In the superheated category of retail media networks, first-party data can be a gold mine for delivering significant value to customers, partners and the entire enterprise. This has made these networks a powerful way to create new opportunities for data monetization, revenue streams, and brand equity using data collaboration.
By helping brands reach consumers in new ways and new places, retailers give their customers a better experience and strengthen partner relationships by increasing brand loyalty, better measuring performance and boosting sales.
With advertisers projected to spend upwards of $45 billion on retail media this year, launching a retail media network makes a lot of sense. However, it requires careful planning and execution amid a crowded marketplace. Here are five key steps you can take to establish a retail media network that drives transformational growth for your business.
Take Stock of Your First-Party Data
To launch a retail media network, you need first-party data at scale, at least 15-20 million unique customer records, to meet the market demand from advertisers seeking a specific audience, advanced activation and data collaboration opportunities. To distinguish yourself from competitors and attract big brands, identify the unique value of your first-party data assets and develop distinct go-to-market strategies.
Even smaller retailers can stand out by offering highly targeted advertising to a specific customer base. Any unique owned and operated properties online, in app or in store will also support differentiation.
Establish Transparent, Granular Measurement Capabilities
Retailers possess a ton of valuable conversion data, but making it actionable to advertisers can be tricky. That’s where a people-based identity framework can really help. It breaks down data silos and allows you to connect the dots, creating touchpoints across the full customer journey, all in a privacy sensitive way.
With this comprehensive view of the customer journey, you can prioritize closed-loop measurement. Offer detailed metrics, such as individual SKUs, so brands can understand which ad placements are most impactful and which products drive the most revenue in store or online. By offering measurement that’s much more transparent than advertisers have experienced with walled gardens, you can establish yourself as trusted a partner to the companies you collaborate with.
Keep Scale Top of Mind
It’s imperative that a retail media network can scale to attract brand advertisers and grow in alignment with marketplace demands. Research shows 99% of CPGs require access to 6 million shoppers or more in order to invest in a retail media network.
To support this, invest in ways to grow your first-party data through loyalty programs, new card acquisitions or third-party data appends. Consider adopting a membership-based model, or scale your network via partner enablement across verticals such as pharmacy or convenience.
Mitigate Risks Through Privacy-Centricity and Transparency
To maintain consumer trust, retailers must prioritize transparency with consumers and be clear about the value exchange for their data. You should also adopt stringent privacy policies that protect consumers’ personally identifiable information (PII), as well as controls that prevent unauthorized access or use of data without inhibiting data utility.
It’s critical to also be patient when launching a media network into a saturated market. It can take one to two years to start generating impactful revenue. Setting expectations with shareholders, investing in scalable infrastructure and prioritizing transparency with partners will allow you to build your network the right way, driving demand through unique data and customer insights.
Explore Opportunities to Partner, Learn and Grow
Data collaboration is the future. Partnering with brands carves a pathway for media networks to thrive in retail and other data-rich industries like travel and hospitality, entertainment, financial services and others. However, like the recent consolidation among streaming platforms, the market simply cannot support an endless influx of new media networks.
Most advertisers will only pick four or five retail media networks to participate in. Companies in other verticals will need to consolidate their assets together in expanded ways to scale and unearth richer customer insights.
In the meantime, retailers need to continuously evaluate their media network’s performance to address any weakness or evolve for market needs. Adding sophistication will be key to optimizing media, attracting more advertiser partners, and building brand loyalty. Ways to do this include providing self-serve access to insights, audience extensions or expanding measurement capabilities to cloud-based environments.
Despite having access to large amounts of first-party data, even the biggest companies in the world struggle to achieve a full view of their customers. There’s always something we can learn from our partners, which is why data collaboration is so important. Expanding the possibilities of retail media networks will further unlock the power of data to build enduring business value and deliver better customer experiences.
Kevin Dunn is VP of industry sales, retail and CPG at LiveRamp