The first great wave of marketing was search (search) that dominated the decade of the 2000s, followed by the second wave of social networks, dominated by Facebook. The third great wave of marketing is called retail media and it is expected to have accelerated growth in the coming years. The above in accordance with the publication made by Insider.
Retail media is digital advertising displayed on assets owned by retailers and on channels operated by third parties and other digital content, which is powered by using customer purchase data. Some names that already do it in a notable way are Amazon, eBay, Target, Walmart, Costco, to name a few. In this advertising model there are three actors: the advertisers who have traditionally been the CPG’s (consumer packaged goods), the consumer and the retailers.
For the CPGsthis technology is changing the way brands interact with customers because it allows them to take advantage of the retail sales force to drive sales and improve the visibility of their products, connecting with consumers and achieving sustainable growth. for buyers (shoppers) is relevant because they obtain offers and personalized information, improving the shopping experience and greater satisfaction with the brand. Los retailers they also benefit by providing relevant and informative content to their clients, allowing them to segment audiences by their consumption patterns, facilitating the generation of advertising revenue by offering targeted ads and facilitating CPGs to reach their target audience directly, which helps to optimize the ROI of advertising campaigns.
It is important not to confuse retail media and trade marketing. The latter is the one that typically runs between retailers and CPGs. It can be seen when a customer goes to the supermarket and sees brand advertisements on shelves, aisles and other spaces. Obviously, these advertising spaces are marketed, but the budget that ends up paying for that advertising is that of trade marking. Instead, the budget used to invest in retail media comes from the digital advertising bag.
Finally, it is worth noting that, in order to maximize this advertising initiative, retailers must have information on their consumers, that is, zero and first party data, and have the ability to track individual purchasing behavior. This is where it becomes essential to know who the customer is through a purchase identifier, which is normally enabled by legal programs. It is not a condition, but by having it, the retail media strategy becomes even more powerful. Similarly, loyalty programs can broaden the spectrum and reach of retail media by bringing other advertisers, beyond CPGs, to also use this advertising channel. Here, everything that is commercialized becomes incremental income.
In short, retail media is an increasingly important tool for all parties involved: CPGs, buyers, and retailers. It offers personalized content to optimally meet the needs of the entire ecosystem, enhancing the presence of the product with an omnichannel approach and generating incremental advertising revenue for the channel owner.
*Column written in collaboration with Jorge Balandra Garcia
