Marketing channels and ways to advertise to shoppers continue to evolve.
These are driven by ongoing innovation but also by new macro trends like unprecedented eCommerce growth during COVID, digital growth in areas like gaming and social commerce, as well as consumer privacy concerns (now restricting 3rd party data collection).
One evolving channel is Retail Media Networks (RMNs) where Retailers are offering marketing and advertising options to their manufacturer vendor partners.
McKinsey’s article on - The rise of commerce media: The opportunity for CPGs, Feb 2022 provides good learning on trends leading to RMN growth, and what manufacturers should consider when investing in RMNs.
Source: McKinsey - The rise of commerce media: The opportunity for CPGs, Feb 2022
Important to note, RMNs are NOT just for CPG! Many other industries are also planning higher investments with their Retail partners:
Source: McKinsey - Busted! Five myths about retail media, Jun'22
A key benefit of RMNs if leveraged well, are providing brands opportunities to gain meaningful engagement with shoppers throughout their purchase journey — both upper funnel (e.g., exposing their innovation) and lower funnel (e.g., promotions, driving conversion).
McKinsey's Jun'22 report on "Busted! Five myths about retail media" provides data showing RMN's are not just for stronger shopper marketing or lower funnel outcomes, but manufacturers are leaning into them for Brand building too.
Source: McKinsey - Busted! Five myths about retail media, Jun'22
RMNs can enable good return on advertising spend (ROAS) if planned and executed well. Some areas manufacturers need to work through include:
Careful selection of which retail platform and partners best align to their brands and goals
Stronger targeting by leveraging both Retailers very rich shopper data as well as 1st party consumer data manufacturers are developing.
Setting up integrated joint-business plans (JBPs) with their omnichannel retail customers to align on strategy and tactics and ensure win-win outcomes in short to longer-term
When executing campaigns, don’t just “set it and forget it”, but partner closely for in-flight monitoring and adjustments
McKinsey’s Feb’22 article provides ways “CPG advertisers can take four actions to maximize marketing impact on retail media networks”. (Read their report for details)
Through effective manufacturer & retailer partnering they note opportunities for improving:
§ “Growth and efficiency
§ Audience discovery and insights
§ Product and assortment strategy
§ Access to placements
§ Attribution & measurement”
Marketers need to review the broader suite of new advertising channels to find the best fit for their brand and budget. RMNs can certainly be one.