The COVID-19 pandemic has led to a tremendous increase in e-commerce retail sales and the need for retail media.
Over the past few years, e-commerce has experienced double-digit growth. The e-commerce boom can be attributed to two main reasons: the increased willingness of customers to trust online-based retailers with secure payment methods and the ability of retailers to deliver products faster without compromising customer experience.
The increase in digital interactions in today’s lifestyle means businesses must integrate and pivot faster. Otherwise, failure to do so will only lead to losing customers. Other than retailers, a retail media network can also be utilized by any B2C entity, such as financial institutions and telcos, aiming to reach a wider customer audience in a single place. In fact, the latest projections show that e-commerce retail sales will comprise over 20% of the total retail sales by 2024. Retail media advertising is also expected to account for about one in every five digital ads. Here are some things you should know about e-commerce retail media networks:
1. They offer an Additional Revenue Stream
Most importantly, retail media opens an alternative revenue stream. Since global e-commerce is a thin-margined business, advertising revenue provides a cushion to online marketplaces. If the profit margins narrow for some months, it can be a big blow to the retailer’s bottom line. However, retailers who succeed in venturing into advertisements are exponentially expanding the retail media business and giving the top advertising companies a run for their money.
2. Solve First-Party Problems
As more privacy and data security laws are enacted, retail media is helping solve the first-party data concerns for brands. Since brands heavily rely on third-party data, which will soon cease to exist, they are taking advantage of their solid customer understanding by capitalizing on online advertising. Brands can easily tap into collected data to derive customers’ interests, purchasing behavior, shopping frequency, and preferences.
3. Allow for Highly-Personalized Targeting
Retail media enables brands to achieve highly personalized targeting campaigns, effectively measure ad spending ROI and conveniently monitor SKU levels. Retail media not only increases a brand’s visibility but also makes it much easier for brands to relate spending with sales. As the potential and importance of retail media networks grow, so does the need to incorporate this revolutionary strategy in marketing and digital advertising.
Retail media’s future is indeed bright. Retailers looking to thrive in the future must invest in retail media advertising to adapt to the ever-changing buyer behavior. However, prospective brands that wish to harness this opportunity must consider building a resilient customer base using first-party data to develop a more efficient retail media network.
Retail media networks offer brands vast potential in terms of targeting options and reach. As more brands increasingly deploy strategic ads, this will further increase marketplace competition for your products.
You should carefully choose the retail media network that best suits your needs to enable a multi-channel advertising strategy that promotes your brand image and helps broaden your customer base.