Retailers like 7-Eleven and Casey’s General Stores have developed and implemented retail media networks (RMNs) to connect with their customers, offer promotions and build brand loyalty. Restaurants and grocery outlets are also jumping into the game. Let’s take a look at how you might take advantage of the growth of RMNs.
What is a Retail Media Network?
A retail media network is a platform that allows retailers to reach potential customers through digital marketing channels. It helps retailers to create, manage and optimize their campaigns across multiple channels such as mobile apps, websites, search engines, and social media.
The pandemic pushed many retailers to create their own apps or website-based customer ordering and loyalty programs. The growth of RMNs accelerated dramatically in the last three years. Retailers that have their own customer data like a shopping or loyalty app could monetize that brand advertising by creating their own RMN, or by using a larger one.
Amazon has been doing this for over a decade. Their retail media network generated over 11.6 billion dollars last year.* Other retailers can advertise and sell through Amazon and target potential customers from Amazon’s large customer database.
RMNs allow consumer packaged goods (CPGs) brands to advertise in a new way. Instead of paper coupons or in-store sampling, these networks include digital advertising on apps, search engines, and social media.
In some cases, retailers own these channels directly and, in others, grocers might align with a company like Instacart’s Carrot Ads or others to run advertising operations.
But these e-commerce channels can now extend far beyond old-fashioned, broadstroke ad plays, giving CPGs the chance to get their message to a highly targeted audience, thanks to access to all-important first-party data, while also being able to closely track the ad’s performance…
For those looking to get started with a retail media network, … the first step would be to have loyalty data in order. The next is finding a platform, such as CitrusAd, Criteo or PromoteIQ, to partner with. Those partners will source advertisers for the retailer, he says.*
What’s the Advantage of Moving Advertising Dollars to an RMN?
As privacy compliance has become more complex, the ways in which businesses can track customer data have also become more challenging. Apple caused a revolution when it required users to opt-in to tracking on their browsers and apps. The CCPA, the California Privacy Rights Act makes it even more difficult to track customer data and imposes stiff fines for violations. Compliance with privacy laws can be monumentally expensive. RMNs provide an elegant solution. According to Forbes:
…retail media is being fueled primarily by consumer brands that are reallocating their “below-the-line”, trade-marketing in-store budgets toward digital retail networks. In addition, retail-owned media networks tend to be immune from the privacy-based limitations on data usage and targeting, since they are accessing their own first-party data.
Nikhil Lai, Senior Analyst, Performance Marketing at Forrester says, “Advertisers use of RMNs encompasses the entire purchase funnel from awareness to point of purchase. Essentially, retail media holds the entire funnel accountable to delivering a verifiable revenue impact. In addition, the results of retail media campaigns can inform brands’ pricing, product, packaging, and distribution strategies.”
With retail media network’s ability to link impressions to direct purchases, a McKinsey report found 70% of marketers had enhanced returns from advertising on retail media networks compared to other media.
7-Eleven’s Gulp Media
7-Eleven’s RMN is Gulp Media. Gulp Media is providing access to their vast customer data to third-party advertisers. They plan to expand to in-store media, social media, and streaming services. By analyzing shopper behavior, Gulp Media can help target ads and track their effectiveness.
“We believe Gulp Media will help us forge stronger partnerships with our CPG vendors in addition to opening up new opportunities with non-endemic partners in auto, sports and gaming categories,”
So, We’ll Have to Pay Attention
Digital retail media networks have become an increasingly powerful medium for advertising in recent years. With the help of digital retail media networks, retailers can create high-quality digital content that will build brand loyalty and drive sales. Additionally, these networks provide a range of benefits such as increased reach and engagement, improved customer tracking, and more detailed product feedback. RMNs have a great future and are projected to grow by about 60% by 2027, exceeding the expected growth for all digital advertising. (Forbes)
* CSP
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