As we close off 2022, in what was a pivotal year for retail media, here are some thoughts on where the industry is today and some things to look out for in 2023.

1. Retail Media has been around forever, is omni channel/omni media and growing strongly

• Although most of the retail media "noise" is a consequence of the recent explosion in online retail media, its worth reminding ourselves that retail media has existed ever since the first shops started to sell branded goods - well over 150 years ago. It is also "omni channel"- meaning instore, around the store, onsite, offsite - anywhere the retailer is able to connect or communicate with or broadcast to a customer or prospect.
• Lots of retail media is ambient - cardboard trolley ads, paper posters and shelf talkers/aisle fins. These are all effective media that can help acquire new customers and keep existing ones coming back.
• For most supermarkets, 90% of their sales are still made instore and the best way to influence shoppers is in the shop.
• Of course digital media and online will be the fastest growing channels as e-com grocery continues to grow share and we expect to see significant growth in "offsite media". Offsite media is whereby retailers and brands partner to reach existing and new customers via social media, as they browse the web and, increasingly, as they watch (connected) TV
• We also expect to see digital screens instore to play a much bigger role in helping customers get what they want quickly and easily, and for advertisers to help them as they do.

2. Winning retailers will be those who master the 5 key drivers of RMN success:

• Integrate retail media into their core commercial, marketing and e-com decision making strategies and processes
• Have the right inventory available in the right channels at the right price with good ways to enable brands and advertisers to buy it and measure it as frictionlessly as possible
• Create a retail media network that enables all their suppliers , media agencies and other 3rd party advertisers to participate and show ads in ways that are good for customers - making the instore or online shopping experience more relevant, personalised and value adding - and whose effectiveness is easy to measure
• Have the best retail media people and operating processes to manage the complexity of hundreds of advertisers chasing thousands of media slots to reach millions of customers in an infinite number of campaign combinations
• Support the above with simple to use, effective technology and actionable insights

3. Winning brands will be those who make the switch from ROAS to CLTV

• Customer centric retailers like Amazon, Tesco and Kroger have understood for decades that with the right loyalty/data tools and the appropriate operating philosophy they can manage their business by customer metrics as well as the traditional product/store metrics that are still how most retailers operate.
• These retailers understand that customers are acquired at a certain cost, shop differently to one another and each has a distinct value to the retailer as they pass through their respective life stages changing lifestyles and as competition fluctuates, with differing levels of loyalty.
• Brands, even the most sophisticated, do not operate in this way. They are by definition brand-centric and so they measure attitudes to the brand, brand performance- such as sales and share relative to other brands, and they measure media by its impact on the brand or the sales return on advertising spend.
• Retail media is more targetable and measurable than any other media channel, it enables a customer or shopper/consumer centric view of the world. Thus brand owners can start to calculate the differing costs of acquisition and retention and the shifting impact of media and other performance drivers on shopper/consumer loyalty.
• Those brands that master this approach will have a big advantage over those that don't.

4. Winning agencies will be those who best adapt to the "full funnel" opportunities enabled by retail media and especially connected TV

• Media agencies adapt to help clients plan and execute their media spend by geography, by media type and channel and by target audience and message type. In recent years "upper funnel" advertising (typically brand building messaging delivered via mass channels aimed at awareness) has been managed distinctly from "lower funnel" performance media aimed at triggering sales from customers who are in buying mode (typically digital ads especially Google of Facebook).
• Retail media is full funnel and we see the major holding companies recognising that they need to rearrange the remit and roles of their specialist agencies who are not adapted to the omni channel / full funnel opportunities of retail media
• Watch out for the emergence of "retail media planning and buying specialists" who embrace brand, performance and retail skillsets. Especially watch out for complacent supplier sales teams as these new entities will also come after your promo budgets.

5. Connected TV will be a game changer

• Connected TV companies like Netflix, Amazon Prime, ITV X and Disney Plus know who is watching, what they watched, what ads they saw, for how long, and at what frequency. They don't know who subsequently changed their shopping behaviour but big retailers with big loyalty programmes do.
• Retailers are increasingly joining their data sets to those of the TV companies in GDPR compliant ways using "clean rooms". This enables highly granular measurability of ad response and enables big savings in media optimisation. It also helps brand and retailer to acquire new customers and buy more media.

6. Winning tech companies will be those who offer insight led , omni channel planning and buying solutions at low friction

• We argue that the winning tech does not yet exist. There are very competent adtech solution providers like Criteo, Citrus and Promote IQ who think they might have a better algorithm to predict what ad to serve in response to a customer's search query or page on a website.
• But these tools do not help brands or retailers who want to buy or sell or plan instore, onsite or offsite campaigns either individually or in combination with each other. They don't offer much in the way of integrated analytics and how for example, instore ads play a greater or lesser role than onsite ads or a plain old 25% price drop.
• Some adtech tools can be difficult to use and require specialist users. The future is self serve, omni channel, insight led with low friction.

7. Winning people will be generalists not specialists

• Despite the massive advances in AI (including creating this post image), retail media continues to need good people.
• The winners will be generalists rather than specialists and so we would encourage those looking to build a career in retail media to build omni channel skills (understand how physical shops work as well as e-com sites, understand algorithms as well as sales basics, understand the process of fixing a piece of cardboard on to a trolley as well as serving a relevant ad when a shopper searches for "shampoo"). Understand the differing requirements of shopper, brand and agency ad buyers and the differing technologies required to help them make their choices.
• Above all understand why and how certain customers respond to certain ad messages at certain times and in certain ways and others don't. To do this well will require curiosity, data skills, tech skills, good old fashioned brain power, and people skills to explain it to business owners. Those who can do all of this well will be in high demand.
• And if you want a career in retail media and are feeling restless in your current role, drop us a note as we have a growing number of vacancies for consultants, business leaders, proposition owners, sales and client people that we need to fill ourselves and on behalf of our retailer clients.

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