Competition between retailers is fierce, particularly with the threat posed by discounters. The rise of the digital natives such as Amazon and Alibaba continues to disrupt the traditional retail model, particularly with recent moves into bricks and mortar spaces in the race for market share. Amazon acquired Wholefoods in 2017; in 2018 JD.com announced plans to open 1,000 convenience stores every day across China.
With customer shopping habits also changing on a massive scale, retail profit is in decline for those traditional brands that are not adapting to the disruption.
Tom Langley, global head of media capabilities at dunnhumby media, advises retailers to consider their future strategy – especially how and where they make profit. Langley says, to stand a chance in today’s retail space, retailers need to look at new revenue streams to stay relevant and profitable.
To do this, there are an increasing number of retailers taking on the role of publishers. Langley points out that retailers are in a powerful position right at the point of purchase for a customer, as they are making fast purchase decisions and choosing between brands, so it is a great place to be to try to influence their choices.
Using their own vast and valuable customer data, largely related to habits and historical purchases, as well as further data they might hold through a loyalty programme, a retailer knows their customers better than anyone. They might be able to accurately predict what they will buy and therefore uncover new opportunities for brands to make their messages resonate more meaningfully. As a media platform, a retailer can offer multi-channel campaigns that target shoppers more relevantly across their journey from sofa to store, browsing to purchase.
Langley says the most important consideration for retailers as a media platform is where the customers are. Instead of digital media or store media, they should think about customer media. Knowing where their customers are will help them to create the right message for the right environment, reaching them at the most relevant touchpoints on their path to purchase.
Media should work for both the retailer and the advertising brands, so striking the right balance between the objectives of both the retailer and the brand is key, says Langley. Brands can benefit from gains in media efficiencies by communicating more effectively to the customer. Retailers can provide closed-loop measurement, revealing how advertising actually impact sales.
Retail media is about striking the right balance between all these objectives, ultimately helping customers navigate their way around a store, being served relevant messages and experiences at particular moments.