Rarely discussed until just a few years ago, the retail media and data monetisation market in Europe is expected to grow from under €8 billion in 2021 to €25 billion by 2026.
We’ve already seen moves from large grocery brands, such as Sainsbury’s in the UK and Carrefour in France, to build up the digital advertising side of their businesses.
With access to consumers’ attention on a scale few other industries can match, retailers now have the potential for selling ads, both in store and online, alongside new data services.
Retailers are sitting on a goldmine of data about their customers’ needs, wants, desires and behaviours. The data is often richer and more granular than that available in other sectors — even including major ad-reliant technology players like social media platforms — because much of it is based on actual transactions.
This granularity is exactly what advertisers need to provide targeted, personalised, compelling, and relevant content much closer to the point of purchase. It means that retailers can potentially give brands much better feedback, much faster, on the effectiveness of their campaigns.
These capabilities are becoming even more important as the third-party cookie enters its death throes and technology companies completely rethink their approach to user privacy. Delivering targeted advertising campaigns via digital channels is becoming increasingly difficult without access to first-party data, if not impossible.
A Win-Win For Retailers, Brands And Consumers
Done well, retail media offers something for everyone. Offering relevant content, offers and promotions at the most relevant point in their purchasing journey, consumers are less likely to be annoyed by intrusive advertising.
Retailers can generate new revenue streams, increase profitability, and get more insight into their existing customer base. With the economic outlook remaining uncertain around the world, this can provide a much-needed source of new revenue growth.
Lastly, retail media is a win for brands too, who can provide far more targeted, cost-effective advertising, with more direct ways to measure purchasing uplift, whether online or offline.
Already, 92% of advertisers and 74% of agencies say they’re partnering with retailers to reach consumers.
How Can Retailers Tap Into This Opportunity?
This is a very fast-moving space and retailers will need to be quick if they are intent on capitalising on the opportunity. It’s probable that only a small number of players will come to dominate the market, so early-mover advantage is especially important for retailers wanted to stake a claim.
The success of retail media rests on having the right digital infrastructure and data capabilities. Historically, these haven’t always been retailers’ strongest suits.
There are one or two approaches most retailers are taking right now. The first is to create and run a retail media platform (either on their own or with a partner) to establish a digital and/or in-store advertising network. The second is to focus on building a data insights platform for sharing data, insights, and value with brands and advertisers.
The real value is to be found in bringing the two approaches together – providing brands with a unified offering comprising both ads and data insights to help them grow their own businesses. To do this, retailers need a modern underlying infrastructure that includes cloud and edge technologies, as well as capabilities like data clean rooms and advanced data management.
However, the technology is only one side of the equation. Becoming a retail media player at scale requires a new end-to-end strategy for the whole business. It requires new ways of working and access to new kinds of skills that aren’t necessarily present in many existing retail businesses – including ad sellers, content producers, media buyers and data analysts to name just a few.
The Time Is Now
To gain a foothold in this huge growth area, it is vital that retailers move quickly to establish a clear retail media strategy and invest aggressively in establishing the underlying technologies, processes and skills.
Going forward, the retail business model will increasingly come to resemble the media business model. It’s a significant change. And the retailers who get it right first are set to realise the greatest rewards.
© 2023 European Supermarket Magazine – your source for the latest Technology news. Article by Laurent Thoumine, senior managing director, Europe lead, Accenture’s Retail Industry practice (pictured). Click subscribe to sign up to ESM: European Supermarket Magazine.