The retail sector is under constant change, buffeted by challenger direct-to-consumer (DTC) brands, economic uncertainty, and shifts in consumer behaviour.
However, as Graeme Finneberg, country manager, UK, mediarithmics, outlines here, one thing is for sure: staying as you are and hoping for the best is not an option for any retailer that wants to ensure a long-term future.
It’s essential to be agile and constantly review existing strategies like price, location, marketing, product range, etc. to ensure they reflect the needs of today’s consumer. As part of this, it’s important for retailers to understand the worth of all the assets they own and how to make the most value from them. Yet many are unaware that one of their assets, their data, actually has the potential to be a totally new revenue stream. And perhaps it’s time to develop a whole new media strategy – where they are the media brand themselves.
To give you a hypothetical example, Sony could provide its CRM data to Curry’s to match to its own data. Curry’s would then be able to identify which of Sony’s customers are looking on its website for Sony products – or, indeed, for Panasonic products. In this way, Curry’s could provide unique insights into Sony’s customers, and send them hyper-relevant, personalised retargeting or email campaigns from Sony. They would do this by holding Sony’s creative assets and managing campaigns as a full-service offering.
We are already helping several retailers to set up the appropriate technology they need to do this and become the media brands of the future. They are confident in making the investment as they understand the huge value their data offers their suppliers and partners and, therefore, the big return it will create for them. Interestingly, we are also talking about this with DTC brands that are resellers of other brands as, while they tend to not have the scale that makes retailers so ripe for this opportunity, they often have a strong niche market. This can be appealing to relevant advertisers looking for new ways of reaching specific audiences, such as cyclists or pet owners.
What is making this a very real option today is the sophistication of the new generation of universal data marketing platforms, which can house all the data and pipe out the campaigns in real time.
However, it will take a big shift in mind set, as well as great tech, before more retailers take the plunge and embrace their new media role. In some ways, it’s not such a massive change as, after all, they are still doing what they do best – selling things. It’s just that the product is their data. Perhaps another way for retailers to view this new opportunity is as trade marketing on steroids! Whereas once suppliers used to pay for aisle endcaps, now they can pay for inventory. We call it ‘e-commerce 2.0’.
To set up their own media shops, retailers will need to invest not only in technology but also hire around three members staff to run the business initially – one to run the tech/campaigns; one to understand the data; and one to sell the campaigns. Hence there are set up costs, but the draw of the data for advertisers should mean reaping rewards fairly quickly.
This has massive potential for retailers, but it also gives advertisers an exciting new source of digital ad inventory with additional benefits like measurement and attribution – things that are often lacking in trade marketing; plus, all parties have the potential to forge stronger, more informed relationships. It truly is a win/win situation.