The Promise and Pitfalls of Retail Media Solutions in Digital Advertising

In the evolving landscape of digital advertising, retail media solutions have risen as powerful tools, particularly for FMCG brands looking to leverage loyalty card data for more targeted and personalised campaigns. The ability to tap into detailed customer purchasing behaviour and demographics allows advertisers to reach highly specific segments with precision that traditional media has struggled to offer. However, despite the clear advantages, these platforms introduce significant challenges, especially for brands with broader distribution networks that extend beyond major retail chains.

Retail media solutions, particularly those offered by dominant supermarket chains in the UK, provide substantial value by linking marketing efforts directly to consumer purchases. Brands can track the success of their campaigns more closely than ever, identifying which ads led to specific sales. By harnessing loyalty card data, these platforms help brands understand shopper preferences, optimise their messaging, and drive conversions.

Yet, as beneficial as this may be, these platforms represent another layer of complexity. Much like the 'walled gardens' seen with tech giants like Facebook and Google, these retail media networks create closed ecosystems that limit visibility into consumer behaviour outside their own retail environments, although I acknowledge there is a growing desire to move in this direction. Media planning for brands however becomes increasingly fragmented as they must navigate multiple platforms, each with its own proprietary data, metrics, and audience insights. The more brands become reliant on these isolated ecosystems, the harder it is to manage comprehensive marketing strategies that span different channels.

Another critical issue is the missed opportunity that arises from focusing exclusively on these supermarket-driven retail media solutions. The reality is that a significant portion of consumer purchases occur outside of major retailers. Independent retailers, convenience stores, petrol stations, quick-service restaurants, and motorway services represent a vast but often untapped network of purchase points. For brands with products sold across these outlets, the current retail media solutions offer little insight into their customers’ behaviour or purchasing habits in these spaces, leaving a blind spot in understanding consumer behaviour.

This is where digital couponing and promotions can play a transformative role. By using digital promotions, brands can capture valuable data both from within but also outside the traditional retail media environments. Digital couponing offers flexibility in terms of where and how brands can engage with shoppers, whether through in-store activations, app-based offers, or digital redemptions at a variety of retail points. It opens up the opportunity for brands to track and understand their customers across a wider spectrum of purchase channels. Not only can brands gain insights into who is buying their products at independent stores and petrol stations, but they can also build more comprehensive shopper profiles that are not limited by the walled gardens of major supermarkets.

The integration of digital promotions with broader shopper acquisition and retention strategies gives brands more control and visibility over their consumers' journey. Instead of relying solely on large retailers for insights, brands can take a more holistic approach to shopper marketing, driving engagement and building loyalty across a range of retail environments. Moreover, the data collected through these promotions can be used to create personalised experiences for consumers, even in places that do not offer loyalty card programs, further extending the reach and impact of advertising efforts.

So while retail media solutions have undoubtedly revolutionised how brands target consumers, they also come with limitations. The increasingly siloed nature of these platforms complicates media planning and excludes key purchasing environments from the data equation. To truly maximise shopper engagement, brands must look beyond the walled gardens of major retailers and leverage digital couponing as a versatile tool for reaching customers wherever they shop. By doing so, brands can bridge the gap between their advertising efforts and consumer behaviour, ultimately fostering deeper connections with shoppers and gaining a competitive edge in an increasingly complex market.