[ad_1]
When I originally wrote this post in January 2021, retail media was seeing substantial gains across big box and specialty retailers. And…it hasn’t stopped. Looking back a year-plus later, we now have two big 2021 advertising revenue numbers to work with—$2billion for Walmart and $1billion for Target—and the reality of the growth of retail media has not only set in, but is off and running.
So it was time for me to revisit my list, refresh it, re-number, and re-examine how it’s organized, breaking out the top retail media networks in four categories:
- Big Box Stores
- Online Only
- Specialty Retailers
- Drug & Pharmacy
eMarketer recently released their qualitative list, which had a couple of what felt like surprises, based on some reactions online. But overall, and as a respondent, I get it.
What is Retail Media?
Retail media is advertising to consumers at or near their point of purchase, or point of choice between competing brands or products.
Retail Media is technically nothing new. It’s the near point-of-purchase techniques of sampling, loyalty programs, coupons, and featured placements within a glossy paper catalog. Remember those? (R.I.P. IKEA paper catalog). Today, this includes digital marketing as well.
So why are you hearing so much about retail media right now?
To be frank, the industry’s revenue has exploded in terms of growth over the past several years, with the gains originally expected for a two-year period being crammed into mere months. This push was partially due to the COVID-19 pandemic and the need for contactless payments and delivery, but it’s also thanks to advancement by major big-box retailers like Walmart and Target following in the footsteps of Amazon.
12 Top Retailers and Media Offerings Compared
Just about everyone with an ecommerce site and a brick-and-mortar store seems to be in the Retail Media game today, offering (at-minimum) onsite placements like Sponsored Products. But let’s stick to the emerging players, as shown below, in no particular order. (And without Amazon since they far outpace the competition).
These chart samples are an accumulation of high-level info to give you an idea of the offerings, programs, and partnerships for comparison to help start the conversation!
Big Box, Big Investments.
Big box retailers have big things to offer advertisers in the retail media space. Here we unpack capabilities across 3 of the biggest in scale and investment—Walmart, Target, and Kroger.
1. Walmart
Up-and-comer in the online space, Walmart has developed and launched a host of programs geared toward “omnichannel retail.” The company is seeking to combine in-store and online/app-based shopping as seamlessly as they can, including in-app enhancements to guide in-store experiences (like product location and checkout), and adding web-based reviews and ratings to physical product shelves in the store.
Walmart’s suite of advertising capabilities includes sponsored search, onsite display banners, and an exclusive DSP instance with The Trade Desk.
2. Target
Target’s slow and steady growth in the advertising space continues. Advertising isn’t ‘The Focus’ for this year; they’ve been dedicated to—and sticking with—guest experience as their North Star.
Activities to support this include creating a superstar curbside pick-up offering bolstered by membership-based service Shipt, a 2017 acquisition, fulfilling store-to-door services and delivering to consumers (not just for Target but for other retailers including Peapod, Costco, Petco, and CVS.)
Roundel, Target’s internal Retail Media agency, has a dizzying array of options in the display realm alone, with managed services and self-service for those that want to pay for the privilege of the first-party data—and take that in-house and use their own programmatic platform, like DV360 or The Trade Desk.
They also have offerings that include Target social channels (Pinterest, Facebook) and Google Shopping. Add in a streamlined Circle Promotions offering in the mobile app that brands can use to offer discounts at their convenience to specific audiences (or all of Target Circle members)—and an always-on sponsored products option through Criteo—and you’ve got yourself a retail media mogul.
3. Kroger
Kroger has been BUSY. From expansion of delivery and fulfillment to their third-party marketplace powered by Mirakl, to their online partnership with Bed, Bath & Beyond, launching Instacart Convenience—and of course, keeping it real with sponsored products and banners with PromoteIQ—they’ve been making major advances, backed by Kroger’s loyalty card program that is and continues to be powerful, delivering on accurate and timely shopper insights. Targeting options via the self-serve platform with PromoteIQ is solid out of the box and includes coupon options.
