What are Retail media networks and how are they expanding to on-premise

Retail media networks are a form of digital advertising that is gaining popularity among retailers and brands. In essence, these networks allow brands to advertise their products directly to consumers while they are shopping online, leveraging the retailer's customer data to create personalized and targeted ads.

The growth of retail media networks in the last two years has been substantial. In 2021, eMarketer predicted that US retail media ad spending would reach $29.99 billion, up 73.4% from 2020. This rapid growth is due in part to the pandemic, which drove more consumers to shop online and forced retailers to look for new revenue streams.

If you had any doubts, even Piggly Wiggly, a 100-year-old midwest grocery chain launched its own media network in 2022.

One of the major players in the retail media network space is Amazon. The company's advertising business has been growing rapidly, with its ad revenue reaching $21.5 billion in 2020, up from $10.1 billion in 2018. Amazon's retail media network, known as Amazon Advertising, allows brands to target consumers based on their search and browsing behavior on the Amazon platform. With over 200 million unique monthly visitors to its platform, Amazon Advertising has become a key player in the retail media network space.

Another major player in the space is Walmart Connect. Walmart has been expanding its advertising business in recent years, leveraging its vast customer data to create personalized and targeted ads. Walmart Connect allows brands to advertise across the Walmart ecosystem, including its website, app, and in-store media networks. In 2021, Walmart announced the launch of a self-serve advertising platform, making it easier for brands of all sizes to advertise on its platform.

Target has also been expanding its advertising business in recent years, with the launch of its retail media network, Roundel, in 2018. Roundel allows brands to target consumers based on their shopping behavior both in-store and online. Target has been investing heavily in its advertising business, with plans to triple the size of its team over the next few years. With its extensive customer data and strong brand recognition, Target is well-positioned to become a major player in the retail media network space.

On-premise Retail Networks

Retail media networks are expanding to digital on-premise through the use of technology that allows them to deliver targeted ads to consumers while they are shopping in physical stores. This is accomplished through the use of digital signage, beacons, and other technologies that allow retailers to track the movements of customers in-store and deliver relevant ads in real-time.

First Party Data

In addition to these technologies, retail media networks are also leveraging data analytics and machine learning to deliver more targeted and relevant ads to consumers. By analyzing customer data and shopping behavior, retailers can better understand their customers' needs and preferences and deliver more personalized messages. Machine learning algorithms can also be used to optimize ad delivery, ensuring that the right message is delivered to the right customer at the right time.

Retail media networks are using first-party data to create more personalized and targeted advertising campaigns. First-party data is data that is collected directly from a retailer's own customers, such as purchase history, search and browsing behavior, and other customer interactions. By using this data to target ads, retailers can create more relevant and effective campaigns that are more likely to drive sales.

There are several advantages of using a retail media network, including:

1. Access to customer data: Retailers have access to a wealth of customer data that can be used to create more targeted and personalized ads. This data includes purchase history, browsing behavior, and other interactions with the retailer's website and mobile app.
2. Better customer experience: By using first-party data to create more personalized and targeted ads, retailers can create a better shopping experience for their customers. Customers are more likely to engage with ads that are relevant to their interests and needs, which can lead to increased customer loyalty and repeat business.
3. Improved ad performance: By targeting ads to customers based on their purchase history and browsing behavior, retailers can create more effective ad campaigns that are more likely to drive sales. This can lead to higher click-through rates, increased conversion rates, and improved return on ad spend (ROAS).

Overall, the use of first-party data and retail media networks allows retailers to create more personalized and effective ad campaigns that can drive sales and increase customer loyalty. By leveraging their own customer data, retailers can create a more engaging and personalized shopping experience that benefits both the retailer and the customer.