Digital retail media
It seems somewhat counter intuitive for a retailer to offer other retailers the opportunity to advertise in their store, but that is effectively what many of them are considering and doing now. It could be a very lucrative opportunity for them –too lucrative to ignore, given that they are having to continually invest in new technologies just to keep up with their competition.
The opportunity is often referred to as Digital Retail Media. It offers the opportunity to retailers to place advertisements on other retailer’s e-commerce sites. It is estimated in an OC & C 2014 Strategy Report to be worth $1 billion in the UK alone.
It allows the advertiser to target shoppers on other retailer’s e-commerce sites, with their own ads. Revenue is produced not just by the consumer purchasing, but also by them clicking on the ad. So the “host “retailer is effectively renting out their virtual store space to allow other retailers to target their browsers and entice them onto their site. One click will take them to the advertised product.
.An obvious concern would be that the shopper might be distracted from their intended purchase, bur research appears to indicate this is not the case.
It may be that targeting a consumer while they are in spending mode will be successful .If the content of the ad is considered and selected carefully, so that there is no conflict, it could be a great plan.
Let’s look at some examples
For example if someone is on the site of a shoe retailer, it may not be a good idea to allow other shoe retailers to advertise to them. You don’t want to lose your own potential sale! But perhaps a handbag retailer might enhance the purchase? Or a clothing retailer. So you are encouraging the consumer to purchase add-ons.
Similarly if someone is buying fridges and freezers, they may be a great target for a housewares retailer.
Someone shopping for bridal gowns might be a great fit for advertisements from florists, photographers, limousine companies, men’s suit hire companies, even hotels and caterers.
When people are in buying mode, it may be the perfect time to advertise to them, and if the retailer can control the content to ensure there is no conflict with their merchandise, and make money from selling space on their website –what’s not to like?
Retailers would need to be protective of their brands reputation and credibility, by ensuring the quality of the ads is on a par with their own content and are not too intrusive. They don’t want to obscure the consumers’ journey and experience with them.
Who has the necessary skills and expertise?
This kind of advertising, calling for expertise in media, sales and technology, is a skillset that may not exist within many retailers infrastructure. Many will contract it out to a third party, which may make protecting the brand and selecting the correct content a little more difficult for the practitioner.
It will not be long though until retailers have developed in house resources to achieve their Digital Retail Media objectives. This could be a great career to enter now !!
This shift is almost certainly on the way – in the USA, eight of the top ten retailers have already implemented this strategy. The rest of us will undoubtedly follow where they have led.