Should retail media sit with marketing or trade teams? 3 organizational principles
Retail media networks are arguably marketing’s favorite growth area right now – but how can brands adapt to optimize for them? For The Drum’s retail deep dive, Kepler’s Alice Rex investigates.
Retail media: marketing or trade opetation? / Lucrezia Carnelos via Unsplash
In today’s retail landscape, investing smartly in retail media is key for sustainable growth and brand visibility. As a result, retail media networks (RMNs) are rapidly growing globally. Even non-endemic brands can tap into these expanding ecosystems.
Navigating this evolving landscape requires caution to avoid potential pitfalls. Evaluating partners for their sophistication is crucial, acknowledging Amazon’s global leadership but recognizing the unique values of emerging retail media offerings. Adaptability and 'always-on' evaluation are essential in this dynamic tech environment. Robust measurement is necessary, emphasizing long-term results over immediate ROI.
But brands need to change to take advantage of this opportunity. Here’s how.
1. Restructure internal teams
Striking a balance between short-term gains and long-term brand development is crucial.
In recent years, RMNs have jumped at the chance to monetize their data. The opportunity this has provided to advertisers has been fruitful. As the landscape matures, brands must focus on collaboration between retail trade and digital marketing teams.
Typically, marketing teams sit separately from their sales and vendor counterparts – with different stakeholders and budgets to manage.
Industry-wide, there are still differing opinions on where in the marketing mix retail media sits. Traditionally, trade teams have owned these relationships. But now that ad and measurement capabilities are expanding, many marketing teams are claiming this falls under their purview.
Often, the networks themselves will have different ad and vendor arms with little overlap in client contact and expertise, further complicating the equation.
Solving this is not simple, but those who will win in this (not so new) frontier are those who collaborate. It’s vital to have strong e-commerce leadership internally, pushing to marry the roles and responsibilities (and budget and strategy ownership) between retail and advertising. Both cross-discipline upskilling and business-focused alignment are important.
2. Forming a global strategy, implemented locally
Vendor relationships will likely predate advertising, so cohesion is important. These trade agreements should ladder-up in a broader strategic direction. And not all regions are created equal; locally-led nuance should inform buying and advertising.
A one-size-fits-all approach won’t work. A global strategy will be foundationally important to determining the value of RMN advertising, aligning on measurement, core KPIs, and general strategic investment. But local nuance overlays are important. Best practice can vary by market and category, prioritizing different products. Marketing calendars and consumer habits vary.
The RMNs themselves also carry different weights by market. Amazon may well be your top customer from a vendor perspective and your top revenue generator, but if, say, Latin America is a key market for you, you simply cannot replicate your US or UK strategy here.
Each market will need a nuanced approach based on the number of and maturity of RMNs, consumer behavior and individual market retail relationships which could impact advertising needs. While Amazon dominates in the US and the UK, and is the most advanced in terms of capability, its very recent growth into EU markets present some attribution challenges and isn't as impactful as some home-grown grocery stores in smaller markets. For example, Belgian shoppers favor the French Amazon marketplace and Dutch shoppers rely on their native Bol.com over Amazon.
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3. Create a cohesive advertising and media plan
With the consumer at the center and personalization more possible across all advertising efforts, it makes sense to combine all of this at the source. Some categories will find it easier than others; grocery stores, for example, can take advantage of sponsored product placements on grocery retailers.
Include the advertising team to ensure the retail media strategy is cohesive and aligned to other marketing activity. Individually hero-ed products or deals on-site will likely increase your returns from that budget, but strategizing with the marketing team can make sure that other avenues are explored: are in-store points-of-sale aligned? Is your influencer strategy priming your audience for your product and pushing to the retailer of your choice?
Enabling sales teams to seek out advertising opportunities and plan media holistically and flexibly will help brands break through these opportunities. Sharing data and insights cross-functionally will lead to further business progress. Updated client lists can be translated into media audiences, and lookalike audiences and advertising metrics can help sales teams.
Meanwhile, analyzing media performance can draw on insights such as pricing where they’re not competitive or can lead to product innovation based on consumer behavior.
This fundamental shift to ways of working may take time to adopt, but the brands and advertisers who embrace this will be able to capitalize on the immense value retail media networks offer.
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