Developing a Retail Media Network? Establish a Comprehensive Identity Strategy First
Revamped Retail Media Networks:
In the age of media networks, retailers are broadening their reach, multiplying income streams, and revolutionizing their customer connection potential. As per a recent eMarketer report, after a staggering 48% increase in e-commerce channel ads spending in 2020, this year's spending will rise by 27.8%. One out of every eight digital ad dollars will be allocated to advertising on digital properties. Moreover, Boston Consulting Group predicts that retailers are vying for a $100 billion high-margin yearly revenue prize in retail media.
The driving force behind this shift is that customers have high expectations from brands, but many advertisers, such as brands and suppliers, lack sufficient first-party data connections to fully grasp customers and meet their desires. To establish a media network, retailers must examine all customer interaction points, including point-of-sale, website, customer service, billing, and brick-and-mortar stores. Once all the first-party data sources have been identified, a solid identity strategy is crucial to linking these touchpoints and building a more expansive media network than competitors.
A powerful data strategy serves as an organization's competitive advantage. However, as part of the data strategy, retailers need to control their customer identity. Creating an accurate and cohesive identity layer across fragmented data sources forms a strong foundation for collaborating with advertisers, executing campaigns on a retail media network, and assessing precise customer insights. Retailers evaluating solutions to build and maintain their own customer identity generally weigh three fundamental components:
- Identity Creation: Utilize interoperable solutions that complement existing technology investments and enable first-party identity as the base of the data foundation. First-party data resolution enables the creation of retailer-owned customer views.
- Identity Enrichment: Leverage collaborative second-party data and top-tier third-party attributes to enhance customer views and strengthen customer intelligence. A flexible, privacy-conscious technology is needed to configure the retailer's graph and augment it with second- and third-party insights.
- Identity Translation: Utilize a robust identity framework, acting like a "Rosetta Stone" for a retailer's data, seamlessly translating from multiple identities into a cohesive "language." The aim is a consistent integration across the organization, technology stack, multiple data sources, and any number of marketing activation and measurement partners. Translation should be fast, secure, and interoperable across all channels where the customer is engaged.
With a strong identity strategy in place, retailers can capitalize on and differentiate their media network by offering several benefits to advertisers, such as:
- Retaining shopper marketing dollars: Historically, shopper marketing dollars have been spent on end caps or in-store marketing. As delivery and on-demand services rise, these methods become less valuable and effective. Retailers can maintain and grow shopper dollars by allocating spend to online placements. By using first-party data, both retailers and advertisers benefit from delivering more accurate and relevant marketing to consumers. With a media network, retailers are poised to take advantage of and monetize the shift to digital.
- Engaging consumers where they shop: Through placements on a retailer's website and owned properties, brands can reach buyers in a digital context. On-site advertising generates new site traffic, and retailers and brands can also reach existing customers at the optimal time—while they are shopping. By extending offsite audiencereach, retailers can help brands effortlessly find and engage with new customers across the web, providing more brand-customer touchpoints and conversions.
- Driving product development: By leveraging a data-driven and identity-based strategy, retailers and their brand partners gain more robust customer intelligence, understanding evolving consumer needs. Today's consumers expect personalized products that suit their interests. By working together, retailers and brands can meet shopper preferences with better-informed research and development. Pioneering partnerships can iterate quickly and reach interested markets with innovative offerings and products.
- Deepening advertiser relationships: Retailers can surface unparalleled consumer insights to boost sales and cultivate brand relationships. Transactional data represents a virtual treasure trove when appropriately leveraged. For example, brands can leverage closed-loop measurement to improve persona profile definition, audience targeting, and campaign optimization.
Retailers now have a wealth of tools at their disposal to bolster profitability and achieve customer engagement that drives higher levels of loyalty and overall spending. With a focus on building an identity framework and technical infrastructure that provides greater control over the customer experience and better visibility into their actions and patterns, retailers will secure a more significant competitive advantage.
- The integration of AI and technology in retail media networks opens up the possibility for extensive research and development, where retailers and their brand partners can collaborate to innovate and create personalized products that cater to consumer demands.
- The evolution of war in the digital marketing landscape requires retailers to invest in advanced technology solutions for identity creation and enrichment, ensuring they stay ahead of competitors and retain shopper marketing dollars, previously allocated to traditional methods like end caps and in-store marketing.
- In order to maximize their business potential, retailers must establish a technology-driven media network that regularly engages consumers where they shop, not only on their websites and owned properties but also across multiple digital channels, reaching and capturing the attention of new and existing customers.
- A strong first-party data strategy enables retailers to provide advertisers with deep, unprecedented insights into consumer behavior, fostering stronger relationships with brands and facilitating more effective marketing campaigns that drive sales and overall growth.
