These days, there is a surplus of industry shifts, especially with the relatively new emergence of retail media networks. Retailers recognize that providing an exceptional experience for shoppers is vital, so building consumer trust and transparency is a priority.
While there is a ton of opportunity in the retail media world, there are still challenges. Those opportunities and challenges were top of mind at the 2023 IAB Connected Commerce Summit: Reimagining Retail Media event, where industry experts expressed their views on prioritizing consumers’ needs and the importance of privacy as a trend and strategic imperative.
Driven by technological advancements, changing consumer behaviors, and the need for effective audience engagement, brands are embracing that the future of retail is omnichannel. Likewise, publishers — as partners of retail media networks, providing offsite access to an extended audience — are walking the customer-centric walk.
Prioritizing a Consumer-Centric Approach
During the “Building Consumer Trust in Retail Media” session, all panelists agreed that putting consumers first does wonders for your business. Yes, your relationship with your partners and intermediaries is essential, but the most important relationship a brand or publisher can have is the relationship with their audience.
“Consumers need to be at the center of everything, as your relationship with consumers is more important than the advertising,” explained Peter Barry, Vice President of Addressability at PubMatic. “What you do with data, what sort of partners you work with, you have to look through that consumer lens.”
The value exchange you demonstrate with your consumers is a win-win because retailers benefit from profitable business lines that allow them to reduce sales fees, which is a plus for the consumer.
Danielle Brown, Senior Vice President, Data Enablement and Category Strategy at Disney Advertising Sales, made it clear that at Disney, the customer experience always comes first, from their theme parks to their streaming platforms.
“We have spent years building a proprietary audience graph, allowing us to target consumers with highly relevant ads,” Brown said. “The goal is to provide consumers with content and advertising that resonates with their true needs and preferences.”
Transparency and building consumer trust are primary aspects of the retail media business. Since retailers have a surplus of consumer data, responsible data handling is paramount. With this data, retailers can provide valuable consumer insights and media consumption behaviors, closing the attribution loop. That is why starting with a healthy commitment to transparency is the key to success.
Privacy Management: Transparency’s Three Dimensions
When communicating your value exchange, it is necessary to consider consumer privacy as a strategic choice. Why are we collecting their data, and how does it improve the consumer’s experience? Communicating why you are collecting their data and how it improves their experience can go a long way to building and maintaining trust. Transparency is key.
Agencies also play a crucial role in ensuring a better consumer advertising experience, so they must hold themselves accountable for respecting consumer data.
Transparency has three dimensions, according to Amie Owen, US Head of Commerce at UM Worldwide. “First, building trust with your consumers is important by clearly demonstrating the value exchange. Second, it’s best to be transparent with clients, ensuring that all activities are shared and the learning is mutual,” she stated. “Third is nothing other than simplification. Simplify the processes for retailers, consumers, and your internal teams.”
Shifting from Retail Media 1.0 to Retail Media 2.0
There is a shift happening in retail media from Retail Media 1.0 to today’s Retail Media 2.0. In the early days, Retail Media 1.0 consisted of retailers realizing the power of media revenue and using their platforms to display ads and monetize their audience. Sounds like easy money, right? We’d say so, but things are changing now as consumer expectations changed.
Retail media 2.0 looks at consumer behaviors to focus on their wants and needs, creating the need for a more sophisticated approach. This new version of Retail Media is about establishing a more integrated and collaborative approach between retail and media, focusing on standardization and better measurement practices. It also addresses the challenges of major players like Amazon and emerging Chinese platforms like TikTok, Shein, and Temu.
During the “Retail Media 2.0: Balancing Personalization and Monetization” session, panelists stressed the importance of embracing a 360-degree approach. Seamlessly integrating physical and digital retail experiences can lead to substantial growth and better monetization.
Looking Forward to the Future of Retail Media
In the future, AI will play a critical role in retail media, just as it is in every other aspect of digital media and ad tech. For now, AI is being used to redefine data segments and provide personalization for users. However, the long-term implications include machine learning systems taking over the more tedious tasks for shoppers.
There are several challenges and opportunities in retail media. These include standardizing measurement metrics, closing the gap with industry giants like Amazon, fostering a healthier retail media ecosystem, and building a more diverse talent pool. The future is bright, and while challenges exist, improving the consumer experience is crucial to navigating the challenges.