Retail Media is Shopper Marketing For the Digital Age

Sarah Wheeler
Sarah Wheeler
Retail Media is Shopper Marketing For the Digital Age

Retail media is a $100 billion dollar industry, and it’s time your brand invests in it.

Though ads are traditionally associated with news sites and social media, retail media is bringing them to eCommerce.

Not taking advantage of this shift is like an empty grocery store aisle: a waste of valuable real estate. Knowing this, many brick-and-mortar brands have built ad platforms that allow suppliers to promote their products across the retailers’ sites and apps.

Take Walmart. They recently launched their new ad platform, Walmart Connect, leading to a thriving, high-margin revenue stream with quarter-over-quarter ad revenue growth of 95%. As their overall e-commerce business grew by 79%.

walmart connect

This notion of charging for a premium spot shouldn’t be new: if you’re a retailer, you monetize your in-person experience through shopper marketing, often negotiated through trade and co-op dollars with suppliers/manufacturers. Why should your web experience be any different?

In this article, we’ll explain how retail media is the digitized version of in-store shopper marketing and how you too can launch an ad platform.

Shopper marketing 1.0 had its day

Shopper marketing influences customers by promoting products through aisle placements, print ads, and customized displays.

For years stores drove sales by cultivating an engaging in-person customer experience — and it worked great.

Many of these experiences involve deals between the retailers and their suppliers. In order to secure a fair price from Heinz, for instance, Kroger may offer them special placement in their store aisles, especially around summer holidays.

Shopper marketing benefits both retailers and their manufacturers: stores can monetize their physical real estate, and vendors ensure they are front-and-center to likely buyers.

shopper marketing

Though these partnerships still contribute to revenue, in-store traffic is dropping and consumers are moving digital. Around 42% of consumers, for example, now purchase groceries online at least once a week, and a majority said they will continue this permanently.

Covid contributed to this shift, but one way or another, eCommerce contributes to a bigger percentage of sales. It’s time to meet customers where they are and move shopper marketing online.

And, by doing so, you also help protect your existing trade and co-op dollars. Rather than see that money slowly erode, why not turn it into retail media revenue?

Retail media is shopper marketing 2.0

Your online shopping experience is the digital equivalent of in-person shopper marketing. Retail media monetizes this online space by allowing sellers to promote products throughout the users’ individual browsing experience. That direct relationship you have with your suppliers can extend to your website traffic too.

For instance, sponsored listings are eCommerce-centric ad units where vendors pay to have their organic listing promoted in search and browsing results, on the homepage, etc. These promote products seamlessly during the browsing experience, driving revenue from product sales and ads alike.

Similar to how in-store shoppers browse snack aisles and are influenced by a product's placement, with sponsored listings, customers browse your site and are influenced by what products appear in search results.

Through Walmart’s ad platform, for example, Dr. Pepper can pay so that when someone searches for soda, they are the first brand to appear.

retail media sponsored listings

Just as Walmart may have partnered with Dr. Pepper to secure special placement in the soda aisle, these sponsored listings give Dr. Pepper better visibility to someone searching for soda online. It’s a win-win-win: Walmart monetizes with ads, Dr. Pepper has the potential for greater sales, and the user experience isn’t negatively impacted.

Retail media isn't just search result ads. You can also have prominent promotions across the homepage and other browsing experiences. For instance, below, on the homepage of Walmart’s website, Thomas pays for a highly-visible above-the-fold spot.

retail media homepage ad

Prominent ads like this are not unlike premium front-of-the-store displays: vendors pay for the optimal spot to advertise their product. This is the first product customers see when they arrive, and it can change how they spend in store or online.

After all, you own the shelf space in your store, why are you giving away prime site spots to advertisers for free?

Your vendors want to migrate digital

You want to monetize your space — whether digital or physical — and, luckily, vendors are ready to pay. It’s estimated that 60% of ad spending will be digital by 2023, which includes your partners’ retail media budgets.

There are many reasons why both retailers and vendors are embracing retail media:

  1. Reporting - Previously, tracking the results in-store marketing was difficult. Retailers struggled to assign value to placements, and suppliers faced challenges with gaining insight to the impact of their dollars. With digital reporting, tracking, and attribution, retailers and advertisers benefit from ad dollar performance transparency and accountability. retail media homepage ad
  2. Campaign Management - It’s easier to launch an online ad campaign vs. reorganizing shelves across hundreds of stores. Before, if it were time to rotate an in-store display, it could take countless hours to do this at scale. With digital campaigns, all it takes is the push of a button.
  3. Targeting - With sophisticated targeting like time-of-day or frequency capping, retail media can offer your advertisers a way to reach users like never before. Keurig, for instance, may rather show ads in the morning when coffee is fresh on customers’ minds, while Cheetos may prefer late-night ads. This is easily done with a digital ad server, but not feasible in-store. retail media homepage ad
  4. First-Party Data - Because of first-party data, digital ads can be personalized to the user, leading to more purchases. In a store, personalizing shelves and displays is impossible; it remains static for everyone. On the other hand, with online traffic you can personalize all site/app content to that particular user. Sunkist, for example, could promote themselves just to people who bought OJ the week before.

Interest in retail media isn't theoretical. Brands like Walmart, Target, and Costco have thriving platforms, and even Instacart — who is not a retailer themselves — earned $300 million last year from CPG product ads and is aiming to hit $1 billion next year. Vendors and retailers alike are moving toward retail media.

How to get started with your own retail media platform

Building an ad platform like Walmart’s can be costly and time-consuming, but your competitors are growing rapidly with retail media platforms. With Kevel, you can implement one in just weeks.

Kevel is the leader in ad APIs, and eCommerce brands like Klarna, Rappi, Bed Bath and Beyond, and Cornershop use us to build retail media ad platforms in a fraction of the time and cost as doing it from scratch.

Let us know how we can help you start today!

Sarah Wheeler
Sarah Wheeler

Sarah is an experienced writer with a software background, allowing her to translate between ad tech experts and lay readers. As Kevel's content writer, she writes for the blog and social media.