Retail Media: How did we get here?

Retail Media, a Next Retail Marketing Iteration series

Here is the previous post: Retail Media a Retail Marketing Iteration Part1

The previous post left us with this "provocative" truth: the underlying "rise of retail media" does not represent a revolution in Retail Marketing but rather an iteration on this holistic or sometimes called integrated Consumer and shopper Journey dictated by seismic changes in C&S behavior, the digital-first area and its post-cookie impact on communication, what the retail landscape and competitiveness, new service categories, new regulations, and technological innovations.

How did we get here?

Before debating how I define retail media and where it fits, realizing the Journey so far is essential.

It started in the 1950s when P&G's Brand management model went mainstream and the first U.P.C code in P.O.S. in 1965

The 1970s saw couponing and promotions growth, and we need to wait till the 1980s to see Brands emerge as a strategic asset. Customer Segmentation developed and led to a new approach in retail space management. Epsilon launched what the premise of a D.M.P., Demographic Inc., initially involved in producing mailing lists using phonebooks and payroll processing, rebranding itself into Acxiom. In the late 1980s, Ms. Dunn and Mr. Humby started transforming how we'll shop forever by creating Dunnhumby.

Some breakthroughs in the '90s shaped digital marketing. This term emerged in 1990s when information and communication technologies developed rapidly. The first clickable banner on Hotwired, an advertisement for AT&T in 1994, went live, and people clicked on it like crazy. In 1996, the first server – DoubleClick, came about to satiate the massive demand of advertisers wanting to place their banner advertisements online. Google was officially launched in 1998 by Larry Page and Sergey Brin to market Google Search, which has become the most used web-based search engine.

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On the retail side, before supermarkets, hypermarkets, and discounters existed, a local store owner knew his customers by heart, their aspirations, and preferences, and he responded in a superior way to win the hearts of his customers—the scale development in retail solutions since the 1970's diluted this commercial intelligence. Category Management developed as a working model to provide insights into how retailers and manufacturers can build winning strategies within a logical brand-building framework and how new retail channels, technologies, and media arise. Even more importantly, the underlying approach was how to build upon the consumer/shopper insights to configure the go-to-market strategies and tactics for brands and store formats to succeed. E.C.R., a collaborative movement and philosophy, originated in 1993 and gained global popularity by focusing on new supply chain management. One idea was partnering with trade allies to provide better services to its customers.

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In 1994, Dunnhumby changed forever the way retailers could leverage the massive data they had by showing to the Tesco board that their tiny business had the software and skills to do something the supermarket group hadn't been able to do for itself - work out almost exactly what Tesco's customers were buying.

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It's Y2K and the dot.com.bubble; by the end of 2001, most dotcom stocks went bust. Even the share prices of blue-chip technology stocks like Cisco, Intel, and Oracle lost more than 80% of their value. It would take 15 years for the Nasdaq to regain its peak, which it did on April 24, 2015

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Retailers and C.P.G.s were starting to see where the future of marketing insights was: shopper insights. As C.P.G.s had more money to invest in insights than retailers, they pushed the boundaries of equity building not only to uncover these insights for brand building at retailers but, more importantly, to help build and grow retailers' category; this led to de-silos domains, internal and external alignment and encouraging collaboration that leads to share growth.

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Data Management Platforms (D.M.P.) gained prominence on the digital transformation side. At that time, the two most exciting challenges for data integration were two sides of the same coin: sometimes the challenge is determining when two records refer to the same real-world object; other times, it's about knowing for sure they do not refer to the same real-world entity. The method used to find these connections was referred to as identity resolution. The "Beast" Amazon introduced its web-based retail services('02), and the "democratization" of cloud computing was born.

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From 2005 to 2010, digital technology was booming; we witnessed the birth of MySpace ('03), a booming social network with millions of dedicated users before its fall; Rakuten introduced e-retail media service('05), Google Ads4Retail('06), Amazon launched Amazon Web Service('06) to offer online services to other website or clients with one popular in particular called Amazon Mechanical Turk. Thanks to the democratization in cloud computing, F.B. Ads ('07) Criteo product('08) launched their services. Kevel, previously known as Adzerk, was born in 2010 and now offers a suite of APIs to allow developers to design, build, and launch fully customizable server-side ad servers. Acxiom launched AbiliTec Digital Identity('10), a web-based tool to match digital identities to traditional name and address data, such as that collected from loyalty programs.

Collaborative Customer Relationship Management(CRM) marked a significant evolution in how businesses managed their customer relations and subsequently gained mainstream acceptance in the retail industry; CRM 2.0 emerged to enhance customer engagement, satisfaction, and loyalty. It became fully embraced as a fundamental strategy for growth.

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From 2010 to 2015, Retail Media started gaining attention ('10), Twitter Ads('12), Instagram Ads('12), and Amazon Marketing Services('12) launched. Customer Data Platform (C.D.P.) term was first used ('13), and Acxiom acquired Liveramp('14). Digital changed the game by increasing the brand's "phygital" availability while becoming far more attractive in connecting confirmed message delivery to shopper activation or conversion in addressable and measurable networks of partners.

In 2011, shopper marketing began gaining mainstream recognition in the retail industry thanks to the rapid digital transformation ( new cloud tools, platforms), Data Analytics, Multi-channel integration (the famous holistic "experience" in-store and online), Retailers and Brands started collaborating more closely in shopper marketing efforts.

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From 2015 to today, we witnessed the rise, growth, and issue of programmatic('15), Dunnhumby US rebranded into the powerful 84.51° Kroger's Analytics & Consulting Arm, Infosum('16), CitrusAd('17) launched, A key milestone in 2018 with GDPR outlines certain obligations organizations must follow which limit how personal data can be used in E.U. took effect. OnlineSale.ai('18), TikTok Ads('19) launched; Publicis Groups made its largest-ever purchase as it acquired Alliance Data Systems' Epsilon unit as part of a stated strategy to become "the preferred transformation partner for its clients." The CCPA('20) came into effect? January 1, 2020. It was the first comprehensive modern data privacy law in the United States.

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What does all of this have to do with Retail Media?

We are in the age of the digital-first Consumer. As Bain glanced, "Consumers tend to respond to uncertain and recessionary economic environments in one of two ways: spending extensive time on product research before purchase, or making impulse decisions when standing in front of the shelf. Consumers will continue to shop in many channels, not necessarily rejecting physical stores, and while digital is here to stay, consumers are switching brands at unprecedented rates, putting pressure on brands to ensure availability and what they stand for. Today's retailers, as McKinsey highlights, "would do well to venture beyond the traditional bound of retailing if they hope to remain relevant and competitive in the year ahead." Right movers are starting to understand the benefits of playing as an activation company, and it is not retailers going into the media business but retailers expanding business, whether through collaboration or partnership, through media.

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Next, let me talk about where retail media should sit, why, and the so what. Thank you for your time and comments. John