They’re not stopping with onsite ads, partners, or speed either. The launch of Kroger’s PMP—a private marketplace that allows advertisers to crack into the shopper profiles and then into the DSP of their choice to activate—is just getting started.
One last note: If you haven’t asked or looked into Stratum and the reporting capabilities available to fuel your audience-seeking goals, you should.
Online Only
You don’t need a physical location to be one of the hottest locations for shoppers and advertisers alike. Here we dive into the retail media offerings from 3 digital only destinations—Instacart, eBay, and Wayfair.
4. Instacart
Instacart is everywhere—750 retailers and 5,500 cities, including partnerships with Sephora and Best Buy that break the “grocery” label. In 2020, they launched a self-service sponsored products platform that allows brands to boost that ever-important first-page visibility. A fast two years later and they added a self-service banner display option onsite, and a complete brand experience with pages that support images, videos, and product collections.
And don’t forget coupons, hero banners, and delivery promotions available through the Instacart team. They’ve also been gathering insights around new-to-brand, category share, and basket analysis that would make any brand want to double their budget over the years.
The biggest takeaway for Instacart advertising is how incredibly qualified the traffic is: a user must first sign in, enter their geography, be presented with a marketplace of stores available in that area, choose a store, and then perform a search in the store. You can’t get lower in the funnel than that.
5. eBay
After a dip in 2019, the original marketplace experienced significant growth in 2020 (largely due to the influx of online shoppers during the pandemic). Key categories continue to be a focus on eBay, especially for new items like footwear, watches (and other accessories), and electronics.
Recent partnerships with Bloq and Optoro look to bring recommerce (the refurbishment and reselling of ecommerce returns) front and center to the platform, enabling sellers to streamline retailer returns back out in the world directly through eBay.
eBay just launched a new set of advertising options, going beyond promoted listings to a CPC-based premium listing, and have been experimenting with physical retail in the form of pop-up shops like “wear em out,” focused on sneakers in Los Angeles, CA for a limited time.
They nabbed the top spot in eMarketer’s first ever “Retail Media Perception Benchmark Survey” for several components, including targeting and measurement, and platform experience. (Sorry, Amazon.)
6. Wayfair
Wayfair’s sponsored product offering has been around since circa 2019 and is a homegrown solution. If you’re one of many brands selling through their home goods marketplace, it could be the boost you’re looking for, especially around key dates like Way Day and Amazon’s Prime Day Events.
While fairly straightforward to use, Wayfair’s offering is unfortunately a best-kept secret. And while it doesn’t have the volume of Walmart or Amazon, it certainly has its niche audience, along with a massive marketing machine backing it to bring users to the site across email, social, app, push notifications, and their Pro program. They boast on site about their own advertising budget, about $450m per year, to bring shoppers to Wayfair.
Another interesting note is the depth of their investment in Standard Display, Waylift and Waystack—an algorithm they developed and adopted to power decision making in contextual advertising at scale. There’s even a blog post or two, detailing how it works.
Specialty Retailers
Specialty retailers have a lot to offer brands and advertisers, with incredible reach and unique advantages that are not to be overlooked. Here we explore 4 of the most impressive specialty store retail media networks to consider—Home Depot, Best Buy, Ulta, and Macy’s.
7. Home Depot
Early to the game, the Home Depot enabled house projects and improvements with buy online/pick up in-store and, of course, advertising on-site via PromoteIQ for sponsored products and banners. This is in addition to email services through WorldData, a third-party partner that enables a partial self-service capability.
Their program, Retail Media+, includes additional offerings in programmatic (using Home Depot’s first-party data), social (like Pinterest and Facebook), and Google Shopping options. Home Depot vendors can take advantage of these offerings any time of year, or during home improvement-themed seasonal sales events such as Spring Black Friday or other holidays. They’ve also struck a deal with Walmart’s GoLocal program for last mile delivery.
Home Depot boasts thousands of brands in store and online, so if you’re looking for a supplement to your big box retail media, this is a diversification to consider.
