State of retail media
Retail media is at the cusp of a transformative journey. In recent years, it has undergone substantial evolution, fueled by changing consumer behavior and the digital revolution. The COVID-19 pandemic further accelerated the shift towards online shopping, with online sales now accounting for a staggering 20.3% of all retail transactions.
This surge in digital consumerism is not just reshaping the way we shop but also influencing how retailers gather first-party data. This data treasure trove offers immense potential for enhancing the shopper experience. Retail media bridges the gap, allowing retailers to harness their first-party data and collaborate with brands, transforming themselves into media companies. The result? A seamless partnership where retailers empower brands to create demand for their products.
This partnership doesn't just stop at the digital realm. It extends to the in-store experience, allowing brands to connect with consumers through sponsored products, whether it's on the retailer's website, billboards, or in-store radio stations. Brands that don't traditionally sell directly to consumers now have the ability to reach customers right at the point of purchase, opening new horizons for consumer engagement.
Drivers for change
The foundation of this evolving landscape has been significantly dependent on third-party cookies and identifiers like Mobile Advertising ID (MAID). However, these pillars are crumbling, and their decline poses a considerable challenge for brands. As these data collection methods fade into obsolescence, brands risk losing a significant chunk of their customer knowledge.
Furthermore, the customer journey is increasingly complex, making it crucial for brands, especially consumer packaged goods (CPG) companies, to seek additional sources of information beyond what retailers offer. Yet, this shift towards optimization demands unprecedented collaboration among brands, retailers, media owners, and data providers. Such a partnership, while promising, encounters challenges related to data privacy, security, and trust, often associated with traditional data sharing and centralization platforms.
Retail media networks are the solution to these challenges. They are evolving to encompass multiple parties, utilizing technology specifically designed for first-party data collaboration. This technology places a premium on privacy and data security, ensuring a future-proof approach for brands, retailers, and consumers.
What is a retail media network?
A retail media network unlocks the power of first-party data by fostering collaboration among brands, data providers, media owners, and retailers. This alliance facilitates classic retail media use cases and opens up new opportunities to enhance the customer experience through first-party data. Collaboration can take various forms:
- Internal Collaboration: Retailers unify insights across different first-party data sources, including websites, apps, in-store data, and multiple brands sold under one company.
- One-to-One Partnership: Retailers and brands engage via data clean room solutions to activate owned media.
- One-to-Many Collaboration: Brands and retailers partner with media owners and intermediaries for off-site activation.
- Co-op: Retailers orchestrate a solution that brings together brands, data owners, intermediaries, and multiple media owners.
Key retail media use cases
- Shopper Marketing: This owned media activation enables brands to onboard their first-party data and target shoppers across the retailer's channels, enhancing relevance and engagement.
- Off-Site Activation: Brands and retailers collaborate closely to reach their target audience through various channels, leveraging the data held by media owners. Data clean rooms play a pivotal role in securing this sensitive data.
- Measurement: As the shopping journey combines online and in-store experiences, closed-loop measurement becomes essential. Retail media networks enable retailers to offer brands valuable insights into campaign effectiveness, bridging the gap between in-store and online outcomes.
- Second-Party Data Planning: Brands with limited first-party data can enrich their customer intelligence by safely tapping into knowledge held by retailers, media owners, and other data providers. This empowers brands to create custom audience segments based on their needs.
Download our full ebook to learn more about each of these opportunities, with real-world examples.
The role of data clean rooms
Retail media networks rely on data clean rooms to foster collaboration while maintaining privacy and security. Traditional data technology solutions require the sharing and centralizing of data, raising concerns about commercial trust, consumer privacy, and data security.
Data clean rooms provide a protected environment where companies can connect their first-party data for targeting and measurement while retaining control and ownership. They address the challenges posed by the deprecation of third-party cookies, regulatory restrictions, consumer privacy, and the rise of media silos.
- Commercial trust: The centralization and commingling of data require each party to sacrifice control of their data and trust not only each other but also a third-party provider with one of their most valuable assets, data.
- Consumer privacy: While consumers have given consent for their data to be collected by the individual company, they may not have given consent for it to be shared with other companies.
- Data security: Data in transit is at risk of leakage, and vast amounts of data stored in a single location, such as a data warehouse or data lake, create a honeypot for potential hackers.
Retail media powered by InfoSum
The future of retail media is a story of collaboration and data-driven innovation. Retail media networks powered by secure data clean rooms are the engines driving this transformation. By fostering alliances among brands, media owners, data providers, and retailers, they unlock the true potential of first-party data, reshaping the retail landscape and creating value for all stakeholders.
To discover how to unlock the full potential of your retail media journey, download our comprehensive ebook, Powering the Next Generation of Retail Media Networks.