In an age of continual digital marketing transformation, one innovative channel has caught the eye of product brands worldwide: Retail Media Networks (RMNs).
Situated at the crossroads of technology, consumer behavior, and insightful shopping data, RMNs are redefining the advertising landscape, turning retailers’ websites into potent platforms for targeted marketing. This revolution in the marketing arena is reshaping the interplay between brands, retailers, and consumers, with profound implications for the future of advertising and commerce.
Recent data supports this sea change. According to a recent McKinsey report, up to 39% of online consumers globally have made a purchase in the past year as a direct result of a Retail Media ad on a retailer’s website, a staple feature of RMNs. This figure, paired with the knowledge that consumers are 2.5 times more likely to add an item to their cart after seeing it in an RMN ad, underscores the substantial influence and reach of this new powerful marketing channel.
Furthermore, RMNs are increasingly becoming the destination for advertising dollars, with over 56% of consumer-packaged goods (CPG) companies planning to shift money away from traditional advertising channels and towards Retail Media in the coming years. This shift is not limited to CPGs: approximately 50% of non-CPG advertisers also plan to increase their investments in Retail Media.
This paradigm shift opens up a world of possibilities for more engaging and interactive ad formats, moving beyond traditional static displays and search listings. One standout innovation in this sphere is video commerce. Providing brands with an immersive platform to narrate their stories and connect with customers, video commerce enriches the RMN landscape, transforming shopping into a dynamic, engaging experience.
Q&A with Firework’s Caceres on Retail Media Networks
Today, we’re privileged to talk with Renee Caceres, VP of U.S. Retail Media at Firework, a leader in this transformative advertising landscape.
In our detailed discussion, we will cover the emergence of RMNs, their influence on the marketing sector, and the role Firework assumes in partnership with specialty grocery retailer, The Fresh Market.
What are Retail Media Networks (RMN), and explain their significance in the current marketing landscape?
Certainly. Retail Media Networks essentially represent a new frontier in advertising channels that enable brands to directly tap into a retailer’s ecosystem and reach consumers while they shop online. This interaction leverages the retailer’s unique and rich pool of shopper data, allowing brands to construct more precise and effective advertising strategies.
Their relevance in today’s advertising landscape stems from the strategic position retailers occupy in the marketing mix. With RMNs, we’re essentially transporting the in-store ad experience to the online realm, fostering a direct, one-on-one dialogue between brands and customers. This personalized approach gives customers the freedom and convenience to shop whenever and wherever they choose, transforming how brands and retailers interact and ushering in a new era of retailing.
How do RMNs offer unique advantages to brands compared to traditional advertising channels?
Retailers are at the heart of the conversion process, offering brands an invaluable opportunity to engage with shoppers when they’re ready to make a purchase. Thus, one of the major advantages of RMNs is the ability to create a direct, measurable connection with customers right at the moment of conversion. This essentially allows brands to have a dialogue with shoppers exactly when they’re most ready to convert.
In addition, RMNs offer the ability for brands to tie their advertising spend back to sales effectively. This is possible by utilizing closed-loop attribution and first-party data that RMNs offer. This clear demonstration of return on investment (ROI) is of utmost importance for brands operating in today’s competitive market landscape, and RMNs provide a crucial platform for achieving this.
For consumers, the advantages are equally compelling. Personalized advertisements based on shopper behavior and preferences can greatly enhance the online shopping experience. It’s like having a personal shopper who understands your taste, recommends products you’ll love, and even highlights special deals tailored just for you. Ultimately, it creates a more engaging, personalized shopping journey, driving better engagement and potentially increasing customer loyalty in the long run.
Why are we seeing a surge in ad spending on Retail Media Networks?
The dramatic rise in ad spending on Retail Media Networks (RMNs) can be attributed to a single, pivotal factor – the tangible, measurable results that RMNs provide. In today’s competitive advertising landscape, brands seek concrete proof that their investments drive sales. RMNs offer this proof through closed-loop attribution and first-party data, demonstrating a clear ROI in a way that other platforms can’t match.
