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Retail media and data monetization is a hot topic right now, with many discussing how retailers need to move fast to capitalize on this opportunity. Retailers using their own customer data to generate additional revenue streams, beyond the sales of their products, is nothing new—but it is rapidly growing.
That’s why we’re discussing everything you need to know about maximizing your company’s alternative revenue.
Why the rush?
Retailers ranging from digital marketplaces and mass-merchandise retailers to category-focused retailers and intermediaries/delivery companies are all rushing to launch retail media networks. Retail media is set to become the fourth largest advertising medium, with ad spend growing by 10.1% to reach $121.9 billion globally this year.
This explosion has been driven by three main causes. The first cause is e-commerce growth, especially in grocery and other consumer packaged goods (CPG) retail sectors. Secondly, big tech privacy and data changes have increased the value of retailer 1st party data. And third, improvements in technology have helped retailers better collect and act on shopper data.
To tap into the data monetization opportunity, leading retailers such as Walmart, Kroger, and Target are building integrated data and media solutions. When executed well, retailers can generate 0.1-1.0% of total sales in alternative revenue from media and shopper insights—that’s an additional $1-10 million for every $1 billion in revenue!
Tips for Success
In order to effectively maximize your alternative revenue, we have a few tips:
- Prioritize the customer experience (personalization is key)
- Make it easy for CPGs to use
- Choose the right partners
Prioritize the customer experience
With many consumers concerned about customer privacy and data security, it’s important for retailers to keep the customer experience, not data monetization, top of mind when 1st party data. Gone are the days of generic search ads and impersonal marketing emails—shoppers want to feel like retailers see them as individuals, not just dollar signs.
One of the most powerful ways retailers can create an amazing customer experience is through personalization. Although retailers might think they excel in marketing personalization, customers beg to differ. According to McKinsey, 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when this doesn’t happen.
Retailers can also prioritize the customer experience by engaging shoppers in new and interesting ways. Livestream shopping has emerged on social media platforms, kiosks are popping up in stores to provide samples, and retailers are offering mobile in-store and post-purchase deals.
Make it easy for CPGs to use
When launching or running a retail media network, retailers should make it easy for CPGs to invest in advertising on their platforms. They can do this by implementing the following strategies:
- Provide reasonable cost per impressions (CPMs) and high return on ad spend (ROAS)
- Streamline the ad buying process so it’s easy for CPGs to create, purchase, and manage their advertising campaigns
- Share unique data insights to help them optimize their campaigns and overall performance
Retail media networks should be a win-win for both retailers and CPGs. When retailers make it easy for CPGs to invest in advertising on their platforms, CPGs can reach their sales and marketing goals and both parties can drive increased revenue.
Choose the right partners
Retailers can accelerate the growth of their retail media networks by finding the right partners. Below are a few different types that retailers should consider:
- Syndicated Data: These companies provide syndicated data, an aggregated collection of product retail sales activity across a chosen set of parameters. This is data collected from the market and not intended for a specific client and can provide valuable context to analyze business data against the broader market.
- 1P Media/Marketing: From digital in-store options and loyalty programs to mobile marketing and video/live streaming, there are numerous companies enriching the customer experience by providing different ways to engage with consumers.
- Retail Intelligence Platforms: These platforms help retailers improve revenue and operations by delivering insights and advanced analytics on competitive intelligence, market analysis, brand protection, and pricing optimization.
- Enhanced Data: From providing SKU-level data to enhance customer engagement to using AI to improve retail shelf facings, there are many companies who can enhance your data to unlock new capabilities and opportunities.
Maximize Your Alternative Revenue with Boostr
Boostr is the only platform that seamlessly supports sales, ad operations, and finance
workflows to solve the unique challenges of media advertising. With Boostr, companies gain the unified visibility necessary to effectively manage, maximize, and scale omnichannel ad revenue profitability with user-friendly workflows, actionable insights, and accurate forecasting.
See how our platform supports the retail industry. To schedule a free consultation, contact us for a demo today.