8. Best Buy
The beginning of 2022 brought with it a Best Buy Ads refresh, officially kicking off the program’s new name and revamped offerings. Best Buy continues to be a non-CPG staple on Instacart (yes, you can get that TV delivered today), and their curbside pickup option is still a winner.
Notable is the expansion of the free My Best Buy loyalty program, and the paid subscription service of Best Buy Total Tech. Both are great at collecting first-party data, of course. Their bets, like the acquisition of Great Call (a senior-focused tech company with assets such as the Jitterbug phone and medical alerts), are set to benefit the company not only in the long-term (per the plan), but in the short-term as well (as retail media growth accelerates).
Best Buy’s vast collection of first-party data (compiled over the last few decades), paired with over 1,000 brands and tech support services, indicates there’s more here than you might think in terms of potential retail media opportunities. By having an aging population focus, and tech services with their products, they’ll build stickiness with consumers in a space with less competition and a long-term outlook.
9. Ulta
Formerly known as DMPP (Digital Marketing Partnership Program), a newly branded and expanded UB Media hits the scene in mid-2022 with their 37 million loyalty members that make up largely 95% of their sales. (Don’t forget to connect that Ultamate Rewards Card to your Target Circle account either, so you get credit for those Ulta stores within Target store concepts!)
Sponsored products in key page and results placements powered by Criteo have been effective in bringing eyeballs to brands in need of a boost, especially with the ultra competitive beauty category bursting forward with what seems like a new brand-to-watch every week.
A managed UB Media offering to harness 1P data in programmatic and social channels (like FB/IG and Snapchat) allows brands to get specific with the existing audiences at Ulta, and find new ones, digging into that loyalty card information at different loyalty levels (like Diamond and Platinum), and leaning in heavy to fan-favorite retailer seasonal moments like Faul Haul, Skinfatuation, and 21 Days of Beauty.
10. Macy’s
Macy’s Media Network—featuring self-service capabilities for sponsored products through Criteo, and a long list of managed service options that target 1P audiences across category, complementary category, previous purchase behaviors, contextual and more—has a couple of stand out features.
In addition to the decades-old Star Rewards loyalty program loaded with customer data, the average price point at Macy’s makes it amenable to credit card or Macy’s card payments. This helps close out the loop as well as the lazy load feature of the website, meaning that impressions actually count when the user sees them. (Not all retailers are on the up-and-up with the MRC standard.)
Macy’s is also still very much the leader in the fragrance and prestige skincare spaces, and bring with them a stable of private label brands in the apparel space. Additionally, Macy’s hosts an online store-within-a-store assortment with partner Toys ‘R’ Us, and supposedly we’ll see expansion of self-service advertising options in the near future.
Macy’s Media Network is a heavily managed service today outside of sponsored products, but the insights and connections to previously-run campaigns (same brand and across the category)—and comparing what’s worked and what hasn’t—is a part of their DNA.
Drug/Pharmacy
When it comes to drug and pharmacy retailers, one of their greatest advantages is locations, locations, locations. Simply put, they have a lot of them! And with click-and-collect sales on the rise, they also have a lot of eyeballs on their websites from shoppers planning to make a curbside pickup. Let’s dive into the retail media offerings from 2 of the strongest in the space—Walgreens and CVS.
11. Walgreens
Boasting a 9,000+ storecount, and a revamped myWalgreens loyalty program, Walgreens has entered the retail media fray with a sponsored products partnership with Criteo for onsite, “traditional” managed service options, and most recently (and interestingly), a PMP deal with The Trade Desk and Open Ap. This allows a self-service helping of their 1P data without the managed burden of timing, restrictions and minimums, putting the ability to reach a Walgreens customer that much closer.
One particular thing to note is that when you have that many stores, geographic targeting becomes a much more important component, as a Walgreens customer may have more than one location that they frequent (i.e. one near work and one near home).
