The rise in retail media is one of the hottest topics in marketing today. There has been an estimated 80% increase in shoppers buying via online retail sites and apps, largely as a result of the Coronavirus pandemic. And with that comes a related increase in spending by brands advertising on those same sites. There’s little doubt that retail media’s increased strength and efficacy will only continue as partial and full lockdowns persist. But, what insights are there based on the huge amount of data this growth has generated and how will retail media develop in 2021?
Michael Greene, the VP of Global Product Solutions, Retail Media at Criteo is uniquely well placed to discuss this in a fireside chat with The Drum’s co-founder Gordon Young. For so many big box retailers, digital has become their primary channel for reaching consumers and selling goods. But, as Greene says, the costs of operating an e-commerce retail business are underestimated and selling advertising helps mitigate those costs greatly.
It is not as if the trend began with the pandemic. Amazon has come from nowhere to become one of the top five media owners in the world, creating a template that others are following. The chief attraction is an advertising channel at the point of purchase, where consumers can be influenced where it matters most. And, crucially, be able to measure the effectiveness of that advertising spend.
Retail media took advertising share from other video-based content forms, particularly during Q2 last year. There were two discernible drivers, says Greene. There was the inevitable shift in ad dollars that would have been spent on in-store promotions, signage, and other physical forms of advertising. And, there was also a shift away from broadcast media spend around cancelled events such as the Olympics towards more measurable media.
This growth has occurred at both ends of the spending spectrum. Big-ticket items, such as video games consoles and other electricals, that were once mostly the preserve of big box stores, are now being sold via online-only promotions with limited availability in-store. By contrast, smaller grocery spends – such as essentials bought on the way home from work – have now moved online, with the result that grocery retailers and supermarkets all over the world have seen a huge increase in credit and debit card spends.
Greene reports that retailers have stepped up to meet this new opportunity, slashing delivery times from over a week to “next-day” and normalising the concept of click and collect services. This hybrid version of e-commerce services had fast become the norm – and that is a trend that is set to stick. And it’s not just click and collect, but retailers improving their app experience inside the physical store to enable shoppers to navigate their way around better and also to help with streamlining the check-out experience.
Retailers are also integrating ad offerings within those same mobile apps making them complementary rather than parallel experiences. It’s part of a more general move to integrate data measurement from e-commerce channels. In-store physical sales and loyalty programmes where consumers have opted in. This omni-channel accountability is, to Greene’s mind, a major trend to look out for in 2021. Another is marketers building specialised e-commerce functions linked to enhanced product page specifications. And this refocused advertising integration will be linked to search through SEM and SEO.
Greene cites Unilever as an example of an FMCG owner that has really stepped up its move into e-commerce, particularly working with its retail partners like Boots. And it is not only FMCG brands that are riding the back of the online grocery boom, but there are perhaps less obvious trends to look out for: the re-purposing of physical retailing spaces in apparel to mitigate against the expense of wasteful returns and to also act as “last-mile” delivery centres.
As with the rest of his predictions, it is clear that Greene and Criteo believe that the changes exacerbated by reactions to the Covid break-out will not be reversed any time soon. And, that the rise of retail media is central to the new way we shop, post pandemic.
Michael Greene the VP of Global Product Solutions, Retail Media at Criteo, was talking to Gordon Young, co-founder of The Drum. Register to watch the full webinar 'How retailers will win in the digital domain' here.