‘If your retail media strategy is digital-only, you’re doing it wrong. Here’s why’

Let’s kick things off with a pop quiz. No prizes, but see if you can guess what the following headlines have in common.

“The rise of retail media networks: why the digital ad revolution is taking off”; “Retail media spend up 12% in 2023 as digital landscape shifts”; “Retail media will make up one-fifth of worldwide digital ad spend this year”.

If you answered: “They all make it sound like retail media is exclusively about digital advertising”, then congratulations.

In the last few years, we’ve heard a lot about the rapid growth of retail media. We’ve heard how it’s “the fastest growing ad channel”, how the European market is expected to “grow by 36% in 2024” and that retail media ad sales are “predicted to overtake TV by 2028”.

“The buzz around digital has cancelled out a lot of the noise around in-store media”

A lot of the focus has been on retail media’s digital credentials. In some ways, that’s understandable.

From sponsored search results through to closed-loop measurement, there’s plenty for brands to get excited about when it comes to digital retail media. At the same time, the buzz around digital has also cancelled out a lot of the noise around in-store media.

And there’s the problem. Because if you’re thinking about retail media as a digital-only proposition, then you’re doing it wrong.

There are three key reasons why brands need to include store media as part of their retail media strategy:

Store media speaks to customers where the action happens

Physical stores are where most of us still do our shopping. Take these numbers from Tesco, for instance. Even as the UK’s leading online grocery retailer, Tