Retail media is a rapidly evolving sector that blends the vast reach of retail giants, like Amazon, Walmart and Kroger, with the precision targeting capabilities of modern advertising. Despite its massive and rapid growth globally (there are more than 200 Retail Media Networks worldwide), many retailers have so far failed to reach the true potential of retail media.
This retail media can categorized as basic, often clunky, advertising methods that reach consumers but fail to leverage the full potential of data-driven insights and omnichannel integration. Understanding why retailers have struggled to advance their media propositions is crucial in staying competitive in an increasingly crowded media network space.
Characteristics of basic retail media
Limited Data Utilization: Minimal use of customer data beyond basic demographics, leading to broad – and often ineffective – targeting.
Disjointed data: Disjointed advertising efforts that do not properly integrate data signals from a variety of channels, including from digital on-site, digital-offsite and in-store, missing the opportunity to provide a unified customer view for advertiser brands and a true omnichannel approach to retail media.
Trade-Centric Approaches: Focused primarily on promoting specific products and promotions from brands, rather than delivering creative brand-led communications that enhance the overall customer experience and build long-lasting relationships between retailer, brand and consumer.
Performance Metrics: Reliance on basic performance metrics like impressions and clicks without deeper analysis of the customer journey, conversion paths or more in-depth and holistic measurement metrics.
Crossed Wires: As merchandising-first organizations, retailers don’t always understand what brand advertisers and advertising agencies on the buy side need to effectively plan and evaluate retail media campaigns. As a result, brands are ill-equipped to understand the effectiveness of their advertising, and retailers are unable to determine how to best evolve their offering to secure repeat brand investment.
Why are retailers lagging behind in retail media
Legacy Systems: Many retailers operate on legacy systems that are not equipped to handle the advanced data analytics or real-time processing required for modern retail media solutions.
Data Silos: Fragmented data across various departments and systems hinder the ability to create a cohesive, omnichannel marketing strategy.
Resistance to Change: Organizational inertia and resistance to change, especially in large, established companies, slow down the adoption of new technologies and methodologies.
Skill Gaps: A shortage of skilled professionals who understand both retail operations and advanced digital and in-store advertising techniques creates a bottleneck in evolving retail media strategies and answering brand/agency needs to plan and evaluate retail media campaigns.
Traditional Retailer-Supplier Relationships: Heavy dependence on traditional retailer-supplier relationships that are more comfortable with marketing spend as a commercial lever, limiting collaborative innovation in exploring new media capabilities.
How can retailers get ahead?
Invest in Advanced Analytics & Technology: Leveraging advanced analytics and artificial intelligence can transform raw data into actionable insights. Retailers need to invest in platforms that can analyze large data sets in real-time, providing a deeper understanding of customer behavior and preferences. As an example, Threefold accelerates retailers’ media performance using our proprietary Plan-Apps technology, the Retail Media Operating system that aggregates and analyzes vast amounts of performance data to inform future planning. Currently housing data from more than 20,000 retail media campaigns, Plan-Apps data shows that brands with an effective measurement strategy see improvements in retail media ROI by up to 477%.
Break Down Data Silos: Integrating data across all touchpoints—online and offline—can create a unified customer profile. This holistic view enables more precise targeting and personalized advertising strategies. Personalized approaches typically unlock 20-30% efficiency gains* in acquiring new customers.
Omnichannel Integration: Seamless integration of all marketing channels ensures that customers receive a consistent message regardless of when and where they interact with the brand, recognizing that shoppers engage with 3-5 separate marketing channels** across their path to purchase. This requires robust technology infrastructure and coordination across various cross-functional teams.
Focus on Customer Experience: Shifting the focus from trade-centric to customer-centric advertising enhances the shopping experience. Personalized content, dynamic creative optimization, and contextual advertising can significantly improve engagement and conversion rates.
Upskill the Workforce: Continuous training and development programs can bridge the skill gap to build a team of retail marketing experts. Retailers need to foster a culture of innovation and agility, encouraging teams to embrace new technologies and methodologies.
Collaborate with Innovative Partners: Partnering with adtech and innovative media vendors can introduce fresh ideas and technologies into retailers, accelerating the transformation from a traditional retailer into a retailer with a robust media business.
The transition to a sophisticated retail media business is not just a technological upgrade; it is a paradigm shift in how retailers engage with their customers. By embracing industry advancements and placing marketing experts at the forefront of retail media evolution, retailers can unlock its full potential. This transformation is crucial for staying competitive in an increasingly complex marketplace, offering a more personalized, efficient, and impactful advertising experience for retailers, brands, and customers alike.
About Tara Hekmat
Tara Hekmat is a Client Director at Threefold, where she partners with retailers and CPGs to launch and optimize end-to-end retail media strategies, curating omnichannel campaigns that supercharge sales to deliver improved performance. Prior to her role at Threefold, Tara spent 6 years on the Capture team within SMG, collaborating with CPGs to plan, execute and measure their retail media campaigns across top grocers. Want to chat about how Threefold can supercharge your retail media strategy? You can reach her at tara.hekmat@threefold.team.
About Threefold
Founded in 2008, Threefold is the world's leading Retail Media Network (RMN) specialist, headquartered in both New York and London. As part of the SMG agency network, which employs nearly 400 retail media experts, Threefold's primary mission is to unlock incremental brand and supplier budgets, curate media campaigns that supercharge sales and elevate its retail partners into top-tier omnichannel media owners, spanning in-store, off-site and online.
Threefold's services include the leading Retail Media Operating System Plan-Apps, consultancy and a white-label in-house solution that has seen the agency build, run and operate over 10 Retail Media Networks to date. In the UK, Threefold runs and operates Walgreens' Boots Media Group, ASDA’s LS Eleven Media Services, Co-op Media Network, Morrisons Media Group and retail media for The Very Group.
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