Retail media networks are enjoying a meteoric rise to prominence, but how do you know if they’re a good investment for your company? In this series, we’ll explore common misconceptions about these networks from both the retailer and brand perspective, providing you with everything you need to know to make informed decisions when it comes to retail media commitments.
If you’re a retailer, you know a thing or two about the shoppers propelling your operation. Plus, you have the channels to reach them when they’re already in a buying mindset. Both of these facts make a retail media network (RMN) offering a no-brainer.
But that doesn’t mean you’re in the free and clear. The degree to which you can take advantage of marketing, media and trade budgets will all depend on the audience targeting capabilities you’re able to offer, which in turn depend on having sufficient audience scale.
What happens with known audience scale?
There are plenty of challenges when it comes to launching a retail media network, like getting the right tech stack in place and managing costs. But data and reporting can quickly become a massive roadblock to your success. The first question you need to ask yourself is whether your first-party audience is large enough. The biggest con to an insufficient audience is that you’re automatically limiting how much brands can spend on your RMN. In other words, you’re leaving money on the table.
The issue also affects your bottom line whether you’re working with small or large brands. Without audience sufficiency, large brands will spend more on third-party data, or will not spend as much. This leads to generic audiences and over-delivered impressions.
A brand with a $200K budget for a four-week campaign, for example, may only be able to spend $75k to get the right reach and frequency for a positive ROAS. For smaller brands, a lack of first-party data gets in the way of adequately measuring ROI—another key prerequisite for any competitive RMN offering.
Plus, you lose out the same way that brands do. Since retail media advertisements boost spend both for brand in-category and retailer category, you’re also missing out from a sales perspective. To satisfy brand expectations and maximize your return, you need to make sure the audience you’re connecting brand partners to is expansive and comprehensive enough.
What’s missing from your data set?
Yes, you have shopper data. But do you have enough? Usually retailers lack sufficient scale because they aren’t able to identify and understand all of their shoppers. Ask yourself:
- What percentage of your shoppers are known?
- How many individuals visit and patronize your store that are not captured in your 1P audience?
- To what degree of granularity do you currently understand shopper preferences like day-part, price sensitivity, preferred items and frequency?
This is often a challenge in the brick-and-mortar setting if you lack mechanisms to identify and understand the individual behind the transaction. Loyalty data, a popular form of first-party data, also creates gaps in your audience. Not everyone signs up for your loyalty program, nor do those participants represent the average shopper at your store.
Fill in the missing pieces with enhanced first-party data
By expanding and enhancing your 1P audience to shift more unknown shoppers to known ones, you can build a holistic and complete view of your shoppers. This is where a partner can help you unite and enrich your current data set with identity resolution capabilities, as well as second and third-party data. You can also use identity resolution to associate “missing” loyalty transactions – or those completed by a loyalty shopper who failed to self-identify at checkout – with the right program member. Enriching your data also opens you up to more advanced segmentation capabilities.
Once you have a strong foundation, you can create more effective media spend that benefits both brand in-category and retailer category. But first, you need to make sure you have the right data partner—one who can help you identify unknown in-store shoppers and expand your understanding of purchase behavior beyond the loyalty audience.
Start enhancing your data with Bridg
Brands gravitate toward RMNs because retailers have the shopper insights they want—and the means to reach them when and where they’re already making purchases. But do retailers actually have these insights? Sort of. We help retailers set the foundation for retail media success by solving the audience sufficiency problem and creating dynamic campaign audiences that draw from over 300 attributes.
We enable a single source of verified shopper truth by identifying unknown shoppers and expanding your understanding of known ones with market-leading offline identity resolution capabilities—all in the name of RMN competitiveness and profitability. Contact us today to learn more.