In today’s digital age, retailers are expanding their reach and diversifying their revenue streams by launching their own retail media networks. By doing so, they are creating a new advertising platform that allows advertisers to access first-party data and reach more specialized audiences. This guide will provide you with a complete understanding of retail media networks, including their advantages for retailers, why retailers have launched them, how to build a strong retail media network, and major retailers with successful retail media networks. Let’s dive in.
What is a Retail Media Network?
A retail media network refers to an advertising service offered by retail brands, which allows third-party brands to advertise on the retailer’s website. Through this service, advertisers can make use of the retailer’s first-party data to streamline their targeting and get their brand and products in front of the right shoppers.
The Advantages of Retail Media Networks for Retailers
The biggest advantage of retail media networks for retailers is that they create a new revenue stream. In fact, retailers garnered an estimated $88 billion in revenue in 2021 and $101 billion in 2022 from retail media networks. Compared with other types of advertising, retail media promises access to an unprecedented level of data both for targeting campaigns and measuring their success. But transforming that vision into reality requires overcoming a series of unique hurdles.
Why Retailers Have Launched Retail Media Networks
The Evolution of Retail Media Networks
Retail media isn’t a new concept – promotions such as those you might see in a grocery store have been translated into new online formats representing big business opportunities for brands. Retail media networks have evolved to offer a trove of first-party data to help target offers and reach new audiences and enhance every stage of the buying journey.
Leveraging First-Party Data
In theory, retail media networks offer a treasure trove of first-party data to help target offers, but brands should investigate what specific types of data are on offer. Do retailers leverage data from stores to inform their ad ecosystem? How do they integrate social media and search intent signals with their first-party customer data? By leveraging this data, retailers can improve their targeting capabilities and increase their advertising revenue.
Keeping Brand Partners Invested
Multiple entities contribute to the growing popularity of retail media, and each partner can potentially reap positive outcomes. Retailers need to keep their brand partners invested in the network by providing them with valuable insights and data to improve their advertising efforts.
How to Build a Strong Retail Media Network
Starting with On-Site Retail Media Offering
Retailers can start building their retail media network by offering on-site retail media services. These services can give advertisers access to first-party data and allow them to reach more specialized audiences. Retailers need to collect relevant data and find reliable data clean rooms to make the most of their first-party data.
Best Practices for Retailers to Consider
Refining Your RMN Strategy
Retailers need to refine their retail media network strategy to ensure that it aligns with their business goals. This includes finding the right balance between traffic scale and niche relevance, optimizing ad formats and channels, and tracking and reporting on campaign performance.
Keeping Pace with the Digital Landscape
Retail media networks are constantly evolving, and retailers need to keep pace with the latest trends and technologies to remain competitive. This includes investing in data, talent, and technology to maximize ROI in record time.
Major Retailers with Successful Retail Media Networks
Walmart is one of the best-known providers of retail media networks. Its platform, Walmart Connect, offers advertisers access to first-party data and allows them to reach more specialized audiences. Walmart has leveraged its vast network of stores to collect valuable data that can be used to improve targeting capabilities.
Target’s retail media network, Roundel, is a self-service platform that offers advertisers access to first-party data and allows them to reach more specialized audiences. Target has also partnered with other retailers to expand its reach and provide more value to its brand partners.
CVS’s retail media network, CVS Media Exchange (CMX), offers advertisers access to first-party data and allows them to reach more specialized audiences. By leveraging its pharmacy and health-focused customer base, CVS can provide valuable insights to advertisers in the health and wellness industry.
Kroger’s retail media network, Kroger Precision Marketing (KPM), enables advertisers to access first-party data from its grocery-focused customer base. This helps brands target shoppers with more relevant and personalized ads, driving better results and higher ROI.
How can Small-to-Medium-Sized Retailers Remain Competitive?
While large retailers like Walmart and Target dominate the retail media landscape, smaller retailers can still compete by implementing similar strategies to launch their own retail media networks. By leveraging their unique customer base and niche expertise, small-to-medium-sized retailers can offer advertisers valuable targeting options not found on larger platforms.
Retail media networks have emerged as a powerful advertising platform for retailers, offering new revenue streams and improved targeting capabilities. As more retailers launch their own networks, advertisers can benefit from the increased access to first-party data and specialized audiences. To succeed in this competitive landscape, retailers need to invest in data, talent, and technology, and continually refine their RMN strategies to keep pace with the rapidly evolving digital landscape.