Together, we’ve covered the essential contours of retail media, exploring how it works, its benefits, and how to start a campaign effectively. Remember, retail media isn’t just an advertising method. It’s a comprehensive strategy that can transform the way you engage your customers and boost your online sales. With the steps we’ve discussed, you can launch your campaigns that achieve your digital marketing objectives.
