How Brands Can Get the Most Out of Their Retail Media Strategies

By Holly Aresty

Retail media networks (RMNs) have been dominating the e-commerce conversation as retailers look for new revenue streams amid increasing margin pressure, inflation and ongoing supply chain challenges. These networks serve as a kind of digital end-cap display for brands, giving them a way to optimally position their products on a website for easy discovery — just as they might bid to have their products showcased at the end of an aisle in a physical store.

Walmart, Home Depot, Lowe’s and other big-box names have been leading the charge by creating their own RMNs in-house, but companies across the retail spectrum are now realizing they can leverage their websites, apps and other digital channels as advertising platforms to drive ancillary revenues and target customers more effectively.

According to a forecast by GroupM, retail media will generate $101 billion in revenue this year, and $160 billion annually in five years, making this a perfect time for retailers and brands to get in on the action and leverage one of the fastest-growing markets for digital advertising. The risk with retail media is that consumers will be overwhelmed and annoyed when presented with too many ads or with ads that are irrelevant to them. In order to effectively capitalize on retail media, choosing the right technology provider is crucial. A fundamental factor is working with a provider that prioritizes customer experiences and ensures that shoppers receive the right message at the right moment.

Here are three ways retailers can make sure they get the most out of the retail media network opportunity:

Leverage first-party customer data. Online retailers are sitting on a wealth of data that they're often not fully utilizing. With data privacy laws tightening and Apple’s recent cookie policy changes, first-party data has become a gold mine for targeting existing and prospective customers with the right messages. Every time a customer completes a purchase, a retailer gains a more holistic view of the person, gleaning demographic and transaction data that can be leveraged as part of a retail media strategy as well as to improve the shopper experience. With the application of strong machine learning algorithms, this data can be an incredibly effective tool for determining the optimal offer or product to show each customer so they feel as if they’re getting a highly personalized buying experience.
Add value during the transaction and confirmation stages. Retail media strategies typically focus on presenting messages that relate to the items shoppers are adding to their carts. However, merchants that only focus on product-based optimization miss out on a massive opportunity to optimize messaging on different pages in the checkout flow. The offers that would be most relevant to a shopper who has reached the payments or confirmation page differ from those that would be most relevant at an earlier point in the shopping journey. Partnering with technology providers that understand how to optimize messaging across each moment will allow retailers to present customers with the right offers at the right time to maximize profitability.
Put the power of relevancy behind the ads. While it can be tempting for retailers to present shoppers with loads of ads at the same time to try to maximize revenue, consumers often feel overwhelmed when presented with too many choices and then end up abandoning their purchase altogether. Even if they do make a purchase, they’re often less satisfied with their experience. This phenomenon, known as the paradox of choice, is the reason marketers should ensure customers see only messages that are personally relevant to them. In rare cases, when there's no relevant message to share, it’s actually better to show nothing at all. Machine learning technology can help brands optimize relevancy for each shopper, creating a more personalized customer experience and increasing the likelihood that the shopper will convert.

Holly Aresty is Deputy Chief Commercial Officer at Rokt, where she leads and executes the strategy for the company’s global go-to-market teams.