Retail media in Australia is accelerating in adoption and reach as more retailers and brands discover the opportunity for data-driven, timely promotional messages targeting shoppers at key points along their path to purchase.
The key reason for the strong growth is that consumers are responding to those messages, and the entire retail media ecosystem enables the measurement of responses, proving the power of the platform and its value compared with the traditional scattergun approaches of advertising and marketing.
A leader in Australia’s retail media landscape is an international company, Epsilon Retail Media, which counts the nation’s two largest grocery retail businesses among its long list of retail clients.
For those not yet in the know, a powerful retail media network leverages a retailer’s assets, particularly data, to create unique customer interactions and allow brands to reach the right customers with the right message at the right time. As Rob Odd, regional CEO of Epsilon, told Inside Retail recently, connecting various channels — on-site, off-site, and in-store — to a customer ID ensures consistent and contextually relevant communication throughout the entire purchase journey, no matter where the customer is.
Epsilon’s senior VP of sales operations, Jennifer Garner, and director of business development, Oliver Morton, now share some of the best practices retailers should follow to build out retail media platforms – and some of the pitfalls to avoid.
The clearest, most obvious benefit of implementing a retail media network is increased revenue – for the retailer and its brand partners, explains Morton. However, if those partners – along with customers – are not brought on board with equal focus and priority, the execution stands to fail.
“If you are just looking at the retailer’s goals in isolation to the brand’s goals and the customer’s goals, then you are not going to create a truly holistic retail media program.”
Understanding customers is at the heart of what Epsilon does, along with making sure that value is continually being delivered to retailers, brands and customers alike.
Partnerships are critical, Garner continues. “It’s more than being just a vendor, or just a retailer, or just a client. You have got to partner together to grow because each retailer is different, so if we were to adopt a cookie-cutter approach to every single retailer, we would not be able to deliver value to them.”
Garner says communication is essential to building strong relationships between the three core partners.
Epsilon’s team talks to retailers and brands to ensure they know the problems they are trying to solve, thus aiding the evolution of a shared solution.
How to get started
Retailers considering building out a retail media network need to adopt patience – and be very clear on what they want to achieve, advises Garner.
“When you are looking to kick off new initiatives or take something to the next level, be really clear and articulate on what the goal is, then start small and expand and iterate. Because if you try and boil that ocean or aim for perfection at the outset, you are not going to get going. You have got to start carefully, iterate, learn quickly, fail fast, and make changes that respond to your business needs.”
She and Morton advocate that retailers who get this right select around 40 top-performing brands across their retail channels to onboard first that are willing to try out new things and will unlock a lot of great case studies that retailers can show to other brands to prove the network is effective. Then focus first on a six to 12-month education program with active discussion over objectives, strategies and implementation. Epsilon’s platform allows retailers to manage it themselves – as Woolworths and Coles do – or have Epsilon manage it for them, so education is critical in those early months.
From a technical perspective, the implementation of a new retail media network offering usually takes eight to 12 weeks but can sometimes be set up significantly faster. A key component often overlooked is business onboarding – in other words, the go-to-market strategy or getting advertiser brands on board. The pair describe this as a crucial phase that cannot be rushed, as it is critical to explain to a brand why it should commit to your retail media network rather than a rival’s.
Garner says implementing a retail media network is not a silver bullet. “As a business, you have to invest time into it to make it successful. And then it will start to become a self-perpetuating revenue stream for you, where you don’t necessarily need to dedicate as much time to it.”
Tech costs are deterring retailers from retail media. They shouldn’t be
Recent research conducted for Epsilon revealed that 50 per cent of retailers believe that expanding their retail media network is challenging due to technology costs, staffing limitations and difficulties developing partnerships. Within that group, 75 per cent were concerned about the costs of the technology or supplier management, and 71 per cent about both developing or expanding their first-party data assets or the challenge of data security. Others faced staff resourcing limitations to scale technology and operations or a lack of resources to sell media space to brand partners.
Morton says retailers need not be deterred by such issues, all of which are easily addressed. He advocates starting out with a “simple yet significant offering” and then working on scaling that up bit by bit so as to demonstrate effectiveness and prove growth within one media channel before moving on to others.
“A phased approach will help. Pick your battles so as not to boil the ocean, and that will help keep your tech costs down. Choose a partner that can help you with staffing, so you’re not doing it alone.”
As retail media technology has advanced rapidly over the past several years, retailers are changing the way they engage with technology providers. Traditionally, retailers had to engage with a new supplier for every new channel or capability they wanted to introduce, which inevitably led to a very complex tech stack. “We are seeing a growing trend from retailers on how they can simplify this tech stack, which has several obvious advantages such as improved data fidelity, reduced costs, improved operational efficiencies, and reduced overall complexity,” said Garner.
Going for an experienced retail media supplier helps address staffing limitations as well. “Having a partner that is along for the ride to hold your hand and help you see success comes into play around self-service versus managed service. Having a managed service component that can work with you or your partners helps you grow without having to increase your staffing exponentially.”
Internal alignment pays dividends
Another critical factor in developing a successful retail media network is getting all the internal team members on board. Retail media’s roots date back to the merchandising fees brands would pay for their products to be displayed in premium positions in stores. That has tended to result in some retailers assigning the whole expanded concept to their merchandising teams.
Morton and Garner say it is vital that retailers get internal alignment across their category management, marketing, and e-commerce teams. “Creating and being a united front on this is going to drive value for you, and that creates brand trust as well,” he says.
“When I think about the most successful retailers that we’ve seen out there, there is a really strong alignment with category management,” adds Garner. “So the people who own those supplier relationships on a day-to-day level – whether that’s your merchandising in stores, or the activity that they’re doing across radio or print, the catalogue and retail media, whatever it might be – they have got to have a great alignment so that everyone understands the value being delivered.”
Retailers need to ensure all teams understand that retail media drives value and can deliver income and successful brand relationships for the retailer.
“Making sure that the people who are involved in it day-to-day are aligned and can see that value is paramount. So communication is always necessary in these scenarios.”
