Grappling With the Explosion of Interest in Retail Media
During the week of June 26, the focus of the red-hot retail media world was on the Path to Purchase Institute’s Retail Media Summit in Chicago. It comes as no surprise that in an industry projected to grow 20%+ every year for the next five years, there was an overwhelming demand from various players eager to secure their share of the burgeoning market. Emerging media networks, new capabilities, new vendors, and agencies alike were fiercely competing to grab a slice of the lucrative pie.
As a result, the overwhelming topic at this year’s conference was fragmentation and its consequential impacts. Attendees deliberated on how to overcome the dominance of the "Big 5" networks. The pressing questions revolved around determining the optimal areas to invest in, assessing and comparing results across different networks, and effectively managing the multitude of diverse networks at hand. In many respects, this moment resembles the transformative eras of search and social media in previous years: a realization that immense potential and profitability lie within reach, yet the industry is still grappling with uncertainties regarding the eventual winners and losers, the most effective methodologies, and the establishment of best practices.
Below, you will find a summary of some of the trends Publicis Commerce is watching out for in 2023 and beyond.
KEY TAKEAWAYS
Scale: The exponential growth of Retail Media Networks (RMNs), coupled with their rapid formation of partnerships, expansion into offsite and upper funnel media, and constant evolution of capabilities, necessitates specialized expertise for effective management. Unfortunately, the majority of brands currently lack such in-house expertise. In other words, this form of media cannot be approached with a "set it and forget it" mentality. As a result, vendors, tools, and agencies that can help clients manage these complexities (or, significant investment to build in-house competency) are going to be necessary for brands aiming to achieve success.
Standardization: Standardization emerged as a prominent concern among attendees, adding complexity to the RMN space. Currently, the lack of agreement on the definition of even basic KPIs is leading to confusion and frustration.
Nevertheless, this issue appears to be a typical "growing pains" challenge that is expected to be resolved within the next 12-18 months. Recognizing the urgency, the Interactive Advertising Bureau (IAB) has taken the initiative by establishing a committee focused on retail media standardization. It is worth noting that Publicis Commerce has made significant contributions to this committee, with several members across Groupe actively participating. Comprised of brands, RMNs, and third-party entities, this committee aims to address all the intricate and contentious questions that have arisen. While it won't be a simple task, it is a problem that can be solved with concerted effort and collaboration.
Incrementality and Measurement: Attribution within RMNs was talked about so frequently at the Summit that one speaker joked we should turn it into a drinking game. But the reality is, solid measurement is more promise than reality today. While certain networks have developed comprehensive measurement approaches, they are still the exception, not the norm. The absence of a unified approach to facilitate direct comparisons across networks hinders the ability to make apples-to-apples assessments (an area where standardization efforts will help).
This dynamic is bound to change. As marketers have more options for where and how to reach consumers, they can and should demand higher levels of data support from the RMNs, and the smart networks will heed the call. Eventually, if marketers cannot prove the incrementality of their investment in retail media networks, it won’t matter how much pressure the retailers apply, marketers will walk.
In-store Media: The Walmart or Kroger of 2026 is likely to look significantly different than today, as retailers look to monetize much more of the in-store experience with digital signage. With 90% of purchases still occurring in a physical store, there is a huge opportunity to influence consumers with digital, point-of-sale screens. The flexibility and immediacy in-store digital affords is likely to be highly effective at driving conversions, and is set to become a go-to tactic for commerce marketers.
Download the P2PI Retail Media Summit Trends Report here.