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Retailers should consider sharing data from their retail media networks (RMNs) in real time and expanding the promotional tools available to brands on these networks, according to a new report from Coresight Research and NIQ.
The report estimated that RMNs will generate $51.9 billion in revenues in 2023, up from $43.3 billion in 2022. However, some of that increase will come from brands shifting their spending away from traditional trade spending, such as case rates (discounts at which a manufacturer sells bulk product to retailers) and in-store merchandising expenses. In fact, 94% of brands surveyed in the report said they plan to divert some of their planned dollars from trade marketing to fund retail media in their upcoming marketing budget.
Sixty-eight percent of respondents that plan to reallocate funds said they plan to reduce case rates, followed by 59% that said they would reduce fixed trade budgets, and 57% that said they planned to reduce in-store merchandising expenses.
Amid the widespread expansion of RMNs, brands are evaluating how they use them and will seek out those that are delivering the best results, according to the report.
“The large number of RMNs in the market means there is a lot of choice for brand advertisers, making it more important than ever for retailers to differentiate their offering,” the report stated.
One of the ways that retailers could make their RMNs more valuable to brand advertisers would be for retailers to share data in real time during ad campaigns, the report said. It found that 77% of brands said that they do not receive data in real time. Real-time data sharing during campaigns has numerous benefits for advertisers, the report said, citing the potential ability to quickly identify why a campaign is not working, as well as the ability to glean insights about what types of shoppers are interacting most with the ads, for example.
Among the 100 brand manufacturers surveyed for the report, 97% said that having access to data in real time would lead them to increase their ad investments.
Broad range of promotional tools
In addition, retailers should also focus on providing a broad range of promotional tools on their RMNs. About two thirds of the brands surveyed (67%) said they expect digital or physical coupons to be a part of an RMN, followed by social media promotions, at 66%.
Other tools that brands said they expect from retail networks included:
- Loyalty program promotions (60%)
- Personalized proximity promotions (56%)
- In-store promotions (48%)
- In-store digital displays (46%)
Brand advertisers expect an RMN to offer 3.4 promotional tools, on average, the survey found.
Giving advertisers more control
The report also found that brand advertisers would benefit from a self-service platform that allowed them to make more targeted, digital offers within retailers’ RMNs.
Almost all brands surveyed (95%) said they are using non-digital coupons in their marketing mix, but 96% would divert their marketing budgets from non-digital coupons to digital coupons if they were able to target their audience via a self-service platform. In addition, 91% of brand advertisers would be more likely to do more retailer-specific offers if they had more control over the process via a self-service platform.
Transitioning from non-digital to digital coupons also benefits retailers, the report noted, as they can be incorporated into retailers’ loyalty programs and generate more first-party data for retailers.
Overall, RMNs present opportunities for both retailers and brand advertisers, the report concluded, but it also noted that the market is “far from mature and is developing quickly.”
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