Retail media momentum is showing no signs of slowing.
eMarketer predicts retail media will be the fastest-growing ad channel through 2027, hitting a whopping $109.4 billion. But hold your horses! In this gold rush, misconceptions are spreading faster than a TikTok trend.
Don't worry, I'm your Retail Media Mythbuster (think of Adam Savage with a retail media hat on) here to separate fact from fiction and keep your retail media strategy on point. Let's dive in!
Myth No. 1: "Old-school digital strategies work just fine for retail media."
Retailers and brands often think of retail media as an extension of their digital or national media strategies, overlooking the unique context within the retail media space requiring unique technology and activation strategies.
It’s not enough to simply apply standard programmatic audience building and traditional direct-buying mentalities to offsite and onsite retail media advertising. Retailers need solutions that are geared toward collecting more data—and getting the most out of it.
Retailers’ need to expand beyond their website visitors that they've used for retargeting efforts in the past and instead work to turn every shopper across in-store and digital properties into an opportunity for brands to engage. Similarly, brands need to adjust their strategies to take full advantage of the shopper data available to them.
Shopper-first retail media targeting means moving beyond the assumption- and segment-based targeting tactics of national digital media, and instead leverage intelligent AI modeling to understand past shopping behavior to inform who they should be engaging with. Targeting capabilities that focus on reaching a static audience based on limited data means limited results for brands. AI targeting uses smart modeling, which looks at past and current shopping behaviors to predict future behaviors. This enables brands to reach the right shoppers in real time.
Reality check: Retail media is a whole new beast. It's like trying to use a horse and buggy to win the Indy 500. Forget retargeting and segment-based strategies. To win, you need granular data and cutting-edge AI that knows shoppers better than their best friend.
Myth No. 2: "All AI is created equal."
There’s a fervor around AI in digital marketing, but marketers shouldn’t be fooled by claims of “AI is the future, so any and all AI drives success.”
The fact of the matter is that AI is only as good as its model and the data it's built on. AI that isn’t built to leverage shopper-level data isn’t built for retail media and won’t drive the strongest results. As the saying goes, "garbage in is garbage out;" without good, persistent shopper identity being fed into a model for identifying, finding and reaching shoppers, an AI model is useless.
For retail media, the best AI is SKU-based predictive AI. Predictive AI powered by verified first-party data which takes into account SKU level insights allows marketers to reach shoppers who are truly ready to buy with messaging that is relevant to them on an individual level.
Reality check: Just because it's shiny and new doesn't mean it's gold. AI is only as good as the data it's fed. For retail media, that means SKU-level insights and verified first-party data. Think of it like baking a cake: Garbage ingredients equals garbage cake. Demand AI that's built on shopper-level data. Otherwise, you're just throwing darts blindfolded.
Myth No. 3: "Retail media is all about activation."
Closely tied to immediate sales efforts and conversion-focused strategies, there is a common sentiment that retail media is all about activation channel, whether onsite, offsite, social or in-store.
But this isn’t accounting for the true power of retail media. Retail media is really about access to shoppers. Without a strong foundation of a large and diverse shopper audience, a retailer will struggle to break through the noise in retail media, pushing brands to shift budgets into national brand buys or to competitors directly. Retailers need the tools and tactics to identify more of their shoppers and make them reachable and measurable.
Shopper-centric retail media goes beyond activation, helping retailers and brands better connect with and understand their customer base.
Reality check: If you’re only looking to retail media at activation channels, you’re missing out on its power to illuminate shoppers’ behaviors, qualities and shopping patterns. It's about truly understanding your shoppers. Think of it as a treasure map to their hearts (and wallets!). Without that deep understanding, you'll be lost at sea. Use retail media to build deep shopper connections and unlock a treasure trove of insights.
Myth No 4: "Digital measurement tells the whole story."
NRF surveys show that over 80% of transactions happen in-store at most brick-and-mortar retailers. That means that if your retail media is only factoring online sales, you’re only looking at 20% of purchase data.
Brands need solutions that can connect online impressions to in-store conversions accurately and consistently. Otherwise, they’re just capturing a fraction of the impact of their retail media campaigns and not learning how to improve their future strategies.
Reality check: Connect those online impressions to in-store conversions to get the full picture and optimize your strategies.
Questions to ask when evaluating a retail media network
Don’t ignore your intuition the next time you’re evaluating a retail media opportunity and something seems too good to be true. Here are four questions to help you along the way:
- How reliant are you on segment-based targeting?
- What does your AI technology look like?
- How do you use retail media to better understanding your shopper base?
- Are you able to tie in-store purchase data with your digital measurement?
Separating fact from fiction is never easy, but it’s easier than regretting a million-dollar mistake. Intelligent retail media means starting with the right foundations, so learn what person-first identity coupled with next-generation AI can do for you.