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What is retail media? A comprehensive guide for CPGs.

5 minute read

Retail media has emerged as a transformative force in the consumer packaged goods (CPG) industry, especially within the supermarket sector. As ecommerce continues to grow, understanding the dynamics of retail media networks is crucial for ecommerce managers looking to optimize their brand’s visibility and sales. This article explores the concept of retail media, its benefits, challenges, as well as strategies for leveraging these networks effectively. 

What is retail media

Understanding retail media in the supermarket sector

Retail media refers to advertising within a retailer’s ecosystem, both online and in-store, allowing brands to reach consumers at critical points in the shopping journey. In the supermarket context, this means utilizing the retailer’s digital platforms—such as websites, apps, and electronic newsletters—as well as physical touchpoints like digital endcaps and checkout screens. 

The growth of supermarket retail media networks

The rise of supermarket retail media networks is fueled by the digital transformation within the grocery sector. As consumers increasingly turn to online grocery shopping, supermarkets have responded by developing sophisticated digital advertising platforms. These networks are designed to provide CPG brands with precise targeting capabilities and valuable consumer insights, driven by robust data analytics harvested from shopper behavior and preferences. 

How retail media networks enhance brand visibility on the digital shelf

Utilizing retail media networks allows CPG brands to place their products in front of consumers who are already in a buying mindset. This is particularly effective in the supermarket sector, where purchase decisions are often made impulsively and can be influenced by timely and relevant advertisements. 

Benefits of retail media for CPG brands

The main allure of retail media lies in its ability to drive sales while enhancing brand loyalty. Here are some of the key benefits: 

Targeted advertising

Retail media networks offer advanced targeting options based on real-time data, including purchasing history, search behavior, and demographic information. This allows CPG brands to tailor their marketing messages more effectively.

Improved ROI

Advertising through retail media networks often results in higher return on investment compared to traditional advertising channels. The proximity of the ad to the point of purchase reduces the consumer's journey, potentially leading to immediate conversions.

Data-driven insights

Supermarket retail media networks provide access to a wealth of data, enabling brands to refine their marketing strategies, predict consumer trends, and better understand the effectiveness of their ad spend.

Challenges and considerations

While retail media offers numerous advantages, there are challenges that ecommerce managers must navigate: 

Complexity of platforms

Each supermarket retail media network has its own platform with distinct features and capabilities. Brands need to invest time in understanding these platforms to optimize their ad placements, or find a digital shelf service provider they can trust. Amazon, for example, has a highly unique sponsored product/ retail media model.

Cost implications

Competing in popular retail media networks can be costly. Brands must balance their budgets against the potential high costs of bidding for premium ad spaces.

Integration with overall marketing strategy

For maximum effectiveness, retail media should be integrated with a brand's overall marketing strategy, aligning digital and physical advertising efforts for a cohesive consumer experience.

Strategies for success with supermarket retail media networks

To leverage the full potential of supermarket retail media networks, CPG brands should consider the following strategies: 

Leverage first-party data

Utilize the retailer's first-party data to customize and personalize advertisements to meet the needs and preferences of specific consumer segments.

Optimize for mobile

With the increasing use of smartphones for online shopping, ensuring that retail media ads are optimized for mobile devices is crucial.

Engage in collaborative partnerships

Work closely with supermarket chains to develop exclusive promotions or co-branded campaigns, which can enhance the visibility and attractiveness of your products.

Rely on location-based analytics

To optimize retail media ROI, it's essential to cross-reference the dates campaigns are running with store-level out of stock rates to be sure the products being promoted are actually available.

Looking ahead: The future of retail media in supermarkets

As technology evolves and consumer behaviors shift, the landscape of retail media will continue to expand. Innovations such as augmented reality shopping experiences and the integration of artificial intelligence for predictive analytics are on the horizon. For CPG ecommerce managers, staying ahead in this dynamic environment means continuously adapting strategies and exploring new opportunities within supermarket retail media networks. 

Retail media is more than just advertising; it’s about creating meaningful connections with consumers at moments that matter. By effectively utilizing supermarket retail media networks, CPG brands can enhance their market presence, forge deeper consumer relationships, and drive substantial growth. 

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