“Retailers will always prioritize that customer and sale over a large media buy.
When you think about the environment where your advertising would be placed, marketers trust that it’s going to be in an environment that the customer is there for a reason, they are familiar with and trust the quality, it’s personalized, and it’s additive to the experience.” — Sherry Smith, Managing Director of Retail Media, Americas, Criteo
After a nearly three-decade reign as the preferred method for tracking user behavior and fueling personalized advertising efforts, the cookie has officially crumbled. But this probably doesn’t come as a shock.
If you’re like most digital marketing pros, you likely saw the writing on the wall when GDPR went into effect. And, as consumer habits rapidly shifted in the wake of the pandemic, you’ve been preparing for the next evolution of the customer journey.
Now, as brands look for reliable ways to target consumers online and retailers seek ways to monetize their wealth of consumer data, we’re entering the new age of retail media.
Today, advertising platforms like Criteo are helping brands and retailers come together to meet their business goals in inventive new ways. And Sherry Smith, managing director of retail media, Americas at Criteo, says retailers are already primed for success.
“When you think about how [brands] are planning on placing their funds, [retailers] have the quality of the data they can trust … they've got the ability to look at the customer and how they’re behaving on and off the site,” Smith says. “As brands are thinking about where they can place that’s a trusted environment, content-rich, data-safe, good for the brand — it’s retail.”
Smith appeared on a recent episode of Unpacking the Digital Shelf podcast, “A Decade of Retail Media Innovation in One Year,” and shared how retailers can take advantage of this new opportunity — plus what the future holds for digital media spend.
Over the past few years, heavy hitters in the retail space, like Amazon, Walmart, and Target, have leveraged their abundance of first-party data as a revenue source. (A topic we covered in another recent podcast episode.)
Unlike third-party cookie data used to power digital advertising in the past, retailer’s data isn’t embroiled in privacy concerns. It’s also highly reliable, clean, and — because it incorporates every click and online and offline transaction on the path to purchase — it tells a complete story.
“Retailers are becoming the next media mogul.” — Sherry Smith, Managing Director of Retail Media, Americas, Criteo
And, as Smith points out, there are a few key factors (in addition to the benefits of first-party data) driving this trend.
With more people shopping online, brands recognize that spending trade funds on in-store opportunities is limiting their reach.
While some in-store funds will always be necessary, redirecting a significant chunk of those resources to the digital shelf will ensure they can better reach buyers at the right point in their journey. (And it’s easier to measure performance, too.)
In recent years, large retailers have attracted talent from top digital agencies and digital advertising platforms. These experts have helped retailers ensure they have the right people, processes, and technology to compete with traditional digital ad platforms and publishers.
Speaking of technology, successful retailers have invested in tech solutions and product development to establish and grow their media platforms.
In some cases, retail giants partner with or acquire existing technologies and platforms instead of attempting to build them from scratch internally.
The marketplace model further benefits retailers by allowing them to become consumers’ one-stop shop for many brands. Not only does this setup enable retailers to acquire more useful consumer data across an array of products and needs, but it also allows the brands they serve to target audiences at the precise point of purchase.
And with subscription services, retailers can offer brands a more comprehensive approach that encompasses the entire buyers’ journey.
“We're seeing new forms of media monetization. Subscription models are certainly on the rise and club memberships,” Smith says. “It's an exciting time to think about not only the data, but that a full-funnel approach that can be brought to marketers, and truly how retailers are coming together to make that happen.”
While social shopping, curbside pickup, and delivery services existed before the pandemic, those services have become even more popular throughout the past year and a half.
And while many retailers lacked the infrastructure to offer those services at scale, delivery platforms helped them bridge the gap (while also providing them with even more valuable data to support brands).
“When you look at the delivery sector, such as Instacart, Shipt, and Fresh Direct, they're partnering with retailers and offering services that these retailers just can't,” Smith says. “Smart partnerships bring them to where they need to be.”
And not only do partnerships with delivery services ensure consumers can still acquire products through their preferred retailers, but they also offer yet another opportunity for brands to reach consumers at the exact point of purchase.
It’s also worth noting that consumers who may have been hesitant to shop online before March of 2020 quickly became intimately familiar with digital channels out of pure necessity.
As a result, brands are dealing with an increasingly savvy consumer base and shifting more of their budgets online, which further benefits retailers (provided they’re ready to take in those digital ad dollars and put them to good use).
Luckily, retailers are starting to understand the importance of offering a media platform and what it takes from a logistical standpoint.
“You can't just pick up one day and decide ‘I'm going to be a media platform,’” Smith says. “But there are a lot of blueprints out there for who's doing it really well.”
And, as is evident when you consider retailers like Amazon and Target, one of the most critical components to launching a media platform is alignment. As Smith points out, it’s not enough to simply offer powerful data — retailers also have to ensure the brands that advertise through their platform are aligned with the customer experience. Because all the smartest monetization schemes in the world won’t help you if your customers don’t trust you anymore.
“The retailer, typically, is putting the customer first,” Smith says. “Retailers will always prioritize that customer and sale over a large media buy. When you think about the environment where your advertising would be placed, marketers trust that it's going to be in an environment that the customer is there for a reason, they are familiar with and trust the quality, it's personalized, and it's additive to the experience.”
By keeping the customer at the center, brands and retailers can work together to provide experiences that benefit everyone. With retail media, there are no privacy concerns and no missing attribution — just a natural, seamless, well-targeted shopping experience that boosts brands and retailers’ revenue while keeping customers happy.
Listen to the full podcast episode to hear additional insights from Smith about what retail media can do for your brand.