15 August 2022
Retail media is forecast to triple in size over the next five years from $850 million to $2.14 billion. It has become one of the most talked about emerging media sectors – and for good reason. It has a unique, data-led approach based on real customer insights and closed loop reporting, adding real accountability to campaign investment. Just ask fan favourite Nando’s.
And it continues its growth trajectory.
What you need to know
The retail media ad market is on a growth trajectory. PwC forecasts up to A$1.2 billion in new revenue will enter the Australian advertising market over the coming five years2.
This growth almost triples the market size from A$850 million to A$2.14 billion.
There are five driving forces fuelling this growth; customer behaviour, privacy, ROI, relevance and trust.
With all the attention that is on retail media, it’s time to take a step back to really understand what makes it unique, the trends that are driving its growth, and how other brands are using it to drive success.
Retail Media is a rapidly evolving space and it’s incredibly unique to any other media solution, layering 1:1 customer relationships and precise targeting, unassailable context on the customer journey no matter where or how they choose to shop, and closed loop reporting for a layer of accountability to media spend.
Brands are flocking to retail media campaigns, marketers are creating their own ecommerce teams to capitalise on the ability that retail media has to influence sales and ROI, and retailers are expanding their media ecosystems.
With a predicted $2 billion market size2 forecast in Australia by 2026, and 50.8 per cent growth of the ecommerce component of the sector to reach $660 million in five years2, retail media is sure to remain hot property for brands.
The drivers behind retail media’s growth:
Changing customer behaviour
It starts and ends with the customer.
Customer behaviour has catapulted. Ease of access, information on demand, personalised and relevant messaging - these are no longer nice-to-haves, they’re must-haves. This behaviour has surged, driving online growth and leading customers onto an omnichannel path to purchase.
As customers shop where, when and how they like, real customer insight allows retailers to intimately understand their customers like no-one else can. This offers unique targeting capabilities for brands.
Hyper awareness of privacy
As the online world grows, so does the all important responsibility of customer privacy. To grow in the new digital era, marketers need a solution which can provide ROI, trust and longevity.
With the depreciation of third-party cookies and its impact on visibility over online audiences, first party data as we know it is going to increase in value. Awareness of and sensitivity to customer privacy is at an all time high and this is not going to change. Targeted customer-led solutions, based on real customer insight with accuracy and minimal wastage will provide an increasingly important solution in bridging the gap for marketers.
The holy grail of ROI
True ROI requires accountability, reliability and visibility.
The ability to reach and deeply understand real customers - from shopping behaviour and brand awareness, through to transactions - is where marketers find that elusive ROI holy grail. Retail Media’s closed loop reporting capabilities provide precise targeting capabilities, end-to-end transparency and clarity, all within a privacy compliant environment.
Keeping it relevant
It is a given that customers expect all communications with them to be relevant and personalised. Now more than ever, customers have access to what they need - when they need it, and are increasingly critical of comparing their various brand experiences. As customers are looking to be inspired and discover new products, it’s our role to meet them there, with the product they need. Relevancy has a crucial role to play in the customer journey and with granular targeting opportunities - drives success.
The glue that holds it all together - trust
As Stephen Covey, author of the internationally acclaimed book The 7 Habits of Highly Effective People, said: “Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.”
As a customer-led offering, trust is of utmost importance. High levels of trust in the retail environment means that brand campaigns can have more relevance, higher impact, real customer measurement and greater ROI.
Retail media owners have a responsibility to take trust seriously and put their customers first. Ultimately through trusted customer relationships, we can understand our customers better. We can understand their needs. And we can understand how to reach them, effectively.
This layer of trust powers brand campaigns through targeted solutions that meet customer needs. And when working across the Woolworths ecosystem with Cartology, there’s an additional layer of trust with a brand-safe environment under the banner of Australia’s most trusted brands.
With the growth of Retail Media, we’re seeing more clients enter the space and use Retail Media to its full potential.
When done right, it delivers results in sales overnight and customers over time.
Retail Media, the secret sauce in Nando’s acquisition campaign, delivered a 27% sales lift and 70% trial
Retail media provides brands with a powerful platform to connect with customers in a purchase mindset.
Fan favourite Nando’s was launching a new product range within Woolworths, with the key objective of attracting new customers and inspiring usage. To help realise this ambition Cartology developed a content-led, omnichannel solution to fuel discovery, provide mealtime inspiration and drive customer conversion.
Informing and inspiring content in Fresh Magazine and social fuelled awareness & discovery, with content adapted for digital screens at the front of stores triggering top of mind awareness and driving traffic to the aisle as customers entered the store environment.
Our solution delivered a 27% sales lift, with 70% of those purchasing being new-to-brand customers, exceeding Nando’s ambition. Of the 70% first-time buyers, 13% went on to repurchase products from Nando’s range over the next week, showcasing the immediate impact of sales overnight and the enduring value of customers over time.
“This content-led through-the-line campaign allowed us to bring the Nando’s brand to life for existing and new Woolworths customers. We targeted customers pre-shop with inspiring recipe content - this ensured the Nando’s brand was top of mind for shoppers once in-store, which is reflected in the sales uplift we saw over the campaign period.”
— Laurence Morris, Managing Director: Nando’s PERi-PERi Australia.
What next for Cartology and Retail Media?
As retail media evolves, we’re pioneering the space and we’re excited to see it getting a shake up! We’ve officially announced our partnership with BIG W - an exciting next chapter of our growth unlocking the BIG W platform for brands to connect with the brands Aussie families love to shop.
In the US, respected business journal Forbes calls retail media networks “one of the most important trends of 2022” and digital retail media spend alone will top $US41 billion this year, up by $US10 billion on 20211.
The local trend of ongoing Retail Media growth is very much here to stay, creating a $2 billion sector2 by 2026.
“Given the rich real-world purchase and interaction data retailers hold, shifting from cookies to real people, this may be a powerful opportunity for both brand and even performance advertising,” the PwC report notes.
Brands have a huge opportunity to be part of that growth and drive real and sustained impact with customers.
2 PwC Australian Entertainment and Media Outlook Report 2022-2026