The astounding pace of retail media growth has taken over industry headlines in recent years. And there’s still plenty of untapped potential to be realized. However, the next wave of the boom isn’t going to come from the same online corners as it has over the past five years. To continue delivering value to advertisers and consumers, retail media needs to switch gears.
The next wave of retail media growth will expand beyond online channels to harness the power of in-store moments and digital out-of-home (DOOH) technology.
Let’s dig deeper into the forces driving this trend:
The challenges to online retail media’s continued growth
Retail media is expected to be the fastest–growing ad channel across media through 2027, growing by more than 20% each year. But, as Emarketer notes, it’s “not invincible.” Limitations to continued online growth include:
- Lack of standardized measurement across retail media networks (RMNs)
- Lack of standardized ad formats across RMNs
- Difficulty coordinating retail media spend across programmatic display, social media and CTV
Given the growing complexity of the digital media landscape, it’s not surprising that advertisers are seeking more simplicity. In a Bain & Company survey of hundreds of advertising decision makers, 50% of US advertisers said they expect to consolidate their spending with a select few RMNs. On average, they do not want to work directly with more than six at a time. And yet there are more than 200 retail media networks vying for advertiser consideration.
At the same time, most consumer spending is still happening in stores rather than online, where the majority of retail media dollars are being spent.
Expanding retail media’s reach and impact
As the retail media landscape matures, advertisers expect their retail media dollars to do more, particularly within store environments. Emarketer expects in-store retail media ad spending to triple between 2024 and 2028.
The retail media experience has to evolve into a more integrated one that enables brands to use their retail media dollars to target audiences across mobile, video, in-store and near-store activations. This approach delivers impact across the funnel, driving awareness, consideration, intent and purchases, all within a single initiative.
In-store retail media networks are integral to modern advertising. The ability to place your brand in a dynamic environment where 75% of shoppers pay attention to advertising, while also reaching consumers at the point of purchase, is a powerful and unique advantage.
Google Android recently launched its first campaign using an in-store RMN from T-Mobile Advertising Solutions, amplifying the campaign with near-store extension on nearby DOOH screens. Consumers near T-Mobile locations are encountering video ads for Android devices, including information about T-Mobile stores where the product can be purchased. Potential customers can then visit that location, where another ad from the same campaign (this time delivered on an in-store screen) spotlights Android close to the point of sale.
This approach enables Android to strategically own both the last mile and the last three feet of the customer journey, driving increases in key metrics across the funnel, including brand awareness, brand consideration, purchase intent and in-store sales.
Powering the future of retail media success
The future of retail media will focus on enhancing the in-store experience. In practice, here’s what that’s going to take:
- The ability to deliver engaging ads at the point of decision: In-store screens should display captivating ad content close to the point of purchase. The messages delivered at the point of sale should be the culmination of a broader ad experience that encompasses near-store screens as well as other digital channels.
- Flexible and effective campaign execution: Advertisers need to effortlessly reach shoppers and quickly launch and adjust their in-store retail media campaigns through a streamlined process.
- Full-funnel measurement: Networks need enough scale to ensure metrics such as sales and brand lift are boosted and reliably measured. Furthermore, they need to be integrated with retailers’ point-of-sale systems to enable measurement for lower-funnel metrics like sales lift.
- In-store support: Dedicated retail sales teams can serve as a valuable resource to customers, offering in-person support and expert-level knowledge of store products. Ideally, advertisers can offer exclusive deals as a part of their campaigns, further incentivizing customers while enriching their in-store experience with rich, high-definition media content.
The retail media boom isn’t over, but it is evolving. In the coming years, we’re going to see retail media’s online origins unite with high-impact, high-touch in-store experiences to drive impressive (and measurable) results.
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