Retail Media Networks are increasingly essential in how retailers and manufacturers generate revenue and reach consumers with targeted advertising. These networks are effective as shoppers grapple with inflation and demand deals from all retailers, not just their go-to stores. For retailers, it’s a way to monetize and for brands, cements relationships with retailers and more directly reaches consumers in an omnichannel world. The change in Retail Media Networks has been significant in just the past few years.
I turned to John Carroll, president of digital commerce and advanced analytics for Acosta Group, for additional insights. Carroll, who held senior leadership positions at Coca-Cola and Procter and Gamble for 30+ years, brings a tenured career in CPG to Acosta Group – an agency collective aligning omnichannel retail, marketing, and foodservice agencies to provide seamless access to the company’s end-to-end solutions. The company advises 2,500+ brand owners, including over 60 one-billion-dollar-plus brands and more than 1,100 local or entrepreneur-owned brands throughout North America and Europe. Acosta Group has several agencies with different strengths – for retail media, that’s Mosaic.
In his role, Carroll oversees Acosta Group’s analytics and omnichannel work, including helping brands with their overall digital commerce strategies. They specialize in executing one plan that connects the physical and digital shelves, bringing data, analytics, strategic insights, and creativity together to solve clients’ business challenges.
Carroll offers some interesting perspectives on the state of Retail Media Networks and what brands need to consider for the future:
Gary Drenik: Why are Retail Media Networks so important to retailers and what does the landscape look like today?
John Carroll: When it comes to retail – the last five years have been more disruptive than the last 40, due to a rise in technology, demand for shopper convenience and pandemic-driven change. Our Acosta Group shopper surveys show the majority of consumers now shop both online and in-store – more than half have purchased groceries online. A recent Prosper Insights & Analytics survey adds 19% of consumers are buying online and picking up through in-store services, 18% use grocery delivery apps and 16% buy online for home delivery. Meanwhile, the other consumer half still shop in-store. Technology has changed shopping behavior as the route to market has become the “route to me,” with consumers choosing when, where, and how they shop for their weekly grocery needs.
We recently asked 100+ executive CPG leaders about opportunities and challenges and 77% told us they are planning to spend more across retail media and digital marketing. Clearly, Retail Media Networks are an essential part of the marketing plan and can be effective if done right.
Drenik: So, Retail Media Networks can work in favor of brands? And what’s in it for the consumers?
Carroll: The time is right to create a new model for a retail media partnership that benefits retailers, manufacturers and most importantly – shoppers. Over the past three years, the industry has been fixing the supply chain, keeping up with inflation, and solving for labor challenges. Retail Media Networks change relationships, starting with targeting the right shopper, with the right brands, price, and messages in ways that past analog tactics never accomplished. Retailers that provide first-party shopper data effectively target the best brands to satisfy shopper needs. There’s an opportunity for brands to focus and deliver extremely personalized shopping experiences. Some studies show that Retail Media Networks deliver an average ROI of 11:1 – credited to efficient advertising efforts, higher conversion rates and increased revenue – and loyalty and repeat purchases.
Drenik: That seamless experience is key. A recent Prosper Insights & Analytics survey shows that while 41% of people like or are neutral about targeted advertising, there is still a majority (59%) who don’t like it. So, how does Acosta Group help brands navigate their Retail Media Network strategies and ensure ROI?
Carroll: As an industry, we need to continue to show the shopper that retail media provides better value. This begins with sharp targeting and a focus on fact-based investments that achieve mutual retailer and manufacturer objectives. Brands we work with benefit from our years of experience informing brand commerce strategies, we leverage data-driven, contextual insights to plan, create, implement, and optimize media buys. As a first step, we define sales and marketing goals and create a holistic plan to achieve both.
Interestingly, retail media is shifting closer to marketing but ultimately, it has a direct impact on sales. It’s important to be close to distribution, out of stocks and understand the sales goals/challenges within each market. That’s where we come in. We’re integrated consultants that help look across the business and provide a data-driven, holistic strategy based on what satisfies the shopper – both online and in-store.
Drenik: How should brands be looking at Retail Media Networks as it relates to their overall trade spend with retailers?
Carroll: The traditional sales and marketing spend model employed by retailers and manufacturers (a pool of over $350B) needs to be redefined. Together the industry can recreate a shopper-centric joint spending model that provides consumer, retailer, and manufacturer value. Optimize the marketing and trade spend models to provide real value for each stakeholder, moving from “push/pull” investment model to an omni-shopper investment model. Incorporate traditional marketing KPIs like new to brand, lifetime value, reach and frequency along with the traditional sales KPIs, availability, selection, and promotional lift. Redefining the model will require advanced capabilities on both the retailer and manufacturer sides. Retail Media Networks are a prime opportunity to bridge the physical and digital shelf and truly leverage the power of analytics to make the most of every trade and marketing dollar, which is rightfully scrutinized.
Drenik: Now that we know the benefits of Retail Media Networks, where are they heading next?
Carroll: We’re heading towards market consolidation of Retail Media Networks, like programmatic, which started as hundreds of disparate offerings and truncated down to provide efficiencies and better value. We’re going to see a steady increase in retail media adoption and usage. During the pandemic, many organizations pulled out of in-store and focused on spending online. With many households still shopping in-store, a balanced approach and investment in both is critical. Interestingly, we’re also starting to see these worlds collide—with in-store becoming part of the Retail Media Networks as well with investment in smart check-out screens and TVs.
Drenik: Knowing that you focus on omnichannel and ecommerce, what should brands keep in mind when balancing omnichannel strategy?
Carroll: Beyond Retail Media Networks, it’s critical for brands to understand: the physical store plan is connected to the digital shelf plan. Retail Media Networks provide necessary targeting abilities and a bridge to what’s in-store, but it’s also data that the retailer owns. Given that, we advocate that brands continue to develop direct relationships with their customers. With the depreciation of cookies, first-party data will be king.
Drenik: Thanks, John, for the enlightening conversation. It’s clear that Retail Media Networks should be a part of a brand’s toolbox and strategy to target and reach consumers. Personalization will be paramount in brands’ fight for share of basket, with the breadth of choice available to consumers online and in-store. We appreciate your insight.
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