Top 5 Retail Media Partnerships of 2023

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Having worked at global CPG brands like L'Oreal and Mondelez, I've seen first-hand the transformative effect that data-driven, multi-platform retail media partnerships can have on our eCommerce business. In an ever-evolving landscape of consumer behavior, the digital revolution has dramatically shifted how we engage with our customers and drive sales growth.

Today, I'll share some of the most notable retail media partnerships of 2023, according to Insider Intelligence, the rapid growth of retail media networks and the driver behind them, and explore how they might influence our approach to #eCommerce.

What are the Top 5 powerful retail media partnerships of 2023?

With the evolution of?#retailmedia, marketing strategies are progressing towards higher stages in the sales funnel, embracing fresh formats such as the open web, social media, and streaming TV. Through collaborative alliances with social media companies, streaming platforms, and publishers, retail media networks can effectively engage with consumers earlier in their purchasing journey, fostering brand awareness and recognition.

++ Top 5 Powerful Retail Media Partnerships of 2023 ++

Walmart & TikTok, Roku, and Snap

Walmart's retail media network?Walmart Connect?expanding its reach and better measure how social media?and CTV ads influence consumers’ purchase decisions. Walmart's digital ad?revenue growth in the United States is expected to surpass that of?Google,?Meta, and even?Amazon?this year.

Kroger & Walt Disney

Kroger?facilitates targeted audience engagement through streaming media.

PepsiCo?will be the first advertiser to beta-test?Hulu’s streaming content.?Here, we see the fusion of entertainment and shopping, creating an immersive experience that is both engaging and conducive to driving online #sales.

Within the CTV landscape, Hulu holds the leading position, surpassing?YouTube,?Roku, and Peacock by generating $3.63 billion in ad revenues in the US in 2023.

Lowe's & Yahoo

Lowe's Companies, Inc.’s collaborated with?Yahoo?to expand the inventory available to advertisers?on its One Roof Media Network, including off-site media placements, enhancing?omnichannel experiences. Lowe's is projected to achieve $11.06 billion in US?retail eCommerce sales and moved up from the 13th position to the 12th.

Albertsons & OMG Omnicom Media Group

Albertsons Companies?is focusing on capturing the CTV market with its collaboration with?Omnicom Media Group. They are empowering brands to directly acquire CTV?advertising within The Trade Desk platform and evaluate the ROI from their ad?Purchases and enhance the effectiveness of RMN with AI.

Dollar General & Meta

Dollar General?has been the inaugural retailer to introduce?Meta's newly?

developed closed-loop advertising solution, which allows advertisers to establish?a connection between their campaigns and in-store sales. DGMN can engage with?more than 90% of its customers through paid media, with an emphasis on rural areas.

These partnerships aren't merely a sign of the times—they're a roadmap to the future, especially for us in the CPG sector.

Key Insights for the Future

1. Customer Engagement: The integration of entertainment and shopping platforms means we can no longer rely on traditional advertising methods. We need to engage customers on platforms they love, in a way that adds value to their experience.
2. Data-driven Decision Making: With platforms offering tools to directly link ad campaigns to sales, we can make more informed decisions and optimize our ad spend.
3. Omnichannel Presence: To keep up with today's consumers, we need a robust presence across all touchpoints—online and in-store.

Drivers of the Retail Media Boom for CPGs

1. Return on the ad spend is between 3-6X or higher with the retail media investment for brands.
2. With the cookieless world on the horizon, CPGs need 1st party data to target specific consumer segments at scale.
3. 20% of CPG brands rank shopper insights as the top opportunity the retail media provides.

But still, the real driver behind this boom is the high gross margins for retailers.

Drivers of the Retail Media Boom for Retailers

• The retail media opportunity has truly transformative potential, and the research indicates that it could bring rewarding profit margins up to 70-90% for the?#retailers?with onsite digital?#media.
• Brands are expected to invest more money into retailers' media networks, with spending projected to grow a remarkable 22% annually over the next five years.
• Offsite retail media is also booming, with spending rising 35% annually. And the potential rewards are considerable - margins in this market can reach as high as 40% once you factor in associated costs and fees, and it is competitive with the gross margin for most retail categories.
• As the growth disparity continues between onsite and offsite retail media, brands could see a slight shift towards offsite spending over the next five years.

Retail Media Impact on the Advertising Value Chain

??By 2026, an estimated $1.3 trillion in enterprise value is expected to be up for grabs for?#retailmedia?in the United States - creating data-driven opportunities and lucrative revenue potential across advertising sectors.

1. The lion's share goes to retailers, of course. Retailers can capitalize on their success with a staggering $820 billion available to fund the development of innovative, profitable media ventures.

2. Advertisers/brands have the potential to see up to $280 billion in higher returns on their investments, representing an unprecedented level of financial opportunity(Return on the Ad Spend - ROAS).

3. With $160 billion in the game, ad-tech providers will introduce MarTech solutions to help companies as media empires tap into their potential for success.

4. Publishers can capture $50 billion through innovative ad solutions – opening up exciting new possibilities for the future!

5. Ad agencies can capture $5 billion by helping clients maximize their media performance and planning efficiencies; this funding will empower advertising agencies to turbocharge enterprise-level marketing strategies.

The retail media boom is driven by data precision, digital transformation, personalization, the DTC trend, measurable ROI, co-op marketing, and rising consumer expectations.

Take care, and smile...

Sources: Retail Touchpoints, Insider Intelligence, Winsight Grocery Business, Kroger, 8451

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About Mert Damlapinar

Mert Damlapinar has been in director roles for eCommerce, digital marketing, and sales; he's currently the Principal of CPG Digital Commerce Acceleration at EPAM Continuum. He holds a master's degree in Applied Business Analytics from Boston University, executive management degrees in Integrated Digital Marketing from Cornell University, and Applied Data Science and Digital Transformation from Massachusetts Institute of Technology.

He published his second book, Agile Analytics for Startups, in October 2022, and he's currently working on his 3rd book.