Retail Media: What strategy for retail?

Retail media was an experimental playground for years, but has since developed into one of the strongest advertising channels for most brands. According to a survey by Handelsverband.swiss in collaboration with Swiss Post and GfK, sales of Swiss online stores grew to over 14.4 billion Swiss francs in 2021. According to ZHAW and MCI, the market volume in online retail will continue to grow to an estimated 15.1 billion Swiss francs in 2022.

These prospects offer excellent opportunities to increase advertiser awareness and sales, and give retailers new leverage to monetize their most important data, transactional data. However, while this is also a constant source of innovation - both in formats and methods - there can still be confusion.

First step: properly understand the main potential of retail marketing

We are in the midst of a pragmatic shift in advertising - and retail marketing is no exception. Because it is a targeted advertising technique placed directly on the consumer's customer journey, retail marketing campaigns really have two goals:

1. Goals for the brand: A strong strategy to increase awareness and image throughout the customer journey and increase sales. This will be achieved by leveraging the available and very accurate transaction data.
2. Goals for the retailer: Monetization of target groups should generate an important additional source of revenue.

When it comes to traffic and sales in physical stores, this is nothing new and has always been achieved with the help of point-of-sale advertising or promotions. However, the playing field is broadened by the concept of online retail media. This concept allows the company to place its presence throughout the acquisition process - using programmatically bought ads from the very first search by the Internet user.

This multitude of possibilities along the entire customer journey, both in terms of timing and the strategies to be activated, increases the relevance of retail media, but undoubtedly makes its implementation more complex.

Second step: Understand all other benefits

The main purpose of a retail media strategy is to maximize the performance of a brand's digital campaigns by effectively linking them to the retailer's assets.

Owned Media - communication tools that belong to the retailer - are essential and very lucrative for retailers. It is highly recommended to improve the effectiveness of this strategy by adding Paid Media - Retargeting, Display & Video, SEA, Social Media, etc. - and leveraging the monetization of consumer data via a so-called "Audience Extension". In this way, the brand will go beyond many constraints and will be able to intervene in all the desired stages of the conversion funnel.

Finally, this valuable consumer data can also benefit brands that want to gain a better understanding of their customer behavior or measure the impact of a campaign. Today, these surveys and insights are essential for advertisers, and retailers are also keen to know how to analyze and monetize their customer data. No retail media offering will be able to do without these building blocks in the near future.

Step three: Select method

Retailers have two options:

1. Acquire the skills and technology needed to implement a retail media strategy internally or
2. Establish an external partnership

The first option seems to be the most commonly chosen solution. In reality, however, it only makes sense for sales giants that have both the necessary financial resources and a sufficient volume of potential advertisers to justify this approach and make it profitable in the short term. This internalization, which ultimately amounts to the creation of an advertising marketer - or rather a directorate - may even go so far as to establish a genuine self-service platform for brands and agencies.

However, in 2022, outsourcing still seems to be the most popular solution. It is advisable for retailers to choose their partners based on their expertise - ability to segment and activate data, good connectivity to all web environments, etc. - and their ability to innovate. Retail media, while a dynamic and evolving industry, is still in its early stages in this part of the world.

What does the future hold?

In light of what is already happening in the US and Europe, Swiss retailers will also gradually realize the value they can derive from their exclusive customer data - and they will soon start to monetize it more. They will work with DMP providers, DSPs and trading desks to set up captive platforms that scale more easily. They could also push live shopping technologies, which have already proven their effectiveness, and add the social segment that may be missing in retail media.

* Fabrizio Tudisco is Commercial Director of Gamned Suisse.