A retail media network (RMN) is a retail advertising platform that allows brands to leverage retailer first-party data and advertising inventory on a retailer’s on-site, off-site and in-store digital experiences.
This insight comes from Mike Templeton (left) and Matt Riezman (right), partners with Des Moines, Iowa-based NexChapter, a consulting firm helping retailers with loyalty, retail media and digital commerce strategy. The two discussed the subject Aug. 21 in Retail Media: You’re More Ready Than You Think at CSP’s Outlook Leadership conference in Rancho Palos Verdes, California.
An RMN is enabled by strategy, internal partnerships, external partnerships and technology, and a retailer-provided advertising platform reaches relevant consumers, closest to the point of purchase, to drive engagement and sales, Riezman said.
“When you launch a retail media network, you’re transitioning from a company that sells things to a publisher, and so most advertising is purchased still from publishers or people that put up content of some sort,” Riezman said. “But now as the retailer, you are that publisher. Now the added benefit of retail media is that you’re not just selling advertising for advertising’s sake or just that revenue, but you’re also selling advertising that is relevant to your consumers. It’s close to the point of purchase, so it has the ability to drive your business and drive your sales, in addition to just being advertising on your platforms.”
Retailers are investing in retail media for several reasons, he said:
- Offer more value for customers
- Give a seamless experience
- Drive sales
- Generate alternative revenue
- Improve marketing
Advertising are investing in retail media for:
- New insights
- Premium ad units
- Precise targeting
- Brand safety
- Closed-loop measurements
The year 2021, coming out of the pandemic, is when RMNs “really exploded,” Riezman said.
“Retail media can generate alternative revenue and advertising revenue, which is something most retailers do not have before they have a retail media network,” Riezman said. “But it also drives sales and it also improves your customer experience when done right. You’re giving more value to your consumers. You’re creating a better, a more connected experience, more personalized experience.”
These networks also improve marketing and execution because “as you’re bringing more communication into your customer universe that’s more personalized, you have things start running into each other and it forces you to become better,” he said.
On the advertiser side, it’s more straightforward, as advertisers are able to access ad units that they can’t otherwise access, Riezman said.
“They’re able to access customer relationships that they can’t otherwise access in the same way,” he said. “And one thing that a lot of them really love is closed-loop measurement, so as the retailer, you can tell them, ‘I know this customer, we serve them this ad and they did this, they took this action.’”
Done right, regarding the pieces of value to retailers and advertisers, retail media starts to create a flywheel for retailers, Riezman said.
“On one side, you’re serving your customer better. The result of that is more shoppers and more frequent trips,” he said. “You get to know your customer better because you are collecting more first-party data and you are reaching your customer with more and more relevant ads. This builds on itself. Better personalization, more trips, more data. So, this starts to create a really healthy relationship, a really healthy flywheel.”
C-stores in unique position
Convenience stores are uniquely poised to do really well in the RMN space, Riezman said.
“Some of the things that c-stores have that other retailers do not is really high store density, much higher trip frequency, a somewhat unique use of loyalty, and a lot of first-party data and ad units that other channels don’t have—things like forecourt screens or pump screens,” he said. “This is a lot of unique things that, as we think about what is our place as a c-store retailer in the space, there’s a lot of reasons that c-stores are winning and will continue to win in this space. I think there’s reason to be excited.”
In developing a retail media strategy, retailers must start by deciding what is most important to them, Templeton said.
“As you think about how you’re going to look at this space, you really need to look at it through the lens of your particular brand and decide how are we going to approach it for our business, what makes sense for who we are and how we operate,” Templeton said. “There’s really four key objectives you could be thinking about, four different paths that you could go down.”
The four key objectives are:
- Helping customers see more value with relevant offers, promotions and content
- Creating seamless experiences across their channels and all advertising inventory
- Increasing retail sales in store and online to grow category performance
- Creating a new alternative revenue stream to reinvest back into the business
“If you’re focused on helping customers see more value, if you’ve got a strong loyalty platform in place, this could be something that helps amplify and accelerate the program that you’re putting in place,” Templeton said. “If you’re focused on retail sales, you might look at what’s happening inside of your stores.”
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