Dunnhumby publishes a white paper entirely dedicated to Retail Media, the trends behind its birth, the current landscape, new regulations on advertising targeting and the emerging needs of consumers, distributors and manufacturers.
Between 2020 and 2021, retail media spending increased by 42% to € 640 million and this growth is not expected to slow down. According to the latest data from IAB Europe, growth of + 52.3% is expected in 2022. Ultra rapid growth in part due to the global pandemic and the resulting explosion in online sales. In fact, distributors, many of whom are used to offline marketing equipment, are forced to accelerate their digital transformation.
To better understand this craze, it is important to remember that mass distribution is a highly competitive industry. “The price war is raging and margins are relatively low. And despite what one might think, mass distribution did not enrich itself during the crisis. Covid-19 has led to an increase in operating costs and extraordinary expenses related to the pandemic (bonuses paid to personnel, protection measures, logistics, etc.), putting the profitability of distributors at risk “, underlines Tanguy Pincemin, director of the representative commercial France in Dunnhumby.
While the rise in costs did not in itself lead to the emergence of retail media, this partly explains the sudden and growing interest of distributors. In this challenging business environment, retail media have proved to be the ideal answer for traditional brands to drive sales, improve profitability and increase customer satisfaction through highly personalized offerings.
And not only distributors are benefiting from the arrival of retail media. Consumer brands, which have been under great pressure for over a decade, quickly realized the potential of this advertising medium. Minimally intrusive, highly personalized, highly targeted (thanks to the provision of customer data) and easily measurable in a safe and relevant environment (distributor sites), retail media advertising helps create an optimal customer experience. A godsend in a world soon without third party cookies! A winning combination that explains the spectacular evolution of producers’ advertising spending.
However, despite the recent boom in retail media, its potential remains largely untapped. The opportunities, but also the challenges to be met in order to exploit the expected margins, are many!
The customer, at the heart of Retail Media
As we have seen above, the health crisis has disrupted the eating habits of consumers. In 2020, in France alone, online sales of food brands increased by 40%. While the French generally remain very attached to brick-and-mortar stores, these figures should warn brands and distributors of the need to multiply the number of touch points with their customers by using all advertising channels at their disposal. In its report, dunnhumby outlines its guide to key retail media channels in 2022, focusing specifically on digital (including digital onsite and offsite) and physical (including all in-store activations) channels. Retail media must be omnichannel by the end of. 2022 to get the most out of reaching people.
Thanks to the customer data of the brands – brands and distributors have the possibility, after active collaboration, to put the customer at the center of their strategy and thus respond precisely to their expectations by delivering highly personalized messages and offers.
In summary: the means of retail sale, if correctly used and customer-oriented, allow us to serve a threefold interest: that of the customer first of all – who receives promotions and relevant and useful information during the purchase process, that of the brands of which it sells and that of the distributor who sees it as a new source of income.
dunnhumby Sphere: an important tool for seizing the Retail Media opportunity
It is in this context that the dunnhumby Sphere all-in-one platform was designed, the only truly customer-centric platform on the market. Sphere relies on the latest technologies (AI) to analyze a multitude of data. Fully integrated all-in-one platform, modules enable audience targeting, media booking, forecasting and measurement across all your retail channels. In terms of results, duunhumby Sphere can double the return on ad spend (ROAS) compared to standard descriptive segmentation models.
“Distributors and brands are working together in ways that improve the customer experience,” says Julie Jeancolas, head of multimedia products and customer engagement at dunnhumby. Distributors set their own parameters on how advertisers can connect with their brands and have self-service access, making it easy to find the right customers with the right messages. ”
And since any system using customer data or e-commerce solutions must be secure and reliable, dunnhumby Sphere, a cloud-hosted solution, protects data using the best existing standardization and security protocols.
For more information, download the free dunnhumby whitepaper.