Knowing the difference between offline and online retail media is crucial for marketers looking to jump on the bandwagon. As sales continue to recover, many retailers turn to media to get the upper hand and attract new customers.
Retail media benefits both in-store and online retailers. While this medium can be beneficial both online and offline, there are some key differences in how it functions in the digital and physical realms.
What is it? Retail media is marketing material shown to consumers at a retail point of purchase. This can be online or in-store. These materials include free samples, in-store displays and signs, loyalty offerings, coupons, and promoted items.
While not new, retail media is going through a transformation. The increasing scrutiny of online retail media combined with digital enhancements to offline media is changing how customers and retailers view this decades-old medium.
Online vs offline retail media
There is more differentiating between online and offline retail media than just location. Alongside physical presentation, the methods that should be used for online and offline media differ too.
Online retail media
Online retail media refers to digital interactions via email, live chats, and social media. It can also refer to media hosted on e-commerce platforms. Audiences may or may not have interacted with retailers in person.
Offline retail media
Offline retail media is media shown to audiences inside a physical store. It is a facet of brick-and-mortar retail, using in-person interaction to provide distinct experiences.
Online retail media is over-done
Online retail media can be effective, but it must also be balanced. If storefronts like Amazon rely too heavily on retail media ads, it can reduce consumer trust. One way retailers can erode trust is by relying too heavily on sponsored content.
For instance, Amazon has started to prioritize sponsored posts in its search results. These subtle posts do contain small labels, but their prevalence is working against the e-commerce giant. Industry analysts argue that Amazon’s current retail media ads have come at the expense of customer-centered search results and recommendations.
Customers become wary of search results and see Amazon’s prioritization of profit as a betrayal of trust. These “pay-to-play” search ads are now also the subject of one of the biggest monopoly lawsuits in US history. Too many sponsored posts, or too subtle of a label, slowly wears away customer satisfaction.
Companies looking to leverage online media need to consider a balanced approach – providing customer-driven marketing content without sacrificing the needs and desires of their target audience. Unlike online, offline is less disruptive to the customer experience
The growing importance of offline retail media
Offline media can still be used creatively to tell stories and create dynamic experiences, but customers can find the right product more easily. Customers also see the same inventory regardless of their past shopping behaviors.
In-store marketing lets advertisers connect with customers and build engagement organically. There are also more customers to interact with in person than online. While e-commerce is a critical part of the retail industry, it still doesn’t out-compete brick-and-mortar shopping.
The boom of e-commerce during COVID lockdowns has faded and according to a recent finding from the NPD Group, in 2022 more holiday purchases were made in a physical store than online. That year, 46% of holiday shopping was in-person and 45% was online. This trend is continuing.
Brick-and-mortar stores are experiencing a revival and according to a recent study from McKinsey, 20% of customers now say they shop exclusively in-store. In contrast, only 5% of shoppers said they do all of their shopping online.
With offline retail cementing its importance, advertisers must prioritize offline media. In-store ads can craft a story, foster engagement, and even assist customers in finding what they’re looking for.
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