The industry is facing another seminal moment — the rise of the retail media ecosystem, which provides an innovative way to advertise close to the digital point of purchase, precisely where messaging and offers can be targeted to consumers based on their shopping behavior and purchase history.
Advertisers want to spend money talking to the right people; they want to be able to present customers with relevant content to drive them through the funnel, from awareness all the way down. This is where retail media networks, started initially by grocery retailers, are coming into focus. These networks are unlike other marketplaces as their ads are very close to the point of purchase, so marketers can more easily see how much their ads influence sales.
“If retailers become retail media networks, then they are a data source and can offer much more distilled and accurate data to create a better user experience and create a better and more efficient process for advertisers,” said Oz Etzioni, CEO at Clinch, regarding grocery retailers and other traditional retailers.
Expanding on the point, Etzioni said the retail media network boom is empowering retailers to make their loyalty and CRM data even more valuable.
“They aren’t just offering inventory as a publisher, they also hold the most precious data points — the type of data that isn’t available anywhere else,” Etzioni said. “This data is from people actually engaging with the location and products and who have given their consent to collect.”
One of these networks spoke with a Modern Retail reporter about the industry, “The most important piece of this business is that our first-party data allows us to base our audience off of real people,” said Kristi Argyilan, who was president of Target’s media network, Roundel, at the time. “The results when you market and use data based on real people is significantly better than data pools that are out there.”
For effective personalization, first steps include mapping goals
Advertisers start the journey toward effective personalization by identifying what they are looking to achieve. While these goals may shift as they learn more about navigating advertising on retail media networks, it’s important to have very specific targets at the start. Otherwise, initial results could take marketing teams in so many directions that focus suffers.
It’s also important to consider the number of signals, time for processing, conditions, channels, and other needed elements — and that will need to be continuously updated, as personalization is never a set-it-and-forget-it type of tactic.
Etzioni suggests thinking of the way retail media networks operate as somewhat akin to the travel industry.
“They get you excited about going on vacation and offer many different destinations and flight options from several operators, bringing you down the funnel to actually decide to make a purchase, and then they track those purchases,” he said. “The whole idea is to get you into the CRM. They want to know when you’ll travel next, and if you’ve already booked a flight, they know you then have to get a hotel. With the travel industry, there’s on-site, and off-site advertising and the retail media industry is becoming smarter by looking at what works for others.”
Next steps for retailers on the path to personalization: Location, intent and device type
With goals mapped, an essential next step in driving personalization with retail media networks is to optimize product recommendations by shopper location and intent.
“It’s about location services and showing what the specific offers of nearby locations are and being able to match the products with what consumers are usually shopping for,” said Etzioni. “There’s a lot to consider, like what type of messages to show a specific user, and there’s a lot of A/B testing to be done to identify the right language and give users more ad experiences to segment them further,”
Beyond location and customer responses, other factors include what’s happening around the consumer at a given time.
“Once they get more data across locations, they can take it to the next level and start dealing with weather conditions,” Etzioni said, by way of example, “and then specific times of day and matching the different experiences to the different devices where people do most of their shopping. What specific products are they likely to purchase on their phone versus their desktop? What about during the day versus at night? There are different behaviors that those retail media networks and the advertisers need to learn to tie into their experimentations.”
Outcomes: Retail media networks plus personalization are driving conversions
Finding ways to deliver ads that are closely aligned to consumers vastly increases conversions, but to do it right, advertisers need to engage with retail media networks strategically. When they do, the returns are manifold.
“Advertisers will be most amazed by the amount of and the speed of the data they get back,” Etzioni at Clinch added on the benefits of retail media networks and personalization. “The data will be much more robust because this is first-party data and these are people that are actually buying online and in-store, and the feedback is pretty much immediate. It’s actionable because they’re constantly engaged with the brand. Data is being built up constantly.”
With this, Etzioni advised a focus on creating — or obtaining — needed audiences for more specific targeting: “The big retailers will start buying those niche retailers who have very specific audiences rather than building up that sort of audience on their own. Those niche audiences can be very precious, premium audiences and allow for hyper-specificity.”
Advertisers will benefit from being able to target such niche audiences for their products. Leveraging such data — at scale — will increasingly rely on retail media networks.
The post Advertisers are investing in personalized customer experiences with retail media networks appeared first on Digiday.