By 2028, U.S. omnichannel retail media ad spend will account for nearly a quarter of total media ad spend, and it’s no mystery why.Brands use first-party data to reach customers at crucial moments in their shopping journey, while retailers generate additional revenue from brands competing for advertising space, whether online or in-store.
While retailers and brands reap the benefits of retail media advertising, customers aren’t always so lucky. Retail media strategies that focus solely on maximizing revenue opportunities come at a costly price: customer dissatisfaction.
Consider the customer experience in today’s retail environment. In-store, digital displays and shelf tags bombard shoppers with personalized promotions and competing brand messages. Online, customers seeking a specific product on Kroger.com are often redirected to competing brands, thanks to data-driven ad auctions that incentivize conquest marketing. Both create friction in the shopping experience, frustrating customers who often already know exactly what they want to buy.
To build and maintain customer loyalty, brands must develop dynamic retail media strategies that center on a consumer-first approach. Successful brands will use the benefits of retail media — granular consumer insights, real-time data trends, and closed-loop measurement — as a market research tool, monitoring the messages and offers that resonate most with customers and adjusting their marketing strategies accordingly.
The power of first-party data
Over 83% of global customers say that belonging to loyalty programs influences their decision to buy from a business again. These programs generate valuable first-party data that, when mined thoughtfully with customer needs in mind, is essential for building high-impact retail media campaigns.
Loyalty program data like purchase frequency, browsing behavior, and product preference reveal crucial insights into real-time shopping behaviors, leading to more effective personalized ads for repeat customers. QR codes enhance this data collection further, tracking a product’s journey from scan to cart to purchase, leading to more effective personalized ads for repeat customers.
If a Costco loyalty shopper who buys a particular coffee brand once a month has not purchased it in a while, they might receive a digital ad with a “We miss you!” discount. The customer will likely find the ad helpful rather than irrelevant or inconvenient.
Success in retail media belongs to brands that skillfully leverage first-party data while maintaining consumer trust — and with good reason. According to Forrester Consulting research, first-party customer behavioral data in marketing strategies can positively impact ROI by 72%.
Retail media that resonates
Display ads on a retailer’s app, keyword search ads based on shopper queries, and in-store advertising integrated with online shopping features are all strong placement options — but placement alone doesn’t drive purchase decisions. Understanding what makes customers decide to buy (or, more importantly, not to buy) is the key ingredient to high-performing retail media.
High prices, lack of relevancy, or underwhelming creativity in retail media ads may lead to shoppers passing on a product. But the most critical factor? Product content. 1WorldSync’s Product Content Benchmark report found that seven out of 10 online shoppers decided not to buy products due to poor quality or a lack of product content.
Strong retail media ads catch shoppers’ attention, while powerful product content leads to purchase decisions.
With this in mind, brands must pay close attention to four key areas to strengthen their product detail pages (PDPs):
- High-resolution images that showcase the product from multiple angles
- Detailed, accurate product descriptions that include SEO keywords
- Videos, 360-degree views, or AR experiences that showcase a more holistic view of a brand’s products
- Prominently featuredpositive reviews and ratings that build trust with potential new customers
Well-placed retail media ads drive discovery, while high-quality product pages convert interest into sales, together building the brand credibility that today’s digital shoppers demand.
Customer-first strategy
The direct link to customer preferences and ad-related behaviors provides a strong foundation for a successful retail media strategy, but it’s only part of the equation. Today’s consumers expect a seamless omnichannel retail experience.
Sephora exemplifies how a streamlined omnichannel retail strategy can strengthen a brand’s retail media effectiveness. Sephora Beauty Insiders can tap into the Beauty Bag on their phone or desktop to access their past purchases and rewards points, scan items in-store to see other online options, watch tutorial videos, and find a store near them. Sephora then uses customer insights from the program to serve highly personalized ads and product recommendations via email, app notifications, and digital platforms.
To get on Sephora’s level, brands need to consider the effectiveness of their product content orchestration strategy — the harmonization of the people, systems, and product assets required to sell successfully across every channel. This requires all product content to be accurate, consistent, and relevant.
Without these fundamentals, brands’ retail media strategies are more likely to under perform. For example, a tech company promoting a new speaker through retail media ads that feature inconsistent product descriptions and inaccurate pricing information will likely confuse customers and push them toward other brands selling similar items.
Retail media isn’t just about placing ads on the proper channels. To be successful, retail media strategies must be continuously refined again based on key first-party data and ad performance. Brands that maintain a customer-first mentality and effective product content orchestration will come out on top in an increasingly crowded retail marketplace.