As an integral part of a full-funnel marketing experience, retail media aims to target consumers at or near the place of purchase, encouraging conversion.
Lower-funnel activities like this are important for engaging customers throughout their buying journey and in retaining brand interest after a purchase has been made.
While retail media has been long established as critical to promoting goods and services at the bottom of the marketing funnel, larger media agencies have recently started to pay it the attention it deserves.
Before marketers can take full advantage of retail media’s recent growth, they first need to understand what it is and why it works.
What is retail media?
Retail media is the marketing of retail goods to consumers at the point of purchase or point of choice (be it in-store or online) and has been a part of retail campaigns for decades. Some of the most common types of retail media include online ads, in-store signage, free samples, loyalty card offerings, and coupons.
Media presented within a retail environment is the most encompassing description of it, given that the term’s definition is continuing to expand as retail and e-commerce evolve.
According to eMarketer, retail media will be the fastest-growing ad channel by 2027, growing by more than 20% a year. Alongside its rise to fame, retail media is also seeing a renaissance.
The discipline of retail media now includes a wide range of creative and engaging content from fleet media (including vehicles decked out with digital out-of-home ads) and onsite videos.
Marketers are also looking to bring higher levels of creativity to the medium, making entertaining and engaging content for audiences. The range of ways retailers interact with their customers is slated to continue its growth in the coming year and beyond.
Retail media’s future in 2024
While retail media is a relatively new marketing channel for larger advertisers and agencies, it’s a medium they quickly adopted in 2023. According to research from McKinsey, most advertisers are currently splitting their business between an average of four retail media networks (RMNs).
These numbers are likely to grow substantially over the next few years as the definition of retail media broadens. Customers and advertisers are in for exciting new campaigns from their favorite retailers.
One example of retailers pushing the boundaries of retail media is Walmart’s upcoming “RomCommcerce” series. Walmart created a series of 23 short episodes that feature over 330 products and released Add to Heart this past holiday season to connect with shoppers.
By engaging with customer’s guilty pleasures and holiday traditions, the retail giant has created a sense of excitement that stays with their audience for the long run. Rather than creating a simple video highlighting its product offerings, Walmart has embraced creative storytelling to more meaningfully engage with its audience.
Retail has been resilient this past year, holding on to revenue when so many other industries were at best seeing a halt in growth and a worst experienced a decline. eMarketer predicts that retail will spend $73.55 billion on digital ads in 2024 alone and that the industry will make up 27.9% of total digital ad spending in the US.
In a less stable economic environment, industries will look to retail to lead the way, marketers included. Advertisers know that banking on retail is a safe bet, which means embracing lower-funnel activities like retail media.