Why Retail Media Is Essential For E-commerce Companies and Brands?
Although there is a constant change that the world faces, some things seem to never change. One of these is people’s fondness for shopping and the other is their need to buy new products.
There is a wide range from daily necessities to monthly trends and seasonal product lists. We can say that consumers are constantly in search of some sort of product. At this point, the thing that pushes customers to buy products today is the advertisement.
Ads are inevitable as long as there are customers who want to buy new products. The reason for this is that the e-commerce business is on an incredible rise and this rise comes with competition. If you are an online seller, you probably aim to market your products and attract more customers.
As of 2021, it is said that there are 2.14 billion online shoppers worldwide. According to statistics, e-commerce product purchases will likely account for 95% of overall purchases by 2040. These ratios provide us with a great understanding of the online buyer potential and how frequently internet users engage in e-commerce shopping. Despite the increasing customer and purchasing potential, it is also necessary to consider the ruthless ecosystem where competition is increasing. Sellers and brands today have a hard time selling their products and getting the right product listings in front of the right customers.
According to Statista, only 2.17 percent of visits to e-commerce stores result in conversions, indicating 2 out of every 100 people.
Online sales have always required encouraging clients to carry out the entire purchasing procedure. E-commerce businesses need to differentiate themselves from the competition by enhancing the purchasing experience. Since the majority of their website visitors won’t make a purchase, finding ways to increase that rate should be a continuous exercise of our age. The question is;
How can you encourage more customers to see and buy your products?
At this exact point, the latest digital advertising solutions like Retail Media Ads come into effect. In addition to the competition, due to changing consumer behaviors, brands are turning to adopt new advertising strategies for changes in the way they promote their products. The time is now to leverage Retail Media Networks and interact with customers in their process of buying. According to eMarketer’s 2022 report, companies such as Amazon, Walmart, Instacart, eBay and Home Depot have announced that they are expanding their Retail Media Networks. And, recent research from McKinsey also reveals that 75% of non-CPG advertisers plan to increase their spending in Retail Media.
Rising potential of Retail Media for all
Walmart, for instance, is a great example of a retailer with a large client base and purchasing power. With Walmart Connect, it is utilizing its huge Retail Media Network and consumer base, offering brands the opportunity to promote their products directly to their customers. For the first time, Walmart collected $2.1 billion in advertising revenue globally according to its most recent financial report.
You might think that companies like Amazon and Walmart dominate the industry and it is beyond possibilities to reach these ratios but there are numerous opportunities within Retail Media now for shops of all types.
Retail media has significant effects on all businesses involved in e-commerce. It opens up a new source of income for online retailers. Consumers benefit from lower and more reliable costs, and these highly focused advertisements also tend to be more relevant and less irritating. Through the use of Retail Media Advertising, brands may broaden consumer exposure to their main marketing messages and product offerings across all of the retailers they work with.
Reliable and Futureproof
The value of using first-party data is very important because we know that third-party cookies will soon reach their expiration date. The data received from the retailer network is reliable for brands, and it is future-proof. It might have access to comprehensive and insightful data about consumers that would let you target and personalize your ads for optimal effect.
As above, this is the key reason CPG firms choose to collaborate with Retail Media Networks in 2021, according to data from eMarketer, 62% of respondents stated they were motivated by gaining access to the first-party data.
“The retail media space is too big to fail. It’s no longer a secondary focus for the retailers or brands. And it’s going to be one of the biggest areas of growth over the next several years.”
-Alex Johnson, VP of data and technology solutions at MediaLink
And although retail media has been around for years, recent technological advances have made the channel more appealing for marketers.
“Marketers can now tie online exposure to offline sales to make sure their media investment is paying for itself.”
-Johnson, the MediaLink exec.
A survey conducted by Merkle on retailers, brands, and CPGs around Retail Media highlights that;
- 81% of CPGs intend to increase their media budgets with Retail Media.
- 62% of CPGs seek to collaborate with retail media networks for access to their first-party data.
- 58% of CPGs anticipate a closer relationship with the retailer via Retail Media.
Owners of e-commerce businesses need to make sure their enterprise is always expanding. In these rapidly evolving times, it’s critical to comprehend what your clients desire and to experiment with every cutting-edge technological advancement at your disposal in order to enhance the customer experience. In this case, the benefits that Retail Media provides make the investment on it worthwhile.
Brands can benefit greatly from the reach and targeting possibilities that Retail Media provides. They can also separate target client segments and choose the campaign elements that are most appropriate for each group. As a result of this increased level of personalization, companies profit from having access to a retailer’s first-party customer data to target customers based on their unique requirements and develop relationships with them. Retail Media Ads, as opposed to other forms of media, gives advertisers the benefit of more directly tying their advertising budget to real sales or other customer practices.
ChannelSight. “Why Retail Media Is Essential for Brands in 2022.” ChannelSight, 13 July 2022, www.channelsight.com/blog/retail-media. Accessed 10 Aug. 2022.
“Global Online Shopping Conversion Rate 2018 | Statistics.” Statista, Statista, 2018, www.statista.com/statistics/439576/online-shopper-conversion-rate-worldwide/.
“How Companies Are Monetizing with Retail Media Advertising in 2022.” Www.adbutler.com, www.adbutler.com/blog/article/Retail-Media-Advertising. Accessed 10 Aug. 2022.
Insider, Business. “Retailers Are Building Their Own Ad Businesses.” Business Insider, www.businessinsider.com/retail-media-in-2022-inside-brands-evolving-internal-ad-businesses-2022-2. Accessed 10 Aug. 2022.
Millman, Jonathon. “The Rise of Retail Media: How Stores Became the Next Big Thing in Advertising.” Silverline, 12 Apr. 2022, silverlinecrm.com/blog/media/the-rise-of-retail-media-how-stores-became-the-next-big-thing-in-advertising/. Accessed 10 Aug. 2022.
“The Evolution of E-Retail | Reports.” Merkle, www.merkle.com/thought-leadership/white-papers/evolution-e-retail. Accessed 10 Aug. 2022.
“Why Retail Media Is the Ad Industry’s Sleeping Giant | the Trade Desk.” www.thetradedesk.com, www.thetradedesk.com/us/news/why-retail-media-is-the-ad-industrys-sleeping-giant. Accessed 10 Aug. 2022.