Harnessing Retail Media Power for Non-Endemic Brands

The Rise of Retail Media

Retail media, traditionally centered around in-store displays, has undergone a dramatic transformation. Today, it encompasses a myriad of digital channels within retail ecosystems. Here’s a deep dive into its evolution and potential:

According to GroupM’s "This Year Next Year" report, global retail media is set to grow by 8.3% in 2024. This growth is driven by the extensive online and offline shopper data that retailers have amassed.

Retail giants like Target, with over 165 million shoppers in the US, and Tesco, with 21 million loyalty card members in the UK, hold invaluable audience data. This data is beneficial not only to the brands they stock but also to advertisers without a direct retail presence.

Why Non-Endemic Advertising Thrives in Retail Media

Non-endemic brands—those not directly tied to the products sold by the retailer—are discovering unique opportunities within retail media networks (RMNs). Examples of non-endemic brands include financial services like American Express or travel companies like Expedia, which advertise within retail environments despite not selling physical products in those stores

First-Party Data: Retailers gather critical first-party data from their customers, offering insights into consumer behavior and preferences that extend beyond their own product lines. With third-party cookies on the decline, 84% of US marketers are more inclined to invest in retail media due to this shift. For instance, a car insurance company like Geico can leverage this data to target potential customers based on their purchasing behavior at a retail store.

Targeted Audiences: Using transaction-based data, retailers can craft highly targeted audiences. Advertisers appreciate this precision, as it ensures their digital ad spend reaches consumers with proven purchase behaviors. For example, a bank offering credit cards can target high-spending customers based on their shopping habits at major retailers.

Loyalty Programs: Retailers with strong loyalty programs gain even deeper insights into their customers. These insights help create qualified audiences, making retail media attractive to non-endemic advertisers. A classic example is Starbucks, which can use its loyalty program data to offer promotions from non-endemic partners like travel agencies.

Contextual Safety: Advertising on retailers’ owned properties—both digital and physical—provides a safe environment for brands. This means no concerns about risky content or fake news; your ad appears alongside trusted content. For example, a luxury watch brand can safely advertise on the digital platforms of a high-end department store, ensuring brand safety and relevance. Ensuring your ads appear in the right context is crucial for brand safety and effectiveness. Partnering with experts who understand the intricacies of retail media can make all the difference. When you’re ready to take the next step, trusted professionals are available to guide you.

Scaling Revenues and Broadening the Pool

Large Retailers: Big players in commodity categories, like consumer packaged goods, often vie for ad budgets from endemic advertisers. Non-endemic advertising helps diversify their revenue sources. For instance, Walmart's collaboration with Netflix to create and promote exclusive merchandise tied to popular shows is a prime example of diversifying revenue through non-endemic partnerships.

Specialty Retailers: Smaller specialty retailers have fewer endemic advertisers. Expanding their ad inventory to include non-endemic brands broadens their revenue pool. A bookstore like Barnes & Noble, for instance, can partner with local restaurants or coffee shops to promote their offers within the store or through their digital channels.

Commerce Media: Beyond traditional retail, verticals such as financial services and travel are leveraging their first-party data to launch media offerings, increasing non-endemic advertising opportunities. For example, American Airlines can use its customer data to offer personalized ads from hotel chains or car rental services.

Recent Trends and Statistics

Survey Insights: A recent survey by Bazaarvoice revealed that 53% of brands are actively leveraging data and media opportunities with retailers that don’t carry their products​ which indicates that non-endemic partnerships are on the rise.

Revenue Impact: In the US, RMN revenue is expected to exceed $50 billion this year, representing nearly 20% of total digital ad spend​. RMNs are noted for delivering higher conversion rates because their ads reach active shoppers.

Whether it's a beauty brand collaborating with a grocery retailer or a financial service provider tapping into retail data, non-endemic brands are finding their place in the retail media landscape. The key to success lies in data collaboration, personalized targeting, and understanding the unique value that retail environments offer. Exploring these opportunities can be overwhelming, but there are partners who specialize in making this transition seamless. If you're considering leveraging the power of retail media, you’ll find tailored solutions designed to meet your unique needs with the right support.