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Retail media best practice: the five things that every brand needs to know

Retail media is flying. But with the scale and breadth the medium offers, what does good look like? Here, Tesco Media powered by dunnhumby illustrates best practice and how to work across the funnel to achieve optimum success.

Retail media industry is on the verge of a milestone—and a major one at that.

In 2028, according to data from the IAB Europe, spending on retail media will reach 31€ billion. That’s an impressive enough figure on its own, but bear in mind these two things:

• Retail media advertising in Europe grew by 22% in 2023 compared to total ad market growth of 6%
• 52% of buyers are shifting budgets from Linear TV to retail media

Whichever way you cut it, retail media is flying.

However, retail media’s success isn’t just defined by the amount of money that brands are pouring into it. It’s also about diversity, and the fact that a growing number of people from a variety of different marketing backgrounds are now beginning to engage with the medium.

 

Defining best practice

This opening up of retail media is incredibly exciting to see – but it creates challenges, too. After all, with different disciplines come different skillsets, different priorities and different definitions of success. Combine that with the scale and breadth that retail media offers, and it can be difficult to know what best practice really looks like. What looks good to a performance marketer might look very different to what looks good to a brand marketer, for example.

So, what does best practice look like?

Tesco has been deeply involved in the retail media ecosystem for decades and is still at the forefront of innovation in the discipline today. That experience has helped to identify five key things that marketers need to bear in mind – from the way they view retail media to the way they measure it. Let’s take a look at each.

1. Retail media is a full-funnel activity, and treating it as such is crucial
   As retail media continues to evolve, it now offers customers the best of both worlds – performance and brand-building opportunities that run across the entire funnel. Retail media is exceptional at driving sales, but it can be equally effective at the upper end of the funnel, too.
   
   The key here is understanding which channels are most effective for which needs. At Tesco Media, there are a variety of channels available across digital and in-store. It’s a truly ‘sofa to store’ offering – one that gives brands the ability to reach customers at every stage of the shopping journey.
   
   Tapping into channels that help build brands and drive awareness and consideration also helps improve performance at the lower end of the funnel.
   
   Today, retail media is a full-funnel activity. Marketers can prime customers on one channel before prompting them to make a purchase on another. Best practice means thinking about the funnel in its entirety, not just the area you might be responsible for.
   
   

   

2. It’s important to maintain an omnichannel mindset, too
   Retail media’s full-funnel capabilities aren’t the only thing that marketers need to bear in mind. It’s also important to remember that retail media is an omnichannel opportunity – one that makes it possible to activate a campaign across multiple touchpoints both offline and on.
   
   That’s not just relevant in terms of reach, either. Research has shown that retail media campaigns are typically more effective when multiple touchpoints are used at once, boosting returns by as much as 25% As a result, marketers need to think about how their campaigns could play out across multiple channels. What might a digital-first campaign look like in-store, for instance?

   “One of the most powerful things about retail media is the combination of digital and physical inventory”

3. A data-driven approach to engagement is everything
   Modern retail media is built on first-party data, something that’s incredibly valuable. It’s accurate, compliant, and offers the single source of truth that’s needed for advanced personalisation. There’s something else that first-party data offers, though, and that’s the ability to reach specific groups who can help marketers to achieve specific goals.
   
   Tesco, for instance, focuses on audiences. It has ‘Behavioural Audiences’, which help brands reach people based on items they’ve bought before; ‘Predictive Audiences’, which can help to find those people most likely to buy a product in the future; and even specific subsets like ‘Category Buyers’ and ‘Cross Shoppers’, allowing advertisers to be even smarter about whom they engage with.
   
   Taking those audiences and combining them with the omnichannel capabilities mentioned above provides everything needed to reach the right people at the right time in the right place. And it all starts with a data-driven mindset.
4. To bring their campaigns to life, marketers need to embrace the creative canvas
   One of the most powerful things about retail media is the combination of digital and physical inventory, something that gives marketers a huge creative canvas to play with. Tesco today uses from pallet wraps, floor graphics, shop in shops to digital Clubcard app and screens across several store touchpoints. That mix creates an abundance of ways for marketers to bring their above-the-line campaigns into the store.
   
   The same is true online, too, where event and brand zones give advertisers the chance to get creative. Brand expression is alive and well in retail media today – and by embracing that creative canvas, marketers have a much better chance of capturing their customers’ imaginations.
5. Success is about more than just ROAS
   Return on advertising spend (ROAS) has long been the yardstick for retail media measurement, and it’s easy to understand why. Commercial performance is a good barometer, and businesses shouldn’t lose sight of that. But at the same time, ROAS in isolation only serves to reinforce the idea that retail media is only effective at the very foot of the funnel.
   
   Awareness, consideration, loyalty and sales: with the right approach, retail media can supercharge a brand’s performance in every one of those areas – which means that it’s increasingly important for marketers to work with partners that can measure a campaign’s impact across the funnel, too.
   
   Retail media is a rapidly evolving discipline. Not only does that make it hard for marketers to keep pace, but it can also make success a difficult thing to define.

 

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