June 7, 2024 by Kees de Jong
Principal Consultant : AdTech / Media / Retail Media / Talent
Introduction: As retailers and brands increasingly look to monetize their wealth of transactional and behavioural data, retail media presents an attractive yet complex opportunity. However, venturing into this domain is not without its challenges. With my experience consulting on retail media I’ve observed firsthand the pitfalls of underestimation and the rewards of strategic excellence.
Understanding the Terrain: Retail media isn’t just about leveraging data; it’s about transforming traditional retail operations into dynamic platforms that cater to both consumers and advertisers. Yet, many retailers and media personnel dive in without fully grasping the scope of what they don’t know. Retailers often misjudge the effort required to generate significant revenue and underestimate the impact on their existing business models. Conversely, media professionals can mistakenly treat retail media as they would any traditional media venture, ignoring the unique challenges it presents.
Common Misconceptions and Realities: The allure of retail media often leads to two critical misconceptions:
- Overestimated Revenue: Retailers might expect immediate, high returns without recognizing the required time and resources necessary to cultivate a viable media platform.
- Underestimated Business Impact: On the flip side, the potential disruptive impact on traditional revenue streams or operations could be overlooked, leading to strategic misalignments. For media personnel, equating retail media with conventional advertising ignores the specialized nature of retail data and consumer relationships.
Top Challenges in Retail Media Ventures: Navigating retail media successfully requires overcoming several key challenges:
- Understanding the Challenge: Fully grasping the depth and breadth of what a foray into retail media entails is crucial.
- Change Management: Effectively managing the coexistence of traditional retail models and “new” media platforms.
- Skill Acquisition: Accessing the right skills and expertise to execute a sophisticated retail media launch is often a hurdle for traditional retailers.
Strategic Advice and Execution: Without revealing confidential details, I’ve seen organizations transform their approach to retail media with the right guidance. The key lies in not just adopting new technologies but integrating them thoughtfully with clear strategic objectives. This integration requires detailed planning, addressing questions from what and how to sell (be it sponsored products, display ads, or programmatic solutions) to whom and with what budget (considering trade marketing vs. media budgets).
Future Outlook and Preparation: The landscape of retail media will continue to evolve, characterized by both innovation and error. Companies often falter by rushing into tech investments spurred by persuasive sales pitches without a thorough understanding of their actual needs. To avoid such costly mistakes, companies should adopt a horizon-focused strategy, anticipating future needs and potential industry shifts.
Why should you care? : Retail media offers a lucrative avenue for retailers to leverage their direct consumer relationships, but it demands more than a plug-and-play approach. It requires a deep understanding of both media dynamics and retail operations. As we navigate this complex terrain, specialist advice tailored to the unique needs of retail media becomes indispensable.
Invitation: If you’re exploring retail or commerce media, connecting for a detailed discussion can pave the way for informed decisions and strategic success.
Connect with me to continue this conversation and explore how your business can not only adapt but excel in the evolving world of retail media.
