Despite findings by the ONS that retail sales beat expectations in August, fluctuating consumer confidence is continuing to create volatility in the retail sector. However, amidst this unpredictable environment, a promising new revenue stream has emerged that retailers should consider embracing: offsite retail data. This is a growth engine for the retail media category overall, which is the fastest growing form of ad spend with global spend expected to reach $140 billion this year and comprise over 20 per cent of total digital ad spend.
Retail media encompasses a number of different opportunities for retailers. ‘Shopper marketing’ is generally used as an umbrella term which covers the broader opportunity in retail, from physical in-store ads to product suggestions on online stores.
Retail media also helps advertisers measure the impact of their campaigns with greater accuracy, both during and after its conclusion. While on-site advertising has worked well in the past, it is limited to insights from the retailer’s website. Brands are increasingly looking for greater measurement capabilities to understand the impact of all their paid media activity on both online and in-store sales.
Sitting underneath this retail media umbrella is ‘offsite retail data’: where data is de-coupled from the retailer’s own websites and apps and made available to power and optimise a campaign across digital channels on the open internet, including premium streaming TV services. This is particularly exciting for advertisers as it moves retail media from just being a “direct sales” media channel to a broader brand building opportunity.
With consumers living and working across multiple channels, retail data plays an invaluable role in making sense of consumer behaviour, learning who to target and when to meet customer acquisition objectives.
Andrex is a key example of a brand using retail data to expand its customer base. Using Ocado’s verified buyer data, The Trade Desk helped Andrex to better understand where and how they could reach new customers on the open internet. Based on the insight, the campaign was activated across connected TV and podcasts. This resulted in an impressive return on ad spend over five times higher than the target, by leveraging the data to optimise purchase conversions.
Unlike Big Tech, retail data provides the objectivity and transparency that the walled gardens lack. Retail data means closing the loop between digital advertising and sales on- and off-line, helping brands to measure the impact of each tactic. This also enables in-flight campaign optimisation to adjust any metrics that are falling short.
This shows the potential opportunity for retailers who enter this space to act as a valuable player and contender to established names.
Closer collaboration between retailers and advertisers means they can anticipate future trends earlier. Taking alcohol brands as an example, retail sales of no- and low- alcohol drinks have seen a dramatic increase particularly during the Euros this summer. Retail data provides brands with insights into the types of products customers are getting excited about, and when they’re choosing to buy them. Thanks to this insight, retailers can help advertisers prepare for upcoming trends and stay ahead of the curve.
These benefits mean there is a clear appetite from brands to work with retailers in this new way and offers a strong commercial potential for retailers. In fact, we can look across the pond to see the opportunity: Walmart’s advertising business grew by 28 per cent in 2023, making it worth $3.4 billion.
Retail media is growing exponentially, and the collaboration between retailers and advertisers in their retail media strategy can reap huge rewards. By tapping into the rich insights of retailers, both they and advertisers can measure campaign performance in real-time and after its conclusion to adjust and make campaigns as relevant as possible. This data can help both parties to close the loop between advertising and sales both on and offline, better placing retailers and advertisers to target their consumers as accurately as possible.
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