Retail media’s evolution: How retailers are finding a way to break in and stand out

Last year was monumental for retail media as it established itself as a game-changing force with little sign of slowing down in 2024. Figures from IAB Europe predict retail media spending will surpass traditional linear TV in Europe in under two years, reaching a massive €25 billion. 

As many advertisers scramble in the wake of Google’s ongoing phaseout of third-party cookies, retail media’s wealth of high-value, first-party data is increasingly enticing. Eager to maximize ad performance, marketers and agencies are setting their sights on the addressable, receptive-to-purchase audiences these networks offer. At the same time, mature retail media networks currently using cookies for off-site retargeting are moving quickly to future-proof their off-site targeting through clean rooms and similar cookieless alternatives.

Retailers are embracing this exciting and lucrative channel to transform themselves into media-owning powerhouses at breakneck speeds. The retail media map recently published by IAB Europe demonstrates how much retailers have embraced this trend. However, the map highlights how this has resulted in a fragmented landscape. 

Establishing an RMN, however, is challenging. Retailers must grapple with data privacy concerns, the costs and resources required to implement necessary technologies, and how they’ll differentiate their offerings in an already crowded ecosystem. However, savvy retailers recognize they can’t avoid retail media in their mix; the opportunity to capture the ad spend of RMNs is too great to miss.

A retail media tech stack requires sophisticated features, including a self-service layer

Retailers looking to leverage RMNs and keep up with their evolution may be one step ahead if they already have an in-house advertising tech stack. Unfortunately, only a few ad tech vendors are set up to operate purely on first-party IDs and data instead of third-party cookies, which will soon disappear. 

So, whether a retailer has an in-house system or is looking for one, they’ll need to ensure they know what the ideal setup looks like. A proper tech stack allows retailers to move beyond simple CMS booking and introduce more sophisticated and profitable ad products that offer reporting, insights and better control and optimization options. 

Subsequently, layering a self-service feature on top takes a retail media offering to the next level. It is an important step to enable additional spend by driving up demand from as many suppliers as possible, such as using the long tail concept (selling low volumes of hard-to-find items to numerous customers instead of large volumes of a reduced number of more popular items). It also means they can tap into the media budgets usually assigned to media agencies. 

Revenues grow when suppliers can optimize daily, foster innovation and diversity directly and promote healthy competition among suppliers through bidding. This approach also opens up increasingly robust sales reporting for more effective campaign evaluation.

Retail media needs to be fully integrated and omnichannel

The quintessential retail media space creates an environment where retailers can connect with their customers throughout their buying journey. And, this is the gold standard of retail media innovation: the integration of digital and physical extensions and the seamless merging of out-of-store and in-store interactions. 

This requires a sophisticated, multi-environment-enabled ID solution that seamlessly integrates across channels, including on-site display, sponsored product listings, off-site display, in-store screens, email, social media and connected TV. These solutions provide a consistent, omnichannel customer experience and enable a comprehensive view of consumer behaviors. 

Retailers of all sizes can’t afford to miss out on the increasing popularity of retail media. This strategy will take their advertising game to new heights. Retailers succeed when they can pair a meaningful investment in sophisticated technology with a workforce trained in the necessary skills to use it. A talented and well-trained team is essential to navigating the intricacies of retail media, ensuring its seamless integration and optimal performance. 

As retailers look to stay ahead of competitors in 2024 and beyond, establishing a solid retail media strategy will help them change the advertising game and deliver the results advertisers seek. 

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