Retail Media is here to stay. And everybody’s winning
Retailers now have the chance to generate an 80% profit margin in a notoriously low-margin industry, by monetizing online and in-store shopper audiences and media inventory like never before.
Brands and advertisers finally have the much-coveted chance to influence shoppers at the point of purchase with real-time contextual targeting and data-backed insights.
Advertisers have shown that they are up for it, with over $100 billion spent globally on Online Retail Media in 2022, which is headed for $160 billion by 2027. And this does not even include the potential of In-store Retail Media which is fast changing the Retail Media revenue equation, especially for grocery retailers. Our research shows it’s slated to reach $138 billion by 2027, thus bringing globally projected spending on omnichannel Retail Media close to $400 billion by 2027.
The Retail Media Opportunity – and Challenge – for grocery retailers
With ~80 percent of European grocery shoppers in-store today and well into the next decade, grocery retailers are in an enviable position to differentiate themselves and capture a good chunk of the incremental Retail Media budgets brands are creating.
While the initial growth of Retail Media was led by large e-commerce players, our research shows that sustained expansion is coming from smaller players with niche audiences and the expansion of In-store Retail Media opportunities.
The share of In-store Retail Media as a part of all Retail Media is growing steadily, from $58 billion (2022) to $138 billion (2027). This stable growth is being driven by FMCG brands and advertisers, 80% of whose shoppers are – and will remain – in-store.
Advertisers are looking for a new kind of Retail Media Network to help them meet their customers where they are. The problem is that current Retail Media offerings, mostly designed to reach online audiences, do not offer advertisers a way to target the 80% of shoppers in-store. This is an opportunity – as well as a challenge – for grocery retailers.
The Case for Omnichannel Retail Media Networks
While Online Retail Media brought grocery retailers early wins, those revenues are now flatlining. The temporary boost to online grocery shopping activity caused by the pandemic has reverted to normal levels as well.
As brands realize this, their budgets will start flowing to a different type of Retail Media Network. A more full-funnel omnichannel Retail Media Network leverages both online and in-store audiences. For brands, this means meeting their shoppers not only through their buying journey but also as close to the point of purchase as possible. For retailers, it means the power to monetize in-store media inventory as well as they are already doing with online media.
While all of this was already possible with online audiences, it was not with in-store audiences. That is changing.
Technology breakthroughs such as Advertima’s Audience AI, with computer vision technology, are making it possible to digitize in-store shoppers at par with online Retail Media, with capabilities such as:
- Identifying and enabling real-time contextual targeting to in-store audiences based on audience demographics, group constellations, and behavior at scale (reach);
- Full-funnel reach across multiple touchpoints on the shopper’s path to purchase;
- Audience engagement as close to the point of purchase as possible;
- Verifiable audience and campaign data to optimize ROAS;
- Low-complexity, friction-free execution across digital and physical channels.
Taking decisive action today to win FMCG Retail Media budgets
Grocery retailers who want to capture the massive Retail Media opportunity have to take decisive action today to stand out in an already crowded market.
The best path to offer advertisers something compelling and differentiated enough to win the big incremental Retail Media budgets is to digitize and monetize both- online and in-store audiences equally effectively.
A full-funnel, omnichannel Retail Media Network that offers advertisers access to digitized online and in-store audiences needs a certain level of maturity, in terms of the team, infrastructure, and technology capabilities.
Our latest playbook helps retailers perform an objective evaluation of their current level of Retail Media maturity, define concrete next steps to integrate in-store audiences into the omnichannel Retail Media Network, and amplify their revenues.
It’s time to set the ball rolling on your plan to capture sustained high-margin revenues over the next several years, as Retail Media continues to grow. How to Integrate In-Store Audience into Your Omnichannel Retail Media Network: A Playbook for Retailers, a must-read resource packed with actionable tips and next steps, is now available for download.
