Retail media is a $100 billion dollar industry, and it’s time your brand invests in it.
Though ads are traditionally associated with news sites and social media, retail media is bringing them to eCommerce.
Not taking advantage of this shift is like an empty grocery store aisle: a waste of valuable real estate. Knowing this, many brick-and-mortar brands have built ad platforms that allow suppliers to promote their products across the retailers’ sites and apps.
Take Walmart. They recently launched their new ad platform, Walmart Connect, leading to a thriving, high-margin revenue stream with quarter-over-quarter ad revenue growth of 95%, while their overall e-commerce business grew by 79%.
This notion of charging for a premium spot shouldn’t be new: if you’re a retailer, you monetize your in-person experience through shopper marketing, often negotiated through trade and co-op dollars with suppliers/manufacturers. Why should your web experience be any different?
In this article, we’ll explain how retail media is the digitized version of in-store shopper marketing and how you too can launch an ad platform.
Shopper marketing influences customers by promoting products through aisle placements, print ads, and customized displays.
For years stores drove sales by cultivating an engaging in-person customer experience — and it worked great.
Many of these experiences involve deals between the retailers and their suppliers. In order to secure a fair price from Heinz, for instance, Kroger may offer them special placement in their store aisles, especially around summer holidays.
Shopper marketing benefits both retailers and their manufacturers: stores can monetize their physical real estate, and vendors ensure they are front-and-center to likely buyers.
Though these partnerships still contribute to revenue, in-store traffic is dropping and consumers are moving digital. Around 42% of consumers, for example, now purchase groceries online at least once a week, and a majority said they will continue this permanently.
Covid contributed to this shift, but one way or another, eCommerce contributes to a bigger percentage of sales. It’s time to meet customers where they are and move shopper marketing online.
And, by doing so, you also help protect your existing trade and co-op dollars. Rather than see that money slowly erode, why not turn it into retail media revenue?
Your online shopping experience is the digital equivalent of in-person shopper marketing. Retail media monetizes this online space by allowing sellers to promote products throughout the users’ individual browsing experience. That direct relationship you have with your suppliers can extend to your website traffic too.
For instance, sponsored listings are eCommerce-centric ad units where vendors pay to have their organic listing promoted in search and browsing results, on the homepage, etc. These promote products seamlessly during the browsing experience, driving revenue from product sales and ads alike.
Similar to how in-store shoppers browse snack aisles and are influenced by a product's placement, with sponsored listings, customers browse your site and are influenced by what products appear in search results.
Through Walmart’s ad platform, for example, Dr. Pepper can pay so that when someone searches for soda, they are the first brand to appear.
Just as Walmart may have partnered with Dr. Pepper to secure special placement in the soda aisle, these sponsored listings give Dr. Pepper better visibility to someone searching for soda online. It’s a win-win-win: Walmart monetizes with ads, Dr. Pepper has the potential for greater sales, and the user experience isn’t negatively impacted.
Retail media isn't just search result ads. You can also have prominent promotions across the homepage and other browsing experiences. For instance, below, on the homepage of Walmart’s website, Thomas pays for a highly-visible above-the-fold spot.
Prominent ads like this are not unlike premium front-of-the-store displays: vendors pay for the optimal spot to advertise their product. This is the first product customers see when they arrive, and it can change how they spend in store or online.
After all, you own the shelf space in your store, why are you giving away prime site spots to advertisers for free?
You want to monetize your space — whether digital or physical — and, luckily, vendors are ready to pay. It’s estimated that 60% of ad spending will be digital by 2023, which includes your partners’ retail media budgets.
There are many reasons why both retailers and vendors are embracing retail media:
Interest in retail media isn't theoretical. Brands like Walmart, Target, and Costco have thriving platforms, and even Instacart — who is not a retailer themselves — earned $300 million last year from CPG product ads and is aiming to hit $1 billion next year. Vendors and retailers alike are moving toward retail media.
Building an ad platform like Walmart’s can be costly and time-consuming, but your competitors are growing rapidly with retail media platforms. With Kevel, you can implement one in just weeks.
Kevel is the leader in ad APIs, and eCommerce brands like Klarna, Rappi, Bed Bath and Beyond, and Cornershop use us to build retail media ad platforms in a fraction of the time and cost as doing it from scratch.
Let us know how we can help you start today!