Where Retail Media is Heading in 2024

By Jessica Doulton, Head of Retail, OMG Transact UK

Retail media has been dominating headlines this year as brands lean into its many capabilities and potential to connect with consumers. Research revealed that £89.9bn was spent by advertisers on retail media last year, and if growth continues as expected, its estimated to be an almost $200bn industry by 2027.

As this form of media continues to grow – and we face the final quarter of the year – it’s the perfect time to predict how the fastest-growing advertising channel will progress and how marketers can keep up the pace.

A Push for Retail Media Transparency and Standardization

Retail Media has become a multibillion-dollar industry seemingly overnight, and without oversight or standardization from any industry body. This rapid and fragmented growth has resulted in varying levels of transparency, data availability and measurement models across the RMN landscape, leaving advertisers unable to determine the holistic impact of their investments. As the industry approaches critical mass, we’ve seen a growing need and desire from brands, agencies and retailers to have some form of standardization.

At OMG, we have expanded our Council for Accountability and Standards in Advertising (CASA) initiative to include a Retail Media branch, focused on pushing retailers for accountability and transparency. The IAB and MRC have formed a cross functional working group consisting of advertisers, retailers, RMN SaSS providers and advertising agencies to launch the IAB/MRC Retail Media Measurement Guidelines in the U.S. and have expanded this initiative to Latin America. And in the UK, OMG has partnered with ISBA and collaborated with leading brands, retailers, and technology partners, to establish a Framework for Responsible Retail Media, focused on driving standardization.

Complete standardization is a long way off as there is a high level of nuance based on the core Retail business. Advertiser expectations need to be managed however, with increased pressure from the industry for retailers and RMNs to progress in this area, we can expect to see meaningful improvements in both transparency and standardization emerging in the coming months.

Retail Media as a Full Funnel Marketing Opportunity

In 2023, we saw retailers accelerate their media offerings, branching into partnerships with Meta, ITV, 4OD, and The Trade Desk, to create full-funnel advertising opportunities. Digital retail media formats now include the ability to reach retailer audiences across a wider range of channels and provide an opportunity to embed commerce functionality across the entire shopper journey – resulting in a seamless discovery-to-shop experience.

A combined focus on both brand and performance advertising will always be essential to drive growth. As such, advertisers will need to consider how retail media channels are measured on longer-term performance metrics and how they build pipelines of future customers.

The emergence of Specialized Retail Media Networks & Further Opportunities for Non-Endemic Advertisers

In the UK, we have seen grocery retailers dominate by developing sophisticated retail media offerings and digital partnerships, and they are certainly leading the charge on what is possible in this space. As such, we are seeing new players entering the space, with health and beauty, homecare, electricals, and fashion being key categories to watch.

Growth in these areas provides a two-fold opportunity for advertisers. Firstly, by opening the potential for non-endemic brands to harness data across a wider range of shopper journeys and reach richer audiences; and secondly, by providing more opportunities for endemic brands to reach audiences that are already engaged with their products and services.

The use of AI-driven customer engagement

Commerce sites have long been using artificial intelligence to personalize the shopping experience for customers. AI can be used to track customer behaviour, preferences, and purchase history, with information being used to recommend products, send targeted marketing messages, and provide personalized customer service. We can expect retail media platforms to start harnessing their data signals to provide a more personalized experience for their customers from sofa to store.

To deal with the increased competition, fragmentation, and rising costs of advertising, implementing personalized solutions at scale through automation will be welcomed by those early adopter advertisers and brands which will certainly reap the long-term rewards.

As shoppers become more environmentally conscious, we expect to see an increased focus on the power of re-commerce

Re-commerce is becoming increasingly popular as consumers become more conscious of their environmental impact and seek ways to save money. Retailers are taking advantage of this by launching their own re-commerce marketplaces or partnering with existing platforms. We have seen brands like Patagonia, The North Face, Nike and Apple embracing this trend, offering programs where shoppers can buy and sell pre-owned goods, or trade in old products for store credit and cash. This provides a new opportunity for brands to not only boost sales but also increase loyalty, encouraging customers to stay engaged over the long-term.

Retail media is growing rapidly and becoming increasingly fragmented. To scale success, marketers must adapt and learn quickly from different platforms. Understanding how retail data can benefit strategy and define the marketing mix will be unique to each brand, but those that adopt early and build a knowledge base have the opportunity to succeed.