The rapid growth of retail media in the U.S., expedited by the pandemic and boosted by social commerce, is set to bring new opportunities for brands.
However, to keep up with the pace, marketers will require new capabilities, team structures and skillsets, finds WARC.
Gregory Grudzinski, Head of Content at WARC Digital Commerce, commented, “Forrester Research reports that retailers and marketplaces in the U.S. are expected to sell $41 billion in retail advertising in 2022, a number that is expected to more than double in the next four years, reaching $80 billion by 2026.”
But, Grudzinksi said, this rapid growth is outpacing the ability of all but the biggest brands to keep up. “While brands welcome the powerful targeting capabilities and the use of retailer shopper data, there are challenges to overcome in adapting and navigating a complex landscape of fragmentation and new media capabilities to win the digital shelf.”
Grudzinski is the author of WARC’s “Spotlight US: Solving the puzzle of retail media.”
He outlines some key predictions, as follows:
- Broad-based reorganization of retailer and brand teams
The teams in place today are inventing new ways of going to market. As most start-ups discover, the talent needed to write the playbook is not necessarily the same talent needed to implement and optimize operations.
- Standardization of the metrics will be retailer-driven
The best way for retailers to effectively differentiate their offering from competitors is to show performance differences in standardized metrics – not unlike what broadcast media did in its nascent stages.
- Digital will level the playing field for brands big and small
Harnessing the complexity of retail media and digital marketing requires the mastery of dozens of variables. While the big brands have the retail relationships and financial resources, the smaller ones have focus and the agility that allows a fast-follower to build a winning brand.
- Media agencies and consultancies will flourish
As brands seek the knowledge and expertise to win in the rapidly evolving digital commerce space – particularly in the area of analytics and operations – they will increasingly rely on the experience of outside parties for the knowledge and experience their teams lack.
Predictions: Where it goes from here
Gartner predicts retail media will not be widely implemented and well understood for at least five to 10 years — a time frame Grudzinski presumes accounts for a significant amount of evolutions and mutations to occur.
“Over that time, I expect we’ll see great progress along a number of fronts.”
His top picks are:
Broad-based re-orgs of retailer and brand teams. The teams in place today are inventing new ways of going to market. As most start-ups discover, the talent you need to write the playbook is not necessarily the same talent you need to implement and optimize operations.
Standardization of the metrics will be retailer-driven. The best way for retailers to effectively differentiate their offering from competitors will be to show performance differences in standardized metrics – not unlike what broadcast media did in its nascent stages.
Digital will level the playing field for brands big and small. Harnessing the complexity of retail media and digital marketing requires the mastery of dozens of variables. While the big brands have the retail relationships and financial resources, the smaller ones have focus and the agility that allows a fast-follower to build a winning brand.
Media agencies and consultancies will flourish. As brands seek the knowledge and expertise to win in the rapidly evolving digital commerce space – particularly in the area of analytics and operations – they will increasingly rely on the experience of outside parties for the knowledge and experience their teams lack.
