Retail media is gaining ground as a new marketing strategy

Retail media is gaining ground as a new marketing strategy, as brands increasingly shift their shopper, trade, and brand marketing budget to this channel.

A new report by ANA discovered that marketers are conflicted when it comes to advertising on Retail Marketing Networks (RMN). However, these mixed feelings do not affect the popularity of this marketing medium. Using RMN to reach the correct kind of audience seems like a good deal. So why are marketers hesitant?

The survey for this report was conducted in two parts. The first one included a poll taken by 138 members out of whom 80 utilize RMN. The second part of the survey included a follow-up where insights were gathered about their perspectives toward RMN.

As a result, it was found that two-thirds of the respondents use RMN simply to drive sales. Only 12% of the respondents use the medium to gain brand recognition. The audience around RMN has only one purpose - buying.

Retail industry leaders have identified a new and potentially lucrative source of revenue through RMNs. By offering advertisers access to their audiences and website traffic, retailers can create high-margin revenue streams. They can also increase their overall operating margins, which can range from 50% to 70%.

This shift towards RMNs has proven to be a game-changer for retailers with historically low single-digit margins. They are now able to monetize their shopper touchpoints, interactions, and intelligence. The result is a significant increase in their economic potential and a new avenue for growth.

The secret behind the growth of RMN is simple - the Covid-19 pandemic. Since the pandemic caused a shift in consumer shopping habits, it led to a significant increase in online traffic and transactions for retailers.

Retailers are leveraging these new channels to reach and engage with consumers in innovative ways, remain competitive, and meet changing consumer needs in the evolving retail landscape.

It seems like the downfall of the third-party cookie kingdom is also adding to the shift in brands focusing on building their first-party platforms. And who owns the first-party data forte? RMNs.

While RMN is the upcoming trend, brands need to approach retail media with a strategic mindset and partner with retailers that align with their values and target audience. Brands must also consider privacy concerns and ensure that their use of customer data is transparent and in compliance with all relevant regulations.

The report also highlighted some of the shortcomings of the trending medium. These include the lack of standardization and not being fully optimized to deliver KPIs. While some brands believe that RMNs are bound to cause brand values to decline, most brands are optimistic about the growth of this powerful marketing tool.

Overall, the trend towards RMNs is a promising development for both retailers and advertisers, as it offers a new way to unlock economic potential and drive growth in the rapidly evolving retail and marketing landscapes respectively.

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by Arooj Ahmed via Digital Information World