Rise of Retail Media 

Retail media has emerged as the trade marketing of the digital age. It is pioneered by pure players, and its growth is supported by the sustained development of ecommerce at levels of 15–25% per annum. A shift in consumer behaviour from product search in traditional search engines to searches in retail channels sup­ports the system, and the ongoing collection of monetizable user data is nurturing this emerging advertising system.

Retail media is the third wave of digital marketing. In the triopoly of digital advertising, Amazon Ads, the leader of retail media, is catching up on Meta (Facebook) and Google. We track this evolution in blog posts on Innovell.com. Retail media is challenging search advertising and social ads, leveraging audience data and using similar auction models to that of their peers. This is a strong revenue driver as the advertising channel grows further.

The Retail Media Ecosystem in Europe

The retail media ecosystem resides in the space between consumers and brands. Where it was traditionally occupied solely by retailers, the online dimension is now occupied by a system of on- and offline retailers, marketplaces, ad tech and agencies.

The European landscape of marketplaces is a mix of large international pure players and local pure players, vertical marketplaces, and click-and-bricks. Amazon is the pioneering online marketplace and also pos­sesses the biggest and preferred retail advertising solution. The top players vary from country to country; however, they all share the common characteristic of being retail media enabled via more or less advanced solutions and, for the most part, provided by ad tech operators such as Criteo Retail Media or CitrusAd.

The strong growth of ecommerce and the focus on the commercial offering has allowed retail media to enjoy a high level of awareness. It is, however, deemed to exhibit a low level of maturity, having emerged recently and only just begun to enter a growth phase. Growth will be stimulated by more retailers launching marketplaces and further investment in ad tech from pure players and ad tech operators. The shift from untrackable trade marketing to optimisable retail media will further stimulate this shift.

Retail networks and visionary marketplaces are providing omnichannel solutions targeting more complete coverage of the user journey and differentiated positioning. Ad tech operators are adopting a ‘platformisa­tion’ strategy, which involves connecting retail media assets across markets to increase the accessibility of the offering to brands. These movements are all testaments to an extremely dynamic landscape with many moving parts, which can be difficult for brands to navigate.

The Place for Brands in Retail Media

Brands invest in retail media to generate further profitable sales, gain consumer insights that they are oth­erwise distant from, and develop a top-of-mind awareness of their products. Brands encounter numerous obstacles when entering the space. They must position themselves in each marketplace in terms of brand fit, product assortment and pricing. Uncontrolled distribution and pricing policies can create cannibalisation between channels and affect profitability. For control and to pilot retail media, brands face complex track­ing and measurement challenges, especially when incorporating offline activities into the scope. This is the notable reason for trade marketing to be increasingly absorbed by retail media activities.

From an organisation’s standpoint, brands evolve organically to ascertain the appropriate organisation of commerce and marketing around a retail media initiative. However, even when a fluid organisation is im­plemented, it can be a challenge to market successfully to users in the retail channels along the entire user journey and not just at the conversion point.

A final hurdle for a broad retail media deployment is the fragmentation of the landscape: different technol­ogies, different economic models, and different formats.

To address these challenges and aim for success in retail media, we propose a plan consisting of five steps for brands: put retail media in the org chart, build the go-to-market mix, line up the digital assets, connect the data dots, and accelerate with advertising.

The Retail Media Future

We explore some of the most significant trends in the business area and propose a perspective trajectory for its potential transformation in the coming years.

What will take retail media to maturity? How will the commercial offering become more accessible to brands? Will retail media jump onto the social commerce trend and become a brand-building opportunity? Finally, what will be the horizon for integrating retail media with other programmatic advertising, and will it transpire?

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