Don’t worry though; they’ve got that covered. Unlike many other retail media networks, Walgreens can divide and conquer. Online traffic is relatively low, as you might expect, with most shoppers going into a physical store for those everyday, drugstore-like items rather than going online and checking to have them shipped. There is a strong curbside pickup program to accompany the online sales behavior; just plan on 90%+ of the sales being and continuing to be offline.
12. CVS
CVS launched the CMX Media Exchange in late summer 2020. An advertising network that allows advertisers to target ads across channels using a myriad of placements is looking to join the fray with their ExtraCare loyalty program’s rich first-party data.
While CVS.com might not be where the majority of their customers shop today, customers most certainly use that ExtraCare card both offline and online. Add in activities to further close that loop—like Instacart for last mile delivery, sponsored product options with Criteo, and the ability to do programmatic display onsite, offsite in their private network and social media marketing options—and depending on your category, you may find yourself a fan. And don’t forget their paid Care Pass program, which focuses heavily on folks with many prescriptions who may need them delivered.
CVS also has over 9,000 physical stores, meaning that most sales will be in-store, and could even be across multiple locations. Additionally, CVS serves as a store-within-a-store through their partnership with Target.
And that’s just 12 top networks to explore. I could keep going, but I’m pretty sure you have other things to do. Simply put, the why of retail media networks has not changed. But the where and in what continues to fluctuate as each brand tries to navigate what’s best for them, and builds out a framework that can work with whatever the next year brings. Or doesn’t bring.
2022 Recommendations to Build On in 2023
- Tech Stack: Define and invest in your technology stack as best you can. Starting at the beginning, consider what you already have in place, and what you need. Where do you need information to live, come in, and be accessed from?
- Analysis and Insights: More variables are coming, more shiny objects, and if you’re waiting or hoping the retailers are going to produce what you’re looking for—you’re going to be waiting a long time. Keep in perspective that the reality we live in today is really only about 3-years-old, and we have this habit of comparing things to Amazon, Google and Facebook, as these giants have proven what can be done. While true that most things are possible, a retailer has greatly divided attention, and a necessary continued dedication to the classic in-store framework it operates 90%+ of its business in today.
- ASK QUESTIONS. Ask for what you want or need (EVERY time.) Make no assumptions that what you’re seeing is all there is, or that you have to draw a definitive business conclusion every time. Some campaigns will seem too good to be true; they probably are. Dig into the measurement to determine if you’re truly seeing the full picture, or something closer to half?
Why Invest In Digital Retail Media?
Digital retail media has been ramping up for several years. Retailers recognize the need to not only offer experiences and convenience to compete with other ecommerce sites, but to meet the needs of brands to reach consumers in those digital spaces not previously permeated with advertising.
Google and Facebook post humongous numbers in advertising revenues on their properties—followed quickly by Amazon, indicating that not only is there demand but also profitability in digital advertising. You could say the biggest driver of why is money. It always is. And it helps pay the bills for the investment in tech.
Power to the First Party
It’s all about the audiences. Retailers have amassed years of loyalty data through programs with perks, points, and personal information. While previously leveraged in a slow-to-scale (and rather impersonal) way, retailers can harness “people as data sets” with considerably greater relevance, and higher-quality targeting, to appeal to brands looking to generate new-to-brand buyers, foster loyalty buyers, and close the proverbial loop.
We’re now starting to look at audiences over channels. A single customer can exist in all channels (social, programmatic, Google, email, local), but how do you reach them at an efficient rate? How do you retain and engage them? Is the answer having eight different budgets and making a wish? Or is it to think about how a customer’s journey takes place, and to create touchpoints for when and where they are? (Hint: It’s the latter.)
If you think of it at the retailer or channel level—are all those audiences created equal? (For example, lapsed brand purchasers at Walmart versus Target, or the social audience of CVS compared to Ulta). They are all charged at different rates, have different reaches, and perform at different levels.
Technology, organizations, and hierarchy have to match the shift in retail media to audiences and the channels that host them. And that kind of change is hard and takes longer than six months, especially in legacy organizations that might have thought they would have more time to adapt. The acceleration from COVID-19 is estimated to have moved up this timetable by two years, which will put additional strain on these needed changes and adaptations.
