Retail Media

Retail media: the new interface between marketing and e-commerce

In short, retail media is when brands display their ads in the various performance marketing formats of web stores and the big e-commerce platforms, for example in the form of banners, links to brand stores embedded in the overall catalog of products, or sponsored product ads. That reduces wasted coverage in comparison to traditional display advertising. In the USA, retail media already plays a significant role in the marketing strategies of companies. Many marketing CEOs in Germany are also recognizing its huge potential.

Millions of customers visit digital shopping platforms on a daily basis. Amazon Prime’s subscription system even ensures a long-term customer journey. It’s precisely here that major players have recently invested in database technology and their media services. For example, OTTO Retail Media moved from being a sister company of OTTO to being firmly integrated into the group as an independent division in 2020.

What role does retail media play in online marketing?

The retail media boom has only been able to develop so quickly due to a change in buying behavior, enhanced datasets, and detailed tracking. The following basic facts give you some insight into the trending topic of digital retail media.

#1 Change in buying behavior

If you take a look at the trajectory of e-commerce, you’ll see that the proportion of online shopping users rose to more than 80 percent in 2020 – a trend that is continuing.
Search behavior is changing as well, though. More and more users are bypassing Google Search and instead directly searching for products on the platforms of global sellers. That opens up completely new targeting possibilities to advertisers and broadens the horizon with regard to target group analysis.

#2 Shopatainment

Not only do customers want to buy, but they’re also after an experience at the same time. It will be very interesting to see what forms of digital entertainment will greet customers during their online shopping sprees in the future. This field is also only just starting to get off the ground, but initial campaigns have already been implemented.

#3 Big data

The big online stores have access to a phenomenal volume of datasets belonging to millions of people. Despite the imminent end of third-party cookies, e-commerce companies can leverage this data to the max – every marketer’s dream.

#4 Sales and trade marketing

Choosing the right digital sales channels has always been the crux of trade marketing. The advantage from a retail marketing perspective is that the POS (point of sale) is increasingly switching from brick-and-mortar retail to the virtual realm. Here, marketing experts are called upon to apply their expertise and seize the opportunities for branding and sales.

The win-win-win situation

Everybody’s a winner. Whether retailers, brands, or customers – they all profit from retail media. So, is it the most perfect marketing format since online advertising began?

It doesn’t just seem that way; the figures corroborate it. The German Retail Media Report found that 48 percent of those surveyed believe that retail media, when used correctly, has great potential for generating more sales. Brands gain a more in-depth understanding of the customer journey and can optimize their store presence or product portfolio in a targeted way. But that is just one of the many benefits. Customers also react positively to this kind of advertising, because it is perceived more as a recommendation and seems less intrusive.

Retail media – the international market is being shaken up

With all this in mind, the key is to stay alert to developments in this field, especially since other countries and international marketplaces are already one step ahead. Nonetheless, the retail media trend is also already underway in Germany, as highlighted by the fascinating discussions and keynotes on retail media at DMEXCO 2022. The revolutionization of online shopping, brand marketing, and customer experience has only just begun. Want to learn more about retail media? Our guide “Retail media: These are the insights you need to know” explains why this advertising strategy should be on your radar!