Retail media networks (RMNs) are popping up within convenience-store chains across the country. At the Conexxus conference in Tucson, Arizona, Jan. 27-30, retailers discussed what adding an RMN to their business would mean. Retailers of different sizes shared their concerns with the tech solution, and presenter Art Sebastian, CEO of consulting firm NexChapter, Des Moines, Iowa, provided insights.
The convenience-store industry serves 160 million customers daily, said Sebastian. C-stores also have the immediate consumption factor, where customers make a purchase and consume it right away, and a chain’s best customer is in the store three to five times a week. Some customers even visit twice a day, he said.
There’s $40 billion of ad spend in the U.S. to capture over the next three years for RMNs, Sebastian said.
“There's tremendous opportunity for digital reach. … We have this tremendous opportunity to engage our customers on their mobile devices when they're looking for information, they're socializing with their friends and family, or they're looking to make buying decisions,” he said. “So this is the world that we operate in today, and these consumers, they're heavily influenced.”
- For a full breakdown of RMNs, click here.
Read on to find out what inquiries retailers have about retail media.
Are convenience retailers modernized enough to develop an RMN?
Sebastian: Convenience retailers have all the ingredients. You have the foundation; you have a lot of what’s necessary to get started. There’s going to be some technological work to be done. And then there’s a whole piece around positioning and going to market. How do we build it? How do we tell everyone? And how do we capture the revenue? But it’s very possible.
Everyone who’s started an RMN has more than 1,000 stores. Compared to that, my 140 stores seem like nothing. How do we do it? How do we play when we don’t have that kind of presence?
Sebastian: Whether you have five sites, 75 sites or 140 sites, there's a sliver of that $40 billion pie that is available to you. You just have to know how to get it.
Do you think that the pool of money within a c-store organization for billboards or TV ads will decline over time?
Sebastian: There are many industry experts who will love to debate that question. Retail media is changing the way advertising and marketing will be for the next several decades. We'll probably be in about a decade of fun conversations around retail media, and then we're going to begin to see it become the way of advertising, and the old way will diminish. That’s my opinion.
Capture it. It’ll make you change your business model. If you do this and you don't drive a bunch of new revenue, at the very least, you will make your marketing better, because it will force you to put technology in place and do data properly to do marketing better, which allows us to serve our customers and drive sales.
As you build out key performance indicators, are those metrics generated for communicating with your CFO and leadership or the marketers and suppliers?
Sebastian: Both. Over time, if you don't have metrics for your vendor, at some point they're going to cut you off. If you can live without it, just know those dollars are going right next door to the next retailer they meet with. It's good practice to have some metrics.
How do you deal with not actually owning the data you collect?
Sebastian: If you find that you don't own the data—maybe the best example is that you have some DoorDash tablets in your store, because you needed to start a delivery business, and you see a little spike in revenue. Well, all of that is DoorDash’s customer, so [you need] a strategy to correct that. But the sooner you know, the better.
What do you do with customer loyalty profiles that are dormant?
Sebastian: If you have a customer sitting in your database, and they go dormant for 90 days, I’d put them in a lapse campaign and try to get them to come back. I’d have special campaigns for that. If they lapse for six months, I’d up the investment in the campaign. If they lapse for 12 months, I’d put them outside in the holding area before they go to the trash can. Otherwise, we're just inflating the numbers.
What’s the difference between a customer data strategy and an overall data strategy?
Sebastian: Customer data strategy is a subset of a full, enterprise data strategy that has foodservice data, product movement, inventory and all kinds of other data sets.
Want to learn more about retail media? Register for or sponsor CSP’s Retail Media Network Forum in Dallas April 28-30.
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