Retail Media Networks Are About A Lot More Than Just Eyeballs
May 21, 2024 by Dave Haynes
If the digital signage industry was a highway, its roadside would be littered with the carcasses of companies that put their self-funded screens and media players in retail environments – trying and, in most cases, failing to make a viable business from selling advertising.
Many years on, that operating model remains flawed, but the recent rise of interest and activity in Retail Media Network (RMNs) is showing, in real world terms, how digital signage screens in retail can have positive bottom line impacts for retailers and brands, and improve the in-store experience for consumers.
In-store media networks used to involve technology put in by third-party operators with the premise that the retailer’s shoppers represented large, attractive audiences that brands wanted to reach – whether or not they actually sold goods in those stores. It was all about the number and quality of eyeballs.
Retailers got a percentage of the screen time to use for their own messaging, and also a percentage of the advertising revenue. But revenue numbers rarely met the projections and promise, and retailers also wondered why they were allowing screens in their stores for what they’d call non-endemic products and services – like automobiles and cell phone plans. Shouldn’t those screens be marketing what’s on shelves?
Red-Hot RMNs
Many things have changed through the years, and driven by numerous factors, retail media is now a red-hot topic for store operators of all descriptions. The big mass merchandisers like Walmart have RMNs, but so do niche operators like Saks Fifth Avenue. It’s not really retail, but even the company behind Chuck E Cheese kids-themed restaurants and playgrounds have an RMN!
So what’s different?
First, technology hardware costs have plummeted, and manufacturing advances have meant displays can be schemed into retail environments without sacrificing critical merchandising and stock space. Instead of replacing a shelf with a big display, retailers can use smaller displays that fit in aisles or even line the front of shelves, shaped like strips of digital ribbon.
Second, software advances like cloud and data management, and now AI, make it much easier to manage and optimize in-store networks, and make screens part of broader omnichannel efforts that include online and mobile.
Third, analytics technologies can provide retailers with a rich understanding of how their stores operate and how they’re shopped by consumers. The same kinds of audience measurement tools and reporting that are demanded by brands for other forms of advertising are now readily available for retail.
Four, the same sort of programmatic targeting platforms used by media companies for digital screens in public spaces – everything from airport concourses to gas pumps – are now being integrated and made available to RMNs.
And finally, in-store media can be tracked and measured against sales performance. RMNs can provide advertisers with detailed data on how shoppers responded to messaging and the impact on sales. Tracking the success of marketing campaigns using more conventional media, like television and out of home, is much more elusive because the ads are “broadcasted” and the linkage to sales difficult to determine and measure.
Being Practical And Tactical
So the right pieces are in place, but that doesn’t mean putting screens in stores is now a can’t miss, slam dunk tactic. Screens can create awareness, but there’s also a big benefit to screens that have practical or tactical purposes.
This typically takes the form of educating, informing, or entertaining shoppers. When combined with functions like checkout line management, loyalty program recruitment, wayfinding or messaging targeted to the so-called back of the house (such as staff break rooms), they can do much more than urge shoppers to buy.
In-store screens are just one component of the larger idea of RMNs that also encompass online and mobile apps.
U.S. in-store retail media spend this year is forecasted to equal $370 million, which equates to 0.6% of the roughly $60 billion total retail media spend. The big money still goes to mobile and online, with search getting 62% of the spend and the rest going to display advertising.
Big Growth Expected
So it is still early days for the in-store screens side of RMNs, but most observers expect big growth. What’s already clear, though, is that in-store screens, done well, should be part of a larger retail efforts to drive experience.
Finding management software to schedule ads to screens is easy. What’s harder, and arguably smarter, is finding technology partners (like Sixteen:Nine publishers Spectrio) set up to drive, manage and measure a full in-store experience.
Online shopping and home delivery make bricks-and-mortar store visits, in many scenarios, an option as opposed to a necessity. To get people in and keep them coming back, retailers are looking to drive experiences, and then understand responses.
They’re also looking to limit their technology suppliers to streamline both their admin demands and operating workflows, so suppliers that can offer multiple integrated tools that all drive experience are valuable.
The original screen networks for retail were all about trying to reach people, and hopefully influence buying behaviors. Today’s much more sophisticated iterations offer that reach, but can do much more – using the rich, proprietary data that retailers collect to then generate and present highly personalized, effective messaging on screens at the most optimal retail moment … when consumers are in stores and deciding what to buy.
A very good revisitation of this perennial issue. Boy, do we get calls! There have been changes in infrastructure costs, remote management and programmatic ad placement… but the primary issue is the execution. I have always advised these entrepreneurs to get advertisers to commit, then deploy your capital. Still not easy, but if you find you can’t sell the ad space… there is your answer.