In-store retail media is still in its early stages, and its effectiveness shows across various retail segments, particularly in grocery stores and superstores, in addition to warehouse clubs and convenience stores, among others, RJ Hottovy, head of analytical research, Placer.ai told FoodNavigator-USA.
Popular platforms include Walmart Connect, Target Roundel, Kroger Precision Marketing and Instacart Ads, where the retailers’ platforms provide valuable first-party data that allow brands to create targeted ad campaigns and potentially measure its effectiveness more accurately.
‘Retail media is great – for retailers’
For CPG brands, retail media networks (RMN) provide consumers with personalized messaging based on dense shopper data, offering invaluable insight to purchasing behaviors. Mike Ford, CEO of Skydeo, a data platform that helps advertisers find and reach their target audience more efficiently, emphasized the financial benefits for retailers without having to sell more products.
“Retail media is great – for retailers,” he told FoodNavigator-USA. “They can leverage valuable in-store and online data to create a targeted advertising channel, generating a significant boost in profits.”
He added, “Retailers go through a lot of work — real estate, inventory, marketing, labor, insurance — … all to make 3%. Becoming an ad network lets them cash in on a high margin business with ten times the profit.”
However, Ford also acknowledged the potential conflicts for retailer teams. “For the retailers themselves, there is inherent conflict for inventory onsite between the ads teams and the ecommerce teams,” he said.
He emphasized that balancing both department’s needs while maintaining a seamless customer experience is crucial.
RMN ads show higher engagement, despite CPG brands’ hesitation to ‘buy virtual shelf space’
Some CPG brands may meet RMNs with hesitation as they are expected to “buy virtual shelf space” through ad placements, Ford said.
However, Paul Brenner, SVP of Vibenomics, an in-store digital advertising provider, emphasized the potential for increased engagement in-store.
“Food and beverage brands frequently ask how they can… deliver a personalized customer experience similar to what is available via online platforms, without access to third-party data,” he explained to FoodNavigator-USA.
RMNs offer a solution by leveraging shopper data to deliver targeted messaging and promotions within physical stores. This can significantly increase engagement compared to traditional advertising methods, Brenner said.
Further, data by DoubleVerify shows that “ads on RMNs receive a 183% higher engagement rate” than average ad network impressions.
Technology company, CoolerX (formerly Cooler Screens), provides in-store retail media and merchandising for brick-and-mortar stores including Kroger, Giant Eagle’s GetGo convenience stores and Chevron, among others. Using AI-driven software and smart-screen sensors, CoolerX allows retailers to create in-store digital experiences that adapt to consumer behavior, while brands can connect with shoppers and activate targeted marketing messaging at the point of decision-making, as reported previously by FoodNavigator-USA.
Recently, the company conducted a survey with hundreds of shoppers across several brick-and-mortar stores and found that digital smart screens influenced the purchasing behaviors of nearly half (47.8%) of respondents. Additionally, 89% of shoppers indicated that retailer rewards and savings are easier to find using the smart screens. Cooler X CEO and Co-Founder, Arsen Avakian, explained that in-store AI-powered digital screens can offer “a more informed and relevant shopping experience,” where consumers have access to helpful information to align with their needs.
‘The key is for RMNs and brands to work collaboratively’
While retailers hold valuable consumer data, Jennifer Silverberg, CEO of SmartCommerce, a marketing tech company that turns digital touchpoints into seamless commerce experiences, emphasized a collaborative approach between in strengthening repeat purchases among consumers.
“[RMNs] can be effective by leveraging the valuable data retailers have on their customers’ purchasing behaviors. This data can help brands make more informed decisions about targeting and messaging,” Silverberg told FoodNavigator-USA.
While brands can use RMNs to provide data and audience insights, they “may be better served by using their own agencies for the media execution,” she said.
Silverberg added, “The key is for [RMNs] and brands to work collaboratively, using the data in the middle to ‘raise every ship’ and improve marketing outcomes.”