As our society increasingly embraces digital shopping, consumers’ focus has shifted to online platforms. This digital migration provides an incredible opportunity for brands to connect with their customers at the very point of purchase. RMNs uniquely offer this opportunity, presenting an efficient and highly targeted way to reach customers. Consequently, we’re witnessing an upsurge in ad budgets allocated towards RMNs, significantly reshaping the advertising landscape.
Peering into the future, as online shopping continues to proliferate and data privacy regulations tighten, we anticipate RMNs to persistently grow and develop as a crucial channel for brands. Retailers’ access to first-party data, the information gathered directly from their customers, is becoming increasingly invaluable in this landscape. It facilitates highly targeted advertising that respects consumer privacy while delivering potent results.
For brands, it is essential to embrace this change, adapt, and innovate to leverage these emerging opportunities. They need to comprehend the potential of RMNs fully and align themselves with partners like Firework, who can help them tap into this potential. This involves exploring new formats like video to craft more engaging and immersive shopping experiences for their customers. In essence, brands need to be prepared to ride the wave of this digital revolution, ensuring their advertising strategies are attuned to the evolving dynamics of the market.
What is the next stage of evolution for Retail Media?
Up until now, Retail Media has largely revolved around Sponsored Product listings that blend seamlessly into the search results on retailer websites. These have been highly effective in driving traffic and sales. However, the future of RMNs promises to go beyond this, incorporating more varied ad formats that make the most of this unique online real estate to boost purchases.
One significant leap in this direction is incorporating video commerce into RMNs. Video commerce uses video content to promote, sell, and support commercial products or services. As detailed in Firework’s comprehensive video commerce guide, it allows brands to present their products in a more dynamic and engaging way, combining the power of visual storytelling with the convenience of online shopping.
For RMNs, video commerce could be a real game-changer. Unlike static product listings or display ads, video lets brands showcase their products in action, offering consumers a more immersive and interactive shopping experience. Consumers can see the product from multiple angles, understand how it works, and imagine how it could fit into their lives. This, in turn, can drive stronger engagement and higher conversion rates, significantly enhancing the ROI of RMN advertising. Video can be most effective when used at every stop along the customer journey, helping consumers become aware of products that meet their needs, better understand those products in the consideration phase, and then drive purchases at the bottom of the funnel through innovative video promotions.
How is Firework enhancing the value of RMNs?
Firework’s groundbreaking approach to introducing video to Retail Media Networks (RMNs) redefines how brands connect with their customers within a retail ecosystem. We leverage the power of video to push the boundaries of what’s currently possible within RMNs, reshaping this digital landscape to become more immersive, engaging, and highly persuasive.
Video as a medium provides brands with the ability to vividly convey their story, highlighting unique attributes and benefits of their products while forming deeper emotional connections with their customers. These elements all contribute to significantly higher engagement and conversion rates, underlining the potential power of video within RMNs.
Our work with The Fresh Market exemplifies this pioneering approach. Together, we launched the U.S.’s first-ever Shoppable Video-Live Commerce (SVLC) retail media network, which had a profound impact on customer engagement and conversion rates. Since bringing brands into our Livestream Events, we’ve seen 70x higher watch time, and 17X engagement vs competitive social channels. We’ve also seen a +35% average conversion rate vs the site’s average. This has led to over 120M views of video content, and over 800 days of watch time with an average of 6-7 minutes spent per event!
However, it’s important to note that Firework’s approach to incorporating video into RMNs isn’t just about leveraging technology. It’s equally about refining and enhancing the approach to customer engagement. We’re committed to helping brands harness the power of video to create ‘shoppertainment’ – a unique blend of shopping and entertainment. This innovative strategy helps brands not only engage and convert customers more effectively but also build stronger, longer-lasting relationships with them.
At Firework, we firmly believe that the future of RMNs lies in this integrated, immersive experience, and we’re continually exploring ways to make that future a reality. Learn more and reach out today.