Also, are massive changes to Personal Identifiable Information (PII), the buying/selling of data, privacy concerns in recent legislation, and cookie crumbling playing a part in this as well? Sure. But that’s the long and slow game. That’s not a growth game; that’s a compliance game.
Make Friends or Buy New Ones?
Some retailers are a bit behind on the technology front. How do they close the gap? After all, they are retailers, not technology companies. It’s expensive to employ a team of software engineers, data scientists, and wizards, as well as the infrastructure needed to host, maintain, and innovate to keep up with demand and differentiate.
So, you buy existing technology, dig deep to make it, or strike strategic partnerships with the latter two emerging as the path forward for now. Every week there’s an announcement of an acquisition, a preferred partner, or a chain of software platforms to execute on a media type. For example: PromoteIQ, Criteo, and Quotient—all working directly with retailers of all shapes and sizes to enable different types of digital media— most commonly, sponsored or featured products. Makes sense. Building an ad network is not a small undertaking.
Amazon and Walmart are creating an empire of tech that their offerings sit on top of, and expand far beyond sponsored products into programmatic/display, video, and AI-enabled units at scale. They also have hundreds of billions of dollars. Walmart’s playbook has been a combination of building (Media Group, Walmart Plus, Walmart Fulfillment Services), buying (Joyrun), and all of the partnerships, notably Rover.com, thredUP, and Shopify.
Smaller or more specialized retailers like Target, Kroger, CVS, Best Buy, and Home Depot have found their path forward by staying the course as a go-to destination, but also by integrating with partners, building on their first-party data/audiences, and diversifying their offerings to include social media placements, private marketplaces for programmatic, email placements, search engine advertising placements, and onsite offerings through those partnerships. (Walmart does have some of these as well.)
And then, of course, there’s Instacart—everyone’s best friend for delivery and partner extraordinaire—with the exclusion of Target, which bought delivery competitor Shipt.
3 Expert Retail Media Recommendations
As with all advertising initiatives, there is a lot to consider when adding retail media to your marketing mix. But there are certain elements to hone in on for the greatest success: budget allocation, retailer relationships, and streamlined reporting.
Budgets
“Where is the money going to come from?” is the most common concern I’ve heard. It’s important to know that some budgets may be tied into different groups within a brand. I have also seen budgets that simply didn’t happen due to COVID-19 (for example, if you were planning on having samples in-store). If you haven’t started the conversation for 2023 budgets, the time is now. Most are still trade or shopper marketing dollar funded.
Retailer Relationships
Retailer relationships are tricky sometimes. Do the math, and push back if the audience size/return seems too good to be true. Have a general idea of what is possible and what is an “investment” and always ask for more in the metrics department. They’ve never done this before, so don’t assume that it’s not available because it’s not important. Assume it’s not available because no one else asked yet.
Aggregate Reporting
There’s no one tool or answer to help you compare and contrast that isn’t Excel or a custom database type solution. While you might only have a handful of flights under your belt today, it won’t always be that way. Getting things out into a format where you can review CPMs, average ROAS, audience types, and then cross-reference that against other retailers, will give you a much better sense of the audiences as they move around, and helps you decide where that next dollar is best spent.
The Bottom Line
So now that you have all the information, where do you go from here?
The world of retail media is dizzying at times—especially when you expand your thinking beyond retail media into the greater mechanics and interplay of the retailers themselves, including private marketplaces like Target Plus, Mirakl, and private label brands that sneak in onsite retailer search results. (And that is just the online piece.)
The next rabbit hole of retail media is: How do you connect an in-store transaction to an online ad on a regular basis?
The answer tends to be an investment and structural change that can handle this audience-based approach over individual retailers or channels and their ROI/ROAS.
Editor’s Note: This post was originally published by Elizabeth Marsten in January 2021 and has been updated for freshness, accuracy, and comprehensiveness.
[ad_2]
Source link