Why Retail Media is Essential for Performance Marketers

Retail media has become the next ‘hot’ high-growth channel, taking share from ‘traditional’ advertising giants such as Meta and Google. Retail media is projected to reach $100 billion by 2027 in the U.S. alone, and up to 17% of all digital advertising spending between now and 2026.

There has been a ‘gold rush’ into retail platforms, for example;

• 92% of advertisers are actively partnering with retailers to reach consumers.
• 74% of brands have dedicated budgets for the retail media networks
• 87% of consumer packaged goods (CPGs) have planned to increase ad spend in retail media networks largely due to the strong performance of these channels. 

The Difference between Commerce and Retail Media

Commerce Media is an umbrella term for a diverse channel mix in which commerce data can be used as a targeting lever to reach target audiences. The Commerce Media ecosystem creates a symbiotic relationship between customers, brands, and retailers. 

Shoppers – simply and quickly find products they are looking for,  or are offered product recommendations. 

Retailer – monetizes its digital real estate to drive sales.

Brands – gain exposure to new and existing customers.

Retail Media relates to promotional marketing placed by brands at or near a point of sale. This could be online or physical in a store, online, these media placements are akin to a ‘digital shelf’.

Factors driving retail media growth

1st party data

The decline of third-party cookies and the need for brands to evolve their approaches to targeting consumers. 

Focus on retailer margins

Increasing pressure on retailers to find new sources of revenue to improve margins is driving continual innovation.

Delivering Brand Sales 

Brands face ongoing challenges to drive sales in low-growth, highly competitive markets.

“A combination of factors such as the possible decline in cookies, understanding the importance of first-party data, and online shopper behavior is driving this growth. Retailers have a wealth of first-party data on their customer’s shopping habits, offering brands a targeted advertising solution right at the point of purchase. Additionally, the growth of e-commerce has created a massive audience of engaged shoppers, making retail media an attractive channel for brands.”

Jasvinder Singh Bindra, Commerce Media Director, M&C Saatchi Performance

Retail platforms by market

The growth of retail media is a Global phenomenon, but the platforms differ across countries, with Amazon dominating throughout. For example, in the U.S., Walmart welcomes over 150 million customers weekly and has seen digital ad impressions increase 50% year on year. In the UK, Sainsbury’s, Tesco, and Asda all vie for customers, and in India, Flipkart leads the field, with Myntra and IndiaMart following. Strategizing which platform will generate the best performance results requires careful planning, especially while running other performance media campaigns. Learn more about the various platforms in our free paper, ‘Why Retail Media is Essential for Performance Marketers,’ we examine the top retail platforms in markets such as the US, UK, India, and SE Asia.

“As technology evolves and data privacy regulations become standardized, we should expect explosive growth to continue. With even more sophisticated targeting and measurement capabilities across Commerce Media. will likely become a central pillar of any brand’s advertising strategy, working alongside traditional channels to create a holistic marketing approach.”

Jasvinder Singh Bindra, Commerce Media Director

Learn more about our Commerce Media services here, and contact us for more information about how we help clients with Retail and Commerce Media ambitions.