By Bill Clapes, President at DEEL Media
There are more than 80 retail media networks (RMNs) in the US, with the number steadily increasing as more retailers continue to leverage their online platforms to monetize their valuable real estate by generating advertising revenue in-store. At Cannes Lions this year, retail media networks were everywhere – and one of the hottest topics around. But these aren’t necessarily a new phenomenon. Essentially, RMNs are an expansion of Digital Out-Of-Home (DOOH) advertising networks.
During Cannes Lions, we saw big announcements from grocery networks, like Kroger and Albertsons, discussing how they are using advertising and retail media strategies to entice shoppers. But the goal of these networks is to sell advertising to the companies who have products/skus in the store. The overarching theory is that companies like Coca-Cola will buy ad space to gain mindshare over Pepsi, and vice versa. There are potentially tens-of-thousands of companies who are the ad-buying audience.
But the biggest problem that I see with RMNs isn’t the technology – it’s that everything so far is just branding exercises. Imagine the billboards in Times Square, New York. It’s all big logos and brand colors. The motion may catch the consumer’s eye, and the logo may make the consumer feel good about the brand, but is that enough to motivate them to do anything? This is why the strategies used in RMNs need to drastically differ from DOOH.
Retail Media Networks Need Call to Actions
RMNs need to take it a step further. To motivate a consumer, the content must have a specific call-to-action. What do we want the person to do? Is it a request, an offer, or something for them to act upon? If that Coca-Cola ad read “buy one 12 pack get a second 12 pack free,” a consumer would be more incentivized to make their way to the beverage aisle and convert the ad to a purchase.
RMNs need to take it a crucial step further. To truly motivate a consumer and drive action, the content displayed within these networks must move beyond passive brand awareness and incorporate a clear, compelling call-to-action (CTA). This isn’t merely about showing a product; it’s about guiding the customer toward a desired behavior.
What exactly do we want the person to do? Is it educating the shopper of the benefits of a new product? Is it an enticing offer, like “Save 20% on all organic produce this week”? Or is it something more subtly designed for them to act upon, such as “Scan this QR code to unlock exclusive recipes”? RMN “ads” should effectively improve the shopping experience, not burdening the shopper or making them feel as if they are yet again a vessel for “Ad Eyes.” The effectiveness of an RMN advertisement hinges on its ability to clearly communicate the next step for the consumer, and improve the overall shopping experience.
Take the Coca-Cola example above. This specific, time-sensitive, and value-driven CTA would create a far greater incentive for a consumer. They would be more likely to actively make their way to the beverage aisle, specifically seeking out Coca-Cola, and convert that ad impression into a tangible purchase. Without such a direct prompt, the ad might register as pleasant branding, but it’s less likely to translate into immediate sales.
This highlights the critical shift RMNs must make from broadcasting information (DOOH) to instigating conversion (RMN). This isn’t just about presenting products; it’s about actively guiding the customer through the purchase journey, from initial interest to final checkout.
So How Do RMNs Improve?
Retail Media Networks need to move beyond simple ad placements and embrace a more sophisticated, data-driven approach that anticipates customer needs and offers tailored solutions at every touchpoint. This means leveraging advanced analytics to understand customer behavior, preferences, and purchase intent in real-time. There is a need to develop deeper, collaborative relationships with advertisers.
Instead of merely displaying products, RMNs should aim to provide personalized recommendations, contextualized offers, and engaging content that resonates with individual shoppers. This could include dynamic product placements based on browsing history, personalized promotions delivered at critical decision points, or even interactive experiences that guide customers through their purchasing journey.
Let’s take a look at the integration of technologies for other industries. Consider a theme park. As technology continues to grow and expand, so do immersive experiences within these parks. The rides, the activities, and most important – the shopping. Imagine shoppers using their mobile devices to “check in” upon arrival at a store, much like a Harry Potter wand. This would enable live alerts on both their phones and in-store signage as they navigate the store, leveraging location data. Such a system would provide valuable insights into shopper identity, past purchase history, and more. These alerts could range from promotions on products they’ve previously purchased and enjoyed, to recommendations based on their browsing history or items they’ve lingered near. Simultaneously, dynamic in-store signage could adapt to individual shoppers or aggregated shopper trends, displaying targeted offers, product information, or even interactive maps to guide customers to specific items.
Beyond immediate engagement, utilizing the technology behind RMNs offer a wealth of data for retailers. By understanding shopper identity (where applicable and with proper privacy consent), past purchase history, browsing patterns, and even their physical movement within the store, retailers can gain unprecedented insights. This data can inform everything from store layout optimization and inventory management to personalized marketing campaigns and product development. The ability to track which aisles are most frequently visited, how long shoppers spend in specific departments, and which promotions trigger immediate purchases, transforms the retail environment into a truly data-driven ecosystem.
The ultimate goal transcends mere transactions, aiming to transform the retail media experience into a deeply personalized and value-driven interaction. This shift is crucial for fostering lasting customer loyalty and significantly driving conversions.
By moving beyond brand building messaging, retail media networks need to cultivate meaningful relationships with consumers, understanding their individual preferences and needs to deliver tailored content and offers.
This personalized approach not only enhances the customer journey but also creates a more engaging and relevant environment, ultimately leading to increased satisfaction, repeat purchases, and sustained growth for brands and retailers alike. Customers leave feeling they won the day, not just that they were a conduit for more ads. And as a result, advertisers see their ad dollars result in higher ROI, and reap the benefits of the next wave of retail media.
