Retail media networks (RMNs) are a rapidly growing channel for advertisers. RMN revenue in 2022 was estimated at $37.5 billion by the IAB of their Internet Advertising Revenue Report.
The key to RMN’s success is how interactions with brands can enhance the patron experience. Digital media experts at Kroger and The Home Depot have spent years developing media networks keeping this key point in mind. If a branded ad interrupts the shopper’s journey, it doesn’t help the brand, the retailer or, most significantly, the shopper.
Helping when customers research products
Where can brands get entangled in the shopper journey? At The Home Depot, a supplier approached the retailer about retargeting customers on social media. Soon, the corporate created opportunities for other suppliers to deliver ads that drove customers to the retailer’s product pages.
This was back in 2018. In 2019, The Home Depot’s Retail Media+ (often known as RM+) was launched. Brands now have opportunities to show ads on company owned properties, including homedepot.com, the retailer’s app, in-store and email, in addition to offsite media channels like social and video.
“We didn’t want it to disrupt the shopper experience,” said Melanie Babcock, vice chairman, Retail Media+ and monetization for The Home Depot. “Our customer spends quite a lot of time researching on our site before making a call. They’re excited about in the event that they have the best tools, skills, time and capabilities for a project. You have a lightweight to install, must you do it on your individual? The consideration time is far less for traditional retailers.”
Because of this longer, more involved customer journey, the retailer decided decided to let suppliers have the lion’s share of the RMN ad inventory. That means that the majority of the ads served to customers during their journey are endemic products, ones that could be bought at Home Depot.
“Onsight and in-store are very connected,” said Babcock. “We see that in our customers’ behaviors, and we wanted to be additive to that by keeping the shopper in mind and not only monetizing the web site. We’re bringing the supplier into the shopper journey.”
Personalized precision with customers
Supermarket chain Kroger is one other major retailer with a sturdy RMN, called Kroger Precision Marketing (KPM). KPM is managed under a wholly-owned subsidiary, 84.51˚.
“The common denominator is data science,” said Brian Spencer, KPM’s marketing director. “We have a legion of information scientists available under 84.51˚. There’s shelf assortment and other areas of personalization in our stores. That same talent base is what fuels the personalization behind Kroger Precision Marketing as well.”
Prior to starting its retail media business, Kroger built digital experiences for patrons to search products, create grocery lists and receive digital coupons. These tools made it possible for KPM to introduce brands in a relevant way.
Unbranded search terms are 90% of the highest 500 searches in Kroger digital touchpoints, Spencer said. That means many shoppers are on the lookout for products and not using a specific brand in mind. Directing those customers to a selected brand or product is a logical next step of their journeys.
And, because digital customers are multi-taskers, they aren’t only on the lookout for products available at a Kroger store. For instance, you might be planning a Super Bowl party and need to buy snacks. But what should you are also considering a latest TV? Cases like that, but in addition many others, are where non-endemic brands slot in.
“As we explore non-endemic opportunities, top of mind is that that is activated in a way that isn’t intrusive or obnoxious to our consumers,” said Spencer. “If it’s something that is sensible for our shoppers, we’ll have a look.”
Expanding to offsite journeys
“Retail media data could be very advantageous to every kind of brands, particularly within the grocery category,” said Spencer. Grocery shoppers make purchases several times a month, and often multiple times per week. And these purchases cut across many categories.
“That kind of knowledge is clearly vital for consumer packaged goods, but outside of CPG there’s greater interest because a few of these non-endemic brands are on the lookout for relevant ways to reach audiences,” he said. “Automotive brands or fast food brands, they might consider our data set as one other way to activate across the open web.”
Offsite RMN opportunities are the fastest-growing area for KPM. Kroger has been a partner with streaming service platform Roku for 3 years. And this week, Disney Advertising announced a partnership with KPM for some Disney media properties, starting with Hulu.
Dig deeper: CTV added to Kroger’s retail media network business
“Brands, but more typically agencies, are able to go in and activate programmatic display and CTV through a DSP of their selection, and set their very own safety standards and activate through a self-service portal — and see sales results and optimize against in-store and online sales,” said Spencer.
“Retail media is more and more being regarded as just media,” he added. “It’s more and more a part of the entire touchpoint consideration set that agencies are . The traditional lines between shopper marketing and brand marketing have gotten more blurred.”
The Home Depot can be how to expand RM+ offsite into CTV. It’s also piloting in-store video screens at 50 locations, currently, to see how shoppers’ digital journeys could be enhanced after they get to the shop.
“We’re the last mile in promoting, which is at all times the costliest a part of the journey,” said Babcock. “There’s huge value to our supplier to connect to that customer and also to know more about that customer.”
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