On top of a pandemic-inspired change in online shopping behaviours, retail media networks (RMNs) are buzzing of late due to a combination of factors aligning perfectly, says Kiessé Lamour, global head of media at marketing agency Wunderman Thompson. Here are some key reasons.
With the departure of third-party cookies due to privacy concerns, brands and agencies are looking to partner with retailers who have access to first-party data that can help inform their marketing strategies and investment decisions.
With RMNs, there’s no need for marketers to guess which parts of their marketing dollars are being wasted. Retailers give brands the chance to see the impact of ad spend, while gaining a better understanding of their customers’ buying habits and preferences.
Global management consulting firm McKinsey has estimated that RMN margins can reach anywhere from 50% to 90% – far exceeding regular trade margins. “Amazon was also a great motivator by proving that you can be both a mega retailer and a mega media owner by claiming ad revenues that many retailers could only dream of,” says Lamour.
New revenue stream potential
RMNs offer grocers the opportunity to transact with brands outside of their regular suppliers. Lamour points to the example of a supermarket giving access to its data to an electric vehicle brand to understand and better reach eco-conscious shoppers. Just be mindful that content aligns with customer interests. Seeing an ad for men’s deodorant when searching for cereal won’t necessarily drive conversion or loyalty.
This article first appeared in Canadian Grocer’s November 2023 issue.