Retail Media - The untapped potential

Retail media has quickly become popular because it allows brands to target shoppers in a highly effective and immediate way, right where they’re buying.

For retailers, it’s a valuable new source of income, and for brands, it’s a way to connect with consumers in a more direct and relevant manner, especially as other forms of digital advertising become more challenging.

Retail media refers to the advertising space that retailers offer to brands within their own shopping environments, whether in physical stores or online. Think of it as the ads you see in a grocery store or on a retailer's website. These can include digital screens displaying promotions, product placements on endcaps (the displays at the ends of aisles), banners on websites, or even personalized offers sent through mobile apps.

Why Has Retail Media Become So Popular?

1. Shift in Shopping Behaviour: Over the past few years, there’s been a huge shift in how people shop, with more consumers shopping online or using apps to enhance their in-store experience. Retailers recognised that they have a captive audience—people are already in a buying mindset when they’re in a store or on a shopping site. Retail media allows brands to reach these shoppers directly, right where and when they’re making purchase decisions.
2. Direct Access to Shoppers: Retailers have a treasure trove of data about their customers, including what they buy, how often, and what they might be interested in. By using this data, brands can target their ads more precisely, making retail media a very attractive option for advertisers who want to ensure their message reaches the right people.
3. A New Revenue Stream for Retailers: For retailers, selling advertising space to brands is a lucrative way to earn additional revenue. Especially as online shopping has grown, retailers have found that offering brands the opportunity to advertise on their platforms can be just as profitable as selling products themselves.
4. Changes in Digital Advertising: With increasing restrictions on how companies can track consumers online (due to privacy concerns and changes like Apple’s data privacy rules), brands are looking for new ways to reach potential customers. Retail media offers a solution because it targets shoppers within the retailer’s ecosystem, where consent is usually already given.
5. Effective Point of Sale Influence: Retail media is powerful because it influences shoppers at the exact moment they’re making purchasing decisions. For example, a digital screen in a grocery store might highlight a sale on a product just as you walk by it, making you more likely to add it to your cart. This immediate impact is something other forms of advertising often struggle to achieve.

Let's not get carried away... ...yet

What a great tool Retail Media is! But hold on a minute, many of the examples we have looked at fundamentally aren't aligned with either shopper psychology or shopping behaviour. For example, shopper attention is fleeting, to say the least (usually under 1 second). Even stood in a queue, our own research quantified that shopper attention span was less than 6 seconds.

What does this mean - Shoppers will NOT stand in a busy aisle diligently viewing a 20 or even 30 second video, which incidentally is located above their natural sight line.

Here's another example: What shoppers see in their fleeting attention is what they leave with. Some 'creative' teaser campaign might well be for the most part little more than a predominately blank screen.

The point I'm making is that in-store media is different: It's not above the line TV type advertising, But psychologically it can be a huge brand awareness and promotional tool. But the bit you need to add to fully exploit this is the 'Psychology.

In Summary:

Retail media has quickly become popular because it allows brands to target shoppers in a highly effective and immediate way, right where they’re making purchase decisions. For retailers, it’s a valuable new source of income, and for brands, it’s a way to connect with shoppers in a more direct and relevant manner, especially as other forms of digital advertising become more challenging.

Now all we need to do is to align it with the minds of shoppers - And that is for the most part the untapped opportunity. I'm posting more detailed articles covering Shopper psychology within retail media, in the coming days.

Reach out if you'd like to discuss this further.