Contemplating the creation of a retail media network? Initiate with your identity plan strategy.
Transformed Article:
In this modern age of media networks, retailers are widening their influence, diversifying their income sources, and amplifying their reach to novel and lucrative audiences. As per a recent eMarketer report, ad spending on the e-commerce channel surged by nearly 50% in 2020, and advertisers are expected to raise those allocations by an additional 27.8% this year. One out of every eight digital ad dollars will be spent on advertising on digital properties. Additionally, Boston Consulting Group predicts that "big retailers are in a sprint towards a $100 billion high-margin annual prize in retail media."
A significant factor fueling this growth is the high expectations customers hold for brand engagement, but many advertisers, such as brands and suppliers, struggle to establish robust first-party data connections to comprehensively understand their customers and cater to their needs. To establish the foundation of a media network, retailers might consider every way their customers could interact with their business, including point-of-sale, websites, customer service, billing, brick-and-mortar stores, and more. Once all first-party data sources have been identified, every retailer needs a robust identity strategy to connect all the touchpoints and construct a media network stronger than competitors.
A robust data strategy serves as a brand's competitive edge. Nevertheless, as part of the data strategy, retailers require control over their customer identity. An accurate and integrated identity layer applied across fragmented data sources creates a powerful differentiator. Merging multiple touchpoints into a single view of a customer lays the groundwork for collaborating with advertisers, executing campaigns on a retail media network, and measuring precise customer insights. Retailers considering solutions to build and manage their own customer identity usually focus on these three essential components:
- Record creation. Utilize interoperable solutions that harmonize with existing technology investments and create first-party identity as the foundation of the data infrastructure. First-party data resolution enables the creation of retailer-owned customer views.
- Record enrichment. Combine collaborative second-party data and superior third-party attributes to boost customer views and strengthen customer intelligence. To optimize enrichment, retailers will need a flexible, privacy-conscious technology to configure their graph and enhance it with second- and third-party insights.
- Translation. Leverage a strong identity framework, acting like a "Rosetta Stone" for a retailer's data, seamlessly translating from multiple identities into one consistent "language." The goal is consistent integration across an organization, a technology stack, multiple data sources, and any number of marketing activation and measurement partners. Translation should be quick, secure, and interoperable across all channels where the customer engagement takes place.
Once retailers have a solid identity strategy in place, they can significantly benefit and differentiate their media network by making it a profitable venture for advertisers in various ways, including:
- Retaining shopper marketing dollars Historically, shopper dollars have been spent on end caps or in-store marketing. With the rise of delivery and on-demand services, these methods become less valuable and effective. Retailers can maintain and expand shopper dollars by allocating spend to their online placements. Even better, by capitalizing on first-party data, both retailers and advertisers profit from delivering more accurate and relevant marketing to consumers. With a media network, retailers are poised to capitalize on the shift to digital.
- Engaging consumers where they shop Through placements on a retailer's website and owned and operated properties, brands can reach their buyers in a digital context. Not only does on-site advertising drive new site traffic, but retailers and brands can also engage existing customers at the optimal time-while they are shopping. Taking it a step further, by leveraging offsite audience extension, retailers can help brands effortlessly find and connect with new customers across the web, ultimately resulting in more brand-customer touchpoints and conversions.
- Driving product development By harnessing a data-driven and identity-based strategy, retailers and their brand partners gain a more profound understanding of changing consumer needs. Today's consumers expect personalized products that cater to their interests. As a result, retailers and brands can meet shopper preferences with better-informed research and development. Visionary partnerships will be able to iterate swiftly and reach interested markets with innovative offerings and products.
- Deepening advertiser relationships Retailers can disclose unparalleled consumer insights to enhance sales and strengthen brand relationships. Transactional data is a goldmine when smartly utilized. For example, brands can capitalize on closed-loop measurement to improve persona profile definition, audience targeting, and campaign optimization.
Retailers have a host of new tools at their disposal to boost profitability and achieve customer engagement that drives higher rates of loyalty and overall spend. With a focus on developing an identity framework and technical infrastructure that provides more control over the customer experience and better visibility into their actions and trends, retailers will develop a more formidable competitive edge.
- Amidst the surge in e-commerce ad spending, retailers have the potential to establish media networks, leveraging technology and AI to understand customers better and cater to their needs more effectively.
- A robust data strategy, including technologies for record creation, enrichment, and translation, is essential for retailers aiming to build their own customer identity and create a formidable media network.
- Engaging consumers where they shop is a significant advantage offered by retail media networks, allowing brands to reach buyers in a digital context and drive new site traffic.
- As retail media networks merge multiple touchpoints, retailers can collaborate with advertisers to conduct data-driven research and development, catering to shopper preferences with personalized products.
- Retailers can retain shopper marketing dollars and deepen advertiser relationships by capitalizing on first-party data, delivering more accurate and relevant marketing in various digital channels, including online placements, websites, and offsite audience extensions. These efforts can ultimately lead to more brand-customer touchpoints and conversions, bolstering the retailer's competitive edge in the modern age of business, finance, technology, and lifestyles.
