At the start of the year, I wrote about why aggregators are the future of retail media and what brands need to do in response to this: invest in software that aggregates reporting and activation from self-service retail media platforms (RMPs).
The US market shows just how critical these platforms could become to the UK. Since my earlier article, Walmart announced it brought in $2.1bn of revenue from advertising, with half of this coming through its self-service RMP. To put that into perspective, this puts Walmart at nearly the same scale as Pinterest as a media owner. Amazon, which has led the way in making its media inventory completely self-service via an RMP, announced advertising revenue of $31.2bn in 2021, a growth of 58% in comparison to 2020. This now makes Amazon the fifth largest media owner in the world.
With Tesco recently launching its own retail media and insights platform, and other retailers following suit, RMPs will become the norm over the next 12 to 24 months for UK grocery retailers and CPG brands. When you look at some of the results that have been announced by the likes of Walmart in the past two months, you can see why this is a no-brainer for many retailers.
This surge in advertising revenue in the US is down to two key things. RMPs have made retail media more accessible and transparent for both brands and agency networks to purchase at scale, enabling them to attribute media to a sale directly. On the flip side, it has also allowed retailers to expand their media inventory outside of the traditional in-store and dotcom media channels associated with retail. Walmart, for example, partnered with the trade desk to build its own demand-side platform (DSP), allowing brands to buy media such as social and digital display at scale and connect it back to a sale in-store or online – with Walmart’s own first-party customer data being used as a USP.
For those working in the retail media industry in the UK – be that retail or brand-side – the introduction of RMPs is going to create a substantial change. Naturally, a lot of time by the retailers will be dedicated to setting themselves up with an RMP and upskilling their brands on how to use and buy media through them.
However, UK retailers will need to be cautious they do not automate their entire relationship with brands via these self-service platforms. The magic of retail media and marketing comes when retailers and brands collaborate – they work together to think of a creative idea that is aligned to both the retailer and brand’s mission. This idea is then translated into a retail media campaign, creating and serving a joined-up message between brand and retailer across the path to purchase, which is tailored and relevant to their bullseye shopper.
A recent example of this is Budweiser partnering with Co-op as part of the retailer’s ‘Co-op26’ campaign, to highlight their move towards 100% renewable energy. The beauty of this campaign was it allowed Budweiser to highlight its mission towards sustainable practices, whilst also being closely aligned to Co-op’s mission and what’s important to its shoppers. To me, these types of partnerships are unlikely to be achieved via an automated platform, because it requires deeper collaboration to really identify an idea between brand and retailer that could be magic. Besides, retailer media is there to elevate or improve a shopping experience – this cannot be forgotten by retailers in the pursuit of growth from advertising revenue.
In summary, brands in the UK will see a continued shift towards automation of the retail media process in the next 12 to 24 months. This will give more control to brands on what and how they are buying their media, whilst also giving retailers the ability to expand their media estates. The key thing to watch out for is ensuring the magic of retail media is not lost through an automated, self-service platform. Great marketing in retail comes from a close partnership between brand and retailer, to create something special that resonates with the shopper.
For me, the retailers that remember this will feel the greatest benefit of this industry shift, whilst still maintaining the magic of what retail media can offer.
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