With the rise of online shopping, brands are seeking innovative strategies to captivate the attention of consumers navigating the digital marketplace. Enter Retail Media Networks – the driving force behind modern retail promotions. These networks are the go-to tools for retailers and brands looking to connect with customers, boost retention rates, and more.

What is a retail media network?

A retail media network is an advertising infrastructure that allows brands/vendors to purchase space on various online channels (e.g., website, mobile app) to reach their target audience. 

RMNs can either be owned by the retailer itself or managed by a third-party service.

In order for a retailer to build their own RMN, they have to have the budget, resources, and data. Because of these restraints, only big-box retailers are investing in this space like Target, Home Depot, Kroger, and Costco. 

Smaller, mid-market retailers, on the other hand, are relying on third-party services to manage all discussions and purchasing decisions with vendors.

Key benefits of retail media networks for retailers

First-party data utilization:

• • Retailers understand the value of the data they collect from customer transactions. Loyalty programs and other initiatives are providing rich insights into consumer behavior. 

• • This data-driven approach enhances targeted advertising and therefore offers a reliable alternative to traditional data sources.

Diversified revenue streams:

• • Retailers are exploring new income sources to adapt to changing retail trends. With online sales growing, many are turning their platforms into advertising spaces to boost revenue.

• • This shift helps them stay competitive amidst rising costs and pricing pressures.

Direct control and collaboration:

• • Retailers are taking control of their advertising spaces through Retail Media Networks (RMNs). This allows direct collaboration with brands looking to advertise on their platforms.

• • Close collaboration ensures that advertising strategies align with business goals, delivering a seamless experience for consumers.

Improved inventory management: 

• • Track buying patterns to manage inventory effectively, Retail Media Networks enable retailers to track and anticipate inventory demand by identifying consumers’ buying patterns.

• • Retailers can adjust marketing tactics using these networks, promoting specific overstocked items through targeted promotions.
    
    

Top Retail Media Networks

Walmart

Walmart Connect integrates online and in-store activity to provide a comprehensive view of customer behavior. It’s the second-largest Retail Media Network in the U.S., generating $2.7 billion in ad revenue in 2022. It continues to expand across Walmart’s digital properties (Walmart.com, Online Pickup and Delivery, and the Walmart App).

Target

Since its rebranding, Roundel has grown to include nearly 1000 partners and 150 premium publishers and channels. This internal retail media agency offers first-party data on over 165 million shoppers, enabling brands to create personalized advertising campaigns. Roundel contributed to Target’s growth by generating over $1 billion in ad revenue in 2022.

Kroger & Albertsons

The proposed merger between Kroger and Albertsons would create an entity accounting for 15.6% of U.S. grocery spending. Combining their first-party data would create one of the largest in-store media channels globally. Kroger already excels in media networks with Kroger Precision Marketing, which generated $1.2 billion in operating profit in 2022.

Wayfair

Wayfair is a leading online-only home goods retailer known for its innovative business model and Wayfair Media Solutions, its retail media network. It offers an in-house sponsored products platform for advertisers to promote their products. With hundreds of millions of page views monthly and 22 million active customers, Wayfair’s RMN is a top choice for relevant product offerings.

Ulta

Ulta Beauty’s retail media network, UB Media, leverages first-party data from its 37 million members. This reinforces its ability to engage guests at the right time and place. VP Brent Rosso highlights Ulta’s expertise in the beauty industry and its audience. Ulta’s “Digital Marketing Partner Program” and “Ultamate Rewards” data drive a winning digital strategy for brand partners, offering personalized shopping experiences and measurable returns.

GoPuff

In 2022, GoPuff introduced off-site capabilities with Citrus Ad, pioneering the first instant ad platform. Fueled by first-party purchase and future intent data, GoPuff Ads achieved a remarkable 430% ROI for brand partners. Daniel Folkman, GoPuff’s SVP of Business, attributes this success to their partnership with Citrus Ad and their innovative approach to off-site, on-site, and open web displays.

Amazon

Amazon Ads, established in 2012, has become a dominant force in the retail media advertising market. As a pioneer, Amazon revolutionizes the sector by offering on-site and off-site upper-funnel ads, including video ads through Amazon DSP (Delivery Service Partner).

Optimizing retail media networks: coordinating campaigns with AI-driven promotions

Retail Media Networks (RMNs) provide retailers with a powerful tool to manage promotions effectively, leveraging first-party data, targeted advertising, and enhanced ad visibility to drive sales and achieve success in marketing efforts. However, to fully capitalize on the potential of RMNs, retailers must integrate the data generated from these platforms with an AI-powered promotion management system. This integration harnesses the power of AI and analytics to revolutionize the planning, execution, and analysis of promotions across diverse channels. By seamlessly integrating promotions with RMNs, retailers can maximize impact and efficiency, ensuring a cohesive approach to marketing strategies.