Iman Nahvi, Co-Founder and CEO of Advertima, analyzes why 2024 could be a turning point for in-store retail media and what potential still needs to be leveraged in the invidis annual commentary.
Retail media, or marketing to shoppers at or near their point of purchase, isn’t new. What’s put retail media into hyperdrive is online’s ability to extract actionable insights from performance measurement and use personalized content and ads to build a real-time relationship with shoppers.
In 2023, US retail media search ad revenue was expected to grow at a rate nearly four times faster than the rest of search advertising. But let’s not forget that retail media is much bigger than online alone.
In-store retail media’s big opportunity
In-store retail media also has the potential to reach millions of shoppers, especially those who aren’t available or easy to reach via online channels.
Most grocery retailers agree that nearly 80% of their shoppers are exclusively in-store. McKinsey predicted that, on average, 80% of European grocery and FMCG shoppers are and will remain in-store well into 2030. When you consider shoppers who buy online and in-store, the number is likely higher.
With retail media’s global share of FMCG marketing spend (trade marketing, shopper marketing, and media) expected to grow from US $194bn in 2023 to US $400b by 2027, concentrating retail media efforts, innovation, and investments exclusively to online shows limited thinking.
Retail media networks and technology companies ignoring in-store retail media are missing major opportunities to monetize the huge percentage of shoppers who still prefer to shop in-store.
In-store retail media’s tipping point
Retailers are under pressure from advertisers to track, engage, and report across in-store shopper audiences in the same way as online. In short, advertisers want the same type of precise real-time targeting, automated ad serving, and shopper journey metrics from in-store as they get online. And without it, advertisers aren’t ready to start shifting budgets from other media channels.
The tipping point will come once retailers can prove their in-store retail media solutions and data sets are sustainable and verifiable. That means precise real-time audience segmentation targeting, automated ad serving, in-flight campaign optimization, and robust metrics that can be used for omnichannel planning and buying.
In-store retail media’s landmark year
We’re seeing revolutionary in-store retail media technology emerge, which is narrowing the retail media physical-digital divide. DOOH has set the stage, but we can go much further. Like many, our company believes that 2024 will be a landmark year for in-store retail media as significant technological change and unprecedented revenue opportunities loom.
We’re reaching a point where retail media omnichannel advertising signifies a unified approach to measure audience interactions and conversions both online and in-store.
So how do we get there?
In-store retail media’s fantastic future
Despite online retail media’s dominance, grocery stores, in particular, will continue to remain at the center of the retail experience. As in-store retail media comes into its own, technology companies already operating in the connected retail space are a natural fit to integrate into the existing in-store ecosystem.
Real-time technology that lets retailers precisely track, segment, engage, and report on in-store shopper audiences now exists and critically operates within and adheres to a privacy-preserving framework. In-store retail media can look to sensor technology for more conclusive sales uplift measurement and closed-loop measurement enablement, which is what’s made online retail media so successful.
Our company, along with visionary technology and retail partners, has been at the forefront of achieving ground-breaking in-store retail media change. Real-time unified audience segments, automated programmatic trading, and more meaningful shopper experiences are some of the fantastic ways that in-store retail media will successfully realize its digital ambitions.
While 2024 may be a landmark year for in-store retail media, our company expects that by the end of this decade, retail media will have completely disrupted the media space and taken over as the world’s largest media category.
Bringing automated real-time performance media capabilities and metrics to in-store gives momentum to a consolidated omnichannel retail media future and empowers retailers and advertisers to realize in-store retail media’s full potential.
