Why we’re getting closer to solving the retail media Rubik’s Cube
Opinion
The key challenge for this nascent channel is ensuring seamless integration of all elements in the ecosystem, particularly CTV and OOH, and adapting work in a creative way.
Sometimes an industry can be changed by just one launch or one piece of information that creates a wave of interest. But, more often than not, change comes in a series of events that nudge behaviour in a particular direction.
The growing interest in retail media is following the latter path. To achieve its maximum potential, retail media needs to make a series of moves, rather like solving a Rubik’s Cube, that together demonstrate the true value of investment in this type of advertising.
We already think about retail media as an ecosystem including data (sales, CRM, loyalty, contextual), digital commerce, in-store media, measurement and optimisation technology, and integration of the wider hinterland of media including TV, radio and OOH.
The big challenge is integrating these elements seamlessly to maximise the return on brand investment and understanding how each element (and the interaction between them) changes consumer behaviour.
Sealing the deal for in-store media
Recent research by our client Co-op Media Network and Circana is a major step towards enhancing our understanding of how one element, in-store media, influences the consumer.
It reveals that retail media in store, in a convenience context, is not just a traditional performance marketing medium. It’s also an initiator of discovery and experimentation that feeds later sales potential elsewhere.
The study looked at multiple campaigns run across confectionery, beer and ice-cream categories, and found the same pattern. FMCG ads shown in Co-op stores boost sales in competitors within a local catchment area as well as in the original store where the campaign was shown.
This indicates that people are remembering what they’ve seen. Perhaps it is the first time they have encountered a product or brand and they have gone on to buy it again elsewhere, often in a larger-pack format.
This matters not just to FMCG brands that sell 65-85% of their products in a physical store (95% for convenience). It’s also a way for media planners to understand the role that in-store media plays in the advertising mix and how it could work in conjunction with other media.
Let’s face it, although shopper marketing has been around for a long time, retail media in its current form is still at a very early stage and it does not have the decades of research behind it that TV and OOH do. While in-store as a performance medium stands up against digital marketing, this is potentially the first evidence of its wider impact in the physical world.
The next big moves are OOH and CTV
The big question is: if in-store media plays a wider role beyond the store in terms of awareness and sales elsewhere, how should it integrate with connected TV (CTV) and digital or programmatic OOH?
Enhancing the interaction between these three will be the next stage in completing the retail media proposition puzzle.
The launch of Amazon Prime Video’s advertising-supported VOD (AVOD) offering earlier this year was another significant turn on the retail media Rubik’s Cube. At a stroke, Amazon connected its retail media proposition with an audience of 200m worldwide (just under 10m in the UK), enabling endemic and non-endemic brands to access audiences powered by its huge lake of retail data.
Physical-first retailers must create their own TV integration template that speaks to the power of store networks and the volume of sales delivered there. Retailers such as Boots, Sainsbury’s, Currys and Tesco are all experimenting with ways to reach further up the funnel using TV.
Boots teamed up with ITV AdLabs’ Matchmaker retail media solution last year, while Channel 4 streaming is working with Nectar360. Currys Connected Media recently announced a partnership with Titan OS to deliver addressable CTV advertising.
In the US, Roku, Google’s Display & Video 360, The Trade Desk and TikTok are collaborating with Walmart Connect to build an AVOD proposition. Walmart’s CTV intentions were underscored by its acquisition of Vizio. A range of other major retailers such as Albertsons are following suit.
Creating robust, long-term CTV integration will be critical to rebalancing investment in retail media — physical retailers have much ground to make up against Amazon.
OOH and the retail media halo
The halo effect highlighted by Co-op and Circana’s study emphasises the huge potential wins to be had by integrating OOH into retail media network offerings more seamlessly.
We’ve used a combination of retailer data, insights and previous campaign learnings to inform optimal site selection, creative direction and strategy. This data-centric approach to extending campaigns across the funnel using OOH means brands can achieve multiple objectives — stimulating immediate purchase intent while simultaneously driving long-term brand awareness, consideration and engagement.
Unlike digital off-site or on-site channels, it’s more difficult to directly attribute a specific sale to an audience exposed to an OOH ad. However, our incremental studies have shown that omnichannel campaigns, which include OOH, are more effective compared with single-channel efforts.
But, right now, enabling easy access to programmatic OOH estates around store networks that cross multiple media owners is a complex challenge. It requires a deep understanding of the brand’s objectives and key target audiences to guide the planning and buying process effectively.
To realise the potential of OOH integration, brands and retailers need to collaborate closely to iron out complexity and create more frictionless access. They’ll need to approach this and differences in measurability with an open mind. While immediate, attributed sales might not always be evident, the longer-term value and uplift in brand performance, awareness and affinity will provide significant returns.
Unlocking the creative part of the puzzle
Another significant opportunity that must be unlocked lies in the creative advertising space.
Can creatives learn how to construct an interplay between different media that enables a campaign to bounce from TV viewers on the sofa to mobile social to digital OOH to in-store — in a way that is not repetitive, but entertaining and maximises the message and the memory?
Creatives will need to become fluent in media and adapt their work to each context and media experience.
So don’t believe it when you hear that retail media is a digital-only play. Like any marketing campaign, it is a puzzle of interconnected channels that need to work together to provide clarity to the customer.
None of these challenges is insurmountable and the momentum to solve them is building. As they say, nothing worth having is easy.
Sam Knights is CEO of SMG