In the US, Retail Media is an established offering and one of the fastest growing forms of online marketing. Germany, however, is still warming up to the idea. It’s the 6th largest ecommerce market, but accounts for only 1% of global Retail Media spend.
This enormous untapped potential sets the stage for a major Retail Media movement in 2020, with gains to be had on all sides, including retailers, brands, and the consumers they serve.
To help marketers capitalize on this opportunity, we surveyed German marketing decision makers about their attitudes toward Retail Media. A summary of what we learned follows. You can read the full State of Retail Media report here (available only in German).
Brands Know and Love Retail Media
Though the category is still new, almost half (48%) of survey respondents see great potential in Retail Media. Its ability to connect brands directly with shoppers at high intent moments and deliver measurable Return on Ad Spend (ROAS) was especially valued.
For marketers, campaigns that offer targeting, ad optimization, and measurability tick all the boxes. Retail Media campaigns meet all of those criteria, and then some. When asked about the advantages that Retail Media campaigns offer, respondents listed the following:
- Address an immediate purchase intent on a retailer’s site (61%)
- Get access to further information on my customers’ consumer behaviour (56%)
- Provide customers with info that feel more like a service than an ad (49%)
- Direct link and measurability of ROAS (44%)
- Strengthen relationships with retailers (41%)
Retailers and Brands Both Have Challenges to Solve
The advantages of the category are clear, but in order for Retail Media growth to turn the corner, both retailers and brands still have some work to do.
A key insight from our survey was that 30% believe that Retail Media is still in the test phase with German retailers. Brands also feel that retailers aren’t prioritizing the discipline and aren’t investing enough time and energy into developing interesting advertising solutions.
The fault isn’t entirely on retailers, however. Brands themselves admit to needing more guidance to run successful Retail Media campaigns. And 50% said that although they know of the concept, they don’t fully understand it.
The Future for Retail Media is Bright
Despite the nascent stage of the category in Germany and the challenges we mentioned above, brands are going all-in on Retail Media.
89% of the marketers we surveyed plan to invest in Retail Media in 2020, with over a third saying they will “invest a lot in retail media”. For the majority, a multi-platform strategy where they allocate budgets to several retailers is the most popular, so they can reach different audiences and compare different retailer performance.
Brands are actively looking for alternatives to Amazon and are eager to diversify their budgets. But for retailers who are worried about cannibalization, they can rest easy: respondents confirm that Retail Media and trade marketing will exist side-by-side, with investments in both continuing.
The icing on the cake? Retailers and brands don’t have do this alone. Criteo Retail Media helps retailers earn revenue from their inventory and unlock brand budgets with one, integrated platform. It also helps brands easily buy sponsored product and display ads across top retailers.
To learn more about the Retail Media opportunity in Germany and access additional insights from our survey, download the State of Retail Media report (available only in German).