Retail Media Networks: How the physical store will power their next phase of growth
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Presentation from NRF 2023: Retail's Big Show Kristi Argyilan, Albertsons Media Collective Aaron Dunford, Nordstrom Andrew Lipsman, Insider Intelligence Retail media is disrupting the digital advertising industry and creating new high-margin revenue streams for retailers. The opportunity behind this fast-growing $40 billion US market is significant, with brands eager to capitalize on retailer first-party data to reach shoppers with relevant advertising experiences. In this session with retail media leaders, we examine how retail media networks are evolving to meet consumers shopping behaviors wherever they are, whether that be in-store or online.
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Retail Media Networks: How the physical store will power their next phase of growth
- 1. Retail Media Networks: How the physical store will power their next phase of growth ANDREW LIPSMAN Principal Analyst, Retail and eCommerce Insider Intelligence
- 2. Retail Media Networks How the Physical Store Will Power their Next Phase of Growth January 16, 2023 Andrew Lipsman Principal Analyst
- 3. Retail media is digital advertising’s third big wave after search and social–and it’s destined to eventually be the biggest Retail Media: Digital Advertising’s Third Big Wave Retail media Social Search Search: 14 Years 2002-2016 Social: 11 Years 2008-2019 Retail Media: 5 Years 2016-2021 Years from $1B to $30B
- 4. Retail media will be a $45 billion market this year, and will continue growing by $10 billion a year $13.2 $20.8 $31.1 $37.4 $45.1 $55.3 57.3% 49.3% 20.4% 20.5% 22.9% 0% 10% 20% 30% 40% 50% 60% 70% $0 $10 $20 $30 $40 $50 $60 2019 2020 2021 2022 2023 2024 Retail media ad spending% Change US Retail Media Ad Spending $ Billions
- 5. Every retailer is becoming an ad network… but which ones have what it takes to scale? Digital Marketplaces / Platforms Mass Merchandise / Department Category Specialists Commerce Intermediaries Other Commerce Verticals
- 6. 76.8% 76.5% 77.9% 77.9% 76.8% 75.5% 3.5% 4.8% 5.1% 6.0% 7.0% 8.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2019 2020 2021 2022 2023 2024 Amazon dominates retail media, but next-tier RMNs are carving out meaningful positions Source: US Retail Media Ad Spend Market Share Every 1% in market share = $450 million in high-margin revenue
- 7. Top retail media networks will be among 2023’s biggest winners in digital advertising growth 42% 41% 36% 30% 26% 19% 13% 10% 5% 3% Retail Media Big Tech Streaming The Duopoly Source: 2023 US Digital Ad Revenue % Growth Forecast Among Top Platforms
- 8. Retail media fills a huge need for brands It sits at the intersection of three massive marketing disruptions TV RETAIL MEDIA Digital Ads In-Store Trend 1 Ratings in Decline Trend 3 Digitizati on of the Store Trend 2 Deprecation of Third-Party Identifiers 8
- 9. Future retail media budgets will pull from everywhere – digital, linear TV, and shopper/trade marketing Sources: Net New Dollars Cannibalization $ Billions
- 10. 3 ways the physical store will power the future of retail media advertising 10
- 11. #1 Retail media’s streaming TV advertising opportunity will be powered by in-store sales data $0.51 $0.88 $1.83 $3.19 $4.75 $6.54 72.4% 106.7% 74.7% 48.7% 37.7% 0% 20% 40% 60% 80% 100% 120% $- $1 $2 $3 $4 $5 $6 $7 2018 2019 2020 2021 2022 2023 US Retail Media Off-Site Digital Ad Revenues Ad Spend % Change Source: $ Billions
- 12. #2 In-store attribution data will complete the ROAS picture for brands with ‘the other 85%’ of retail sales 45.5% 44.8% 44.1% 42.1% 41.4% 41.4% 39.3% 35.9% 34.5% 32.4% 32.4% 24.8% 24.1% Most Important Attributes for Retail Media Networks % of Brands Indicating “Extremely Important” Source:
- 13. 212.6 119.0 73.4 67.9 66.0 62.8 53.0 41.4 34.3 27.7 24.4 22.7 15.9 144.9 78.2 35.1 55.8 22.4 41.0 24.5 14.7 29.2 55.2 41.7 8.1 13.7 In-Store vs. Digital: US Monthly Audience Reach November 2022 In-Store Digital #3 In-store retail media will prove that physical stores are the next major media channel Sources: Millions of Unique Visitors
- 14. 14 Kristi Argyilan SVP, Retail Media Aaron Dunford Sr. Director, Digital & Marketing