In the last few years, point of purchase has emerged as a sweet spot for effective marketing. These days, it seems like every major retailer has its own channel for serving ads, and advertisers are seizing this opportunity eagerly, to the tune of $114.4 billion in digital spending in 2022 alone. But what works for ecommerce giants like Amazon and Walmart won’t work for Main Street, and with opportunities for small- to medium-sized retailers ripe for the taking, it’s never been more critical to get in-the-know.
It just takes understanding the building blocks of a retail media network (RMN) and what’s required to put them in place effectively. This article will cover the six building blocks required for any retailer, regardless of their size, to set up a strong foundation for an RMN.
1. First-party customer data.
The most important component of building an RMN is first-party data — a dataset of all your customers’ shopping habits and preferences. This is what advertisers are most interested in. The first step on the path to building your own RMN is to establish mature systems for collecting, segmenting and utilizing your data. Most businesses do this via a Customer Data Platform (CDP), a more advanced alternative to the Customer Relationship Management (CRM) platforms that most ecommerce retailers are familiar with. The difference is that CDPs unify customer data across all channels and touch points, creating a comprehensive customer profile that allows advertisers to serve up messaging tailored to each user’s buying stage.
Having a unified view of your customer matters because retail buying journeys don’t take place on one channel. The same customer might drop into your store to try on an item, then check out the website listing before eventually shifting to mobile to make the final purchase. CDPs aggregate the data across this trail to create a unified view of each customer. Once data is collected, it can then be combined with zero-party data from subscriptions, registered accounts and surveys. The aim is to offer advertisers a 360-degree view of every potential customer so they can create more streamlined targeting.
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2. Value proposition.
Before you can take an RMN to market, it’s imperative to establish a value proposition. The best way to do this is to think of your RMN as a distinct product, one that’s designed to create value for an intended customer. Value propositions will differ from one network to another but should always center around the audience that’s on offer.
Remember, an RMN is selling people’s attention, first and foremost. A strong value proposition will articulate why your RMN is the best place to build awareness for a specific advertiser’s brand. For example, a fishing equipment retailer might want to stress why their network is the best place to directly engage both amateur and professional anglers.
3. Effective UI and UX design.
After data and value proposition, user interface (UI) and user experience (UX) design are the next critical building blocks to put in place before taking an RMN to market. A clean, user-friendly interface is table stakes for advertising messages to land successfully, so it’s up to retailers to make each touch point as clean and intuitive as possible. Simply put, UX is the art of ensuring that the path to conversion is consistent, seamless and cohesive across every channel.
This isn’t just a case of your mobile app bearing the same branding as your website or in-store settings. It’s about recognizing individual users as they travel across these touch points and accurately responding to where those customers are in their buying journey.
4. Strategic partnerships and auction visibility.
The next building block is getting advertisers to claim inventory. There are various routes through which a retailer can attract advertising dollars. Those that occupy a particular market niche can directly approach specific advertisers in their field and propose strategic advertising partnerships. Alternatively, RMNs can also collaborate with supply-side platforms to make their inventory available on programmatic ad auctions like CitrusAd, Criteo and The Trade Desk. These interfaces automatically assign inventory to the most suitable bid from advertisers.
5. Secure offsite capacity.
Advertising should not be exclusive to your own network. In fact, it’s become common practice to include third-party publishers as part of a retailer’s RMN strategy, as holding offsite ad space allows them to increase the reach they can offer their advertising partners. Unlike the third-party advertising methods of the past, offsite retail media does not compromise users’ privacy; it exclusively utilizes data that users have consented to provide, via tools like a data clean room (DCR) that anonymize data, turning it into segments of aggregated information.
Going this route gives retailers yet another selling point to offer advertisers. Take the fishing equipment retailer mentioned earlier. Many of its potential advertisers will be fishing brands. Some of these manufacturers may only have small pools of usable first-party data. But were they to take advantage of the RMN’s offsite advertising offer, they’d be able to augment their own dataset with those of an ecommerce site and a relevant publisher, thereby delivering wider reach and better targeting capabilities across the board.
6. Quality and safety control measures.
With ad fraud on the rise, most brands have become hyper-vigilant about where their creative ends up, driving more and more ad spend toward RMNs. With some rare exceptions, retail websites are safe spaces, separate from the darker sides of the internet. However, it is important to keep in mind that when programmatic auctions are used to automatically assign advertising, retailers must take measures to guard against unsuitable or malicious content that could damage the integrity of their networks.
Doing so requires robust content moderation policies, such as partnering with third-party verification services to ensure that only authentic advertisers can get through. Another method is to employ strict keyword blacklists to exclude unsuitable material from auctions. There is no faster way to send advertisers running for the hills than by surrounding their brand with offensive, fraudulent or inappropriate content.
A Final Thought
Whether you’re a large or small retailer, retail media is a strategy worth considering. After all, trends in ad spend indicate that all retailers will eventually leverage their channels as a revenue source in some way or another. But setting up an RMN requires upfront investment, and as with any investment, prior due diligence pays off. For any chance of success, retailers need to know if their digital infrastructure is suitably mature before opening up to advertisers. Some may even have to play catch-up before their systems are ready to host effective advertising campaigns. So before making a move, start with understanding where you sit in the spectrum of preparation and make a plan.
Paul Maguire is Head of Retail Delivery at digital solutions provider Endava. He is an experienced, commercially aware and customer-focused department, product and program leader with almost 20 years’ experience in all aspects of the omnichannel world, working for one of Europe’s largest home improvement retail groups, the world’s most famous luxury retailer and a leading luxury beauty company. He has a talent for seeing the bigger picture, delivering complex programs and projects aligned to business strategy and creating efficient processes and communications.
