What is Retail Media?
The largest online advertising platforms today are Amazon, Facebook and Google. In particular, income from advertisements at online retailer Amazon is growing rapidly. Amazon’s revenue from advertising in America increased by 144 percent last year. Advertising on Amazon is therefore a good example of the new type of advertising, namely retail media. Below you can read more about what this type of advertising entails and why it is so interesting.
Why Retail Media?
Retail marketing is particularly interesting and attractive for brands and manufacturers. More than half of the searches for products on the internet no longer take place with traditional search engines such as Bing or Google. Instead, the products are searched directly on market places and online stores such as Amazon. It is therefore obvious to move the advertising budget to where the search for products from customers takes place. The big advantage of this is that the products can be purchased immediately with one click. The platform economy has taken refuge in a few years.
Multilabel stores – increases visibility
The challenge for the brands and manufacturers is that although the products are often sold in the numerous multi-label stores such as Zalando, Otto, Amazon and Co., they are not necessarily found there by customers. Retailmedia helps to make a brand visible among the many other brands. This allows you to generate considerably more sales with just a little bit of advertising.
Significant increase in sales opportunity
This means that manufacturers and brands invest money so that their products get a better placement in online stores. Reaching a better placement than the competition can increase sales. So there is a shift from folders to online. This is a concept that is worth giving a chance. The chance of a purchase is greatly increased through the use of retail media. Something that we ourselves also notice at customers. As soon as AMS campaigns for customers are started, the number of sales increases. In addition, brand awareness can also be increased through retail media. Brands that are not top of mind with customers have no chance of succeeding in market places. That is why retail media is a great opportunity for brands to attract the attention of the target group.
Different forms of retail media
In the field of retail media, the number of different forms of advertising is increasing. One of the best known formats are the following:
- Sponsored products: this type of advertising is similar in nature to Product Shopping advertisements in search engines such as Google. The advertisement is displayed when searching for a specific product in the (Amazon) search results. The upper part shows the sponsored products. They also appear next to and in the organic search results. They are also displayed on the pages of similar products to lure interested customers away from the products of the competition. Both really big brands and small retailers like to use this special form of retail marketing.
- Video and display ads: it is also possible to use video and classic banner ads in many market places. However, these banners and videos do not link to the website of the brand in question, but directly to the brand shop on the. There, the purchase of the advertised products can be performed directly with one click. This can be, for example, a brand store that is integrated into the marketplace, a specific category of the store or a special landing page.
- Brand stores: the shop in shop concept is based on brand stores. This concept has also existed in traditional retail for some time. Here is a separate section where no competitive products are available. In the field of e-commerce, this means that a special online page has been set up in a large online shop for a brand that only offers offers from the manufacturer in question. For example, manufacturers are tempted by Amazon to present their product portfolio and history with a special look and feel.
- Branded Content, Influencer Marketing and native advertising: especially the large shops on Zalando and About You use this special form of retail media. A good example of this is the collaboration between Lufthansa and About You, who sent the influencer Debbi Flügge to Panama, of course with a suitcase full of About You clothing. As a story, many videos and photos of the trip were then published. This is a kind of native integration of advertising. There is a combination of product recommendation and content. This benefits both the brand and the product. Collabary, the Zalando advertising service, offers a service that brings together influencers and brands.
- Product Collaborations: this gives the brands very high visibility on the market places. Only one platform then exclusively sells the products. Examples of this type of retail media are the Puma collection at Zalando, the collaboration between Disney and About You and the Keller-X platform from Keller Sports.
A dynamic market
The retail media market is very broad. The segment is developing rapidly and dynamically. Currently, this is the market where advertising budgets grow the fastest. In 2018, sales in Germany alone amounted to 550 million euros and in 2019, sales of 800 million are expected. Moreover, there is already a consolidation of the market. In addition, platforms are setting up new companies to make better use of data. The Otto Group Media, founded in 2015 to improve user-based marketing, is on its way to success. A joint venture with Ströer is planned here. Ströer will bundle more than 50 million data from Otto with the help of OS Data Solutions. This would mean the largest amount of data in Germany in terms of behavior, e-commerce and login.
For customers this increases the quality of the targeting and reach. Of course it is important that the data of the partners and customers are well protected in order to maintain trust. For brands, advertising via retail media is becoming increasingly interesting and this form will continue to grow. Thanks to the large reach and good positioning, it offers many opportunities and possibilities to generate extra turnover with a better cost-benefit ratio than current channels.
Well-known players in omnichannel retail are supermarkets. These companies traditionally offer many opportunities for advertising opportunities. It offers brands and manufacturers the opportunity to advertise on the specific range of the supermarket. And the focus is also shifting from the classic brochure to the digital environment. An omnichannel approach is important here. The difference between offline and online retailers will therefore become increasingly blurred in the future. Although groceries are mainly still bought in the supermarket itself, supermarkets are already strongly represented online. However, the customer does not think in terms of online and offline, so everything has to fit together in the retail trade. Something that is often forgotten. The same promotions and promotions must therefore be available both online and in the store.
Retail Media is an interesting form of advertising. These are advertisements from retailers and brands that place their advertisements directly on the respective (online) market places and stores. The most important pioneers in this area are Bol.com, About You, Zalando, Otto and Amazon. However, food retailing is becoming increasingly involved. More and more income is being generated from traffic and the reach of major retailers. Data is made available at a certain price to generate more revenue.
People are increasingly searching for products in the traditional search engines, and more directly on platforms. An advertiser on a marketplace benefits from the fact that there is already a major purchase intention among potential customers. Advertising increases the sales of products considerably. Especially large brand manufacturers are increasingly relying on exclusive partnerships with large online stores. Influencer marketing, branded content and exclusive products play an important role here. Welcome to the platform economy.
Do you need further support for your retail media strategy? We are glad to help you! Simply arrange a non-binding consultation and ask us your questions!
Need help with retail media?
Patrick is our Head of Retail Media. With many years of experience in selling on marketplaces, he advises you on marketing and content. He also supports you with the right marketplace setup to accelerate the growth of your business. Contact him by mail or by phone at+49 89 215 276 60.