Consumer experience: Is it forgotten in the Retail Media frenzy?
Retail media has seen a surge in popularity in recent years. Retailers, brands, and shoppers all reap the benefits of retail media; with retailers creating better shopping experiences and more revenue, brands gaining access to a new, untapped advertising channel to target in-market customers, and shoppers enjoying more relevant and personalised advertising.
The retail media market is predicted to grow 25% a year to $100 billion over the next five years and will account for over 25% of total digital media spending by 2026, according to Boston Consulting Group (BCG). There are considerable opportunities, and more and more retailers are getting involved, developing their own networks, and working with technology partners to provide retail media services.
However, the consumer experience is often overlooked in the retail media scrum. As an industry, we are getting caught up in the hype around the latest offerings and developments, so much so that we could ignore the fact that fragmentation could lead to poor advertising experiences and frustrated shoppers.
Data from a recently launched Epsilon/CitrusAd State of Retail Media study of senior executives from retailers and brands at mid-to-large-sized enterprises found that brands and retailers feel the effects of fragmentation, with inconsistent targeting and disparate reporting across channels and campaigns, which leads to inefficiencies.
Ultimately, shoppers pay the price, with 64% of study respondents agreeing that retail media networks with multiple technology providers have a negative impact on shoppers and result in a poor advertising experience for consumers.
When working with multiple partners, it can be hard to know which shoppers are interested and which have already been messaged (or that they even want to hear from a brand in the first place). It can lead to wasted impressions and very frustrated shoppers. So, minimising the number of providers can help to improve consistency, measurement, and the ability to sequence messages.
At least half of retail media networks do not target or measure efficiently. Yet performance can be significantly improved with effective cross-channel targeting of real people instead of devices. To create a comprehensive understanding of each shopper, it is essential to have the capability to view them at an individual level. Without this, there's a high chance of the shopper experience declining due to over-messaging.
To provide brands with the personalisation, relevance and performance they are looking for, retail media networks must be rooted in a strong, people-based identity solution (not modelling) capable of spanning multiple devices and channels.
In addition, brands and retailers are not using the open web's ability to reach shoppers to its full potential, with just over a third (37%) of retailers currently using off-site programmatic advertising methods for retail media monetisation.
Off-site programmatic advertising allows brands to reach shoppers wherever they are online - but only if it's done with high levels of accuracy. To achieve the best shopper reach, brands must communicate their off-site programmatic needs to retail partners and focus on messaging people at the individual level.
Good technology is fundamental to good retail media. But ultimately, it’s about the consumer experience. When we put the individual shopper at the centre of the advertising, everyone wins.
* In partnership with global research and analytics firm Phronesis Partners, Epsilon conducted the study to gain insights into their perceptions of retail media networks and the current and future state of the industry. The study was conducted in Q1 2023.