Retail media is growing fast. According to Dr Daniel Knapp, a retail media consultant from IAB UK, cyclical economic changes and structural shifts in the digital ad industry have created a “perfect storm” that is lifting retail media into adolescence.
“Retail media in 2023 is going to grow 7.8-times as fast as the total digital ad market,” said Knapp, “because of the quality of the data and the ability to deliver measurable impact in highly uncertain economic times.”
At Campaign’s recent retail media breakfast briefing, Andy Stephen, UK managing director of retail and partnerships at ad platform Criteo, said retail media might be “still a nascent business for many” but it’s an industry that is “changing rapidly”.
From sofa to store
Retail media offers highly engaged audiences and the chance to speak to customers “in a language and environment that they’re receptive to”, according to Uche Ofili, head of agencies for Tesco’s Media and Insight platform, which launched in November 2021.
“Through the pandemic, it’s a place where advertisers quickly learned there was guaranteed reach,” said Philip Eacott from Waitrose, “and having an end-to-end proposition is really compelling. Retail media provides a unique opportunity for brands and advertisers to build a truly connected and omni-channel experience.”
That ability to track the entirety of the customer journey gives retail media an edge. “We’re able to connect the dots between advertising exposure and customer behaviour across online and offline touchpoints,” added Ofili.
“It’s about attribution in some sense”, said Alex Prouhet from Deliveroo. “Through our data licence agreements, we’re able to provide our partners with a truer view not just on return on investment but also on what drove that purchase. It’s encouraging that we all are committed to a customer-centric model.”
Why retail media matters
It’s great for brands but it is also becoming a commercial necessity for retailers. “It’s important for the industry to understand the dynamic of retail and the lower margin,” said Tom Langley from the John Lewis Partnership. “The likes of Amazon and Alibaba have brought prices down for customers and make money through data and advertising services. So it is a conscious shift in the business model of how retailers need to operate – we just need to do it in the right way.”
“You can learn so much from digital marketing in the Noughties,” Langley reflected. “There was no real emphasis on the quality of the content. It was all about what you could do with data and how quickly you could sell it. And that industry has pretty much disappeared.”
“Trust is extremely important,” said Eacott. “A lot of our customers view Waitrose and John Lewis as among the most trusted brands in the UK. Many brands see a listing within Waitrose as a stamp of endorsement.”
Prouhet described this bond as a “sacred trust with consumers”, adding: “If we want to progress as an industry within digital, building trust from a data perspective is a big part of that.”
Standardisation and centralisation
The aim is to grow the retail media industry and to do that requires a degree of collaboration.
According to Andy Stephen, a centralised market place is part of the vision of Criteo, which works with 150 retailers globally. “Each retailer has a different view of how their retail media business should be run,’ he said. “With our tech we try to enable whatever model the retailer wants but, of course, we want to standardise. Let’s make sure that they’re connected into the right platforms and partners that can be utilised at scale by agencies and brands. I think that’s what we can aim for as an industry.”
Anna Khan from the John Lewis Partnership said: “There is a challenge around the standardisation of ad formats and measurement frameworks so we should come together as an industry.”
Eacott added: “Standardisation and setting KPIs can help the retail sector grow together. We think there’s a great opportunity for agencies and brands to better align with retailer marketing plans to achieve that win-win-win solution [for brands, customers and retailers] we so often hear about.”
According to Stephen Shepherd from Tesco’s Media and Insight platform, “we’re all pushing towards the same goal. Retail media is influencing the entire advertising ecosystem”.
Langley urged industry bodies like ISBA and the IAB to provide assistance because “we’re not trying to compete with each other, we’re trying to grow the industry spend”.
“We need to get the basic building blocks in place, then I think as an industry, we are set for success,” Criteo’s Andy Stephen concluded.
Pictured from left: Andy Stephen, managing director; Alex Prouhet, strategy & operations director; Stephen Shepherd, media consulting director; Tom Langley, head of personalisation and retail media; Maisie McCabe, UK editor
