What is Retail Media?

What, exactly, is retail media? And why is it trending right now? Learn three reasons why retail media is on the rise.

With more consumers purchasing online than ever, retail media is experiencing the same acceleration in its momentum. But what, exactly, is retail media? And why is it trending right now?

What is retail media?

Generally speaking, retail media is advertising within retailer sites and apps – usually by brands that directly sell products with retailers, though this is not always the case. Retail media advertising can also come from non-endemic brands in verticals such as financial services or travel—ones that are interested in retailer audiences but don’t necessarily sell products on those retailers’ sites and apps.

Retail media enables brands to boost their visibility on the “digital shelf”, similar to an endcap or special in-aisle feature in a physical store, in order to influence the customer at the point of purchase.

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What do retail media ads look like and where do they appear?

Retail media ads can be native ads or display ads. The native ads blend in seamlessly with the search results—they look like another product in the list—but have a small “sponsored” label at the bottom or top of the ad. The display ads allow for more impactful creative, blending branding messaging with dynamic, retail-specific features like real-time pricing.

Retail advertising can be shown on the home page, category page, search results page, or product detail page to reach consumers at various stages of their journey. Some retail media solutions also enable brands to retarget retailers’ audiences as they browse the open web, referred to as offsite retail media.

Here’s an example of a native sponsored products ad in the search results:

Here’s an example of a retail media display ad:

Why is retail media advertising hot right now?

Retail media was already trending for three reasons:

1. Ecommerce is a retail media driver.

Consumers are shifting their purchases from physical stores to ecommerce in increasing numbers. Brands want to make sure they’re where the action is, and reaching high-intent shoppers at the point of sale on the sites and apps of their retail partners.

2. Post-cookies, the need for personalized advertising continues.

For personalized advertising to carry on once third-party cookies are deprecated, advertisers need to rely on first-party data. Retailers have a wealth of this kind of data, including web and app searches, clicks, and transactions. Retailers know who’s browsing and buying which products, when, how often, and across which devices. They also have offline/in-store data that can provide an even richer view of consumers.

3. Retail media ties media spend to sales.

The attribution capabilities of retail media are extremely attractive to brands who are increasingly looking to connect their ad spend directly to sales. Retailers have an abundance of sales data and can provide sales-based insights, enabling brands to link their spend to ecommerce sales down to the individual SKU level. Some retailers are even providing offline sales data, for a more complete view of the customer journey.

Why shift to online retail advertising?

Advertisers are under more pressure than ever to prove the impact of their efforts on the bottom line. At the same time, privacy and industry changes are making it more difficult to effectively engage audiences. Retail media is a strategy that enables them to reach privacy-safe, high-intent audiences today and when third-party cookies are no more. It also provides closed-loop measurement, making it easy for advertisers to tie ad spend to actual sales.

Ready for more on retail media?

To dive deeper into retail media, read our Ultimate Guide to Retail Media. To get started with your own retail media campaign, explore our Commerce Max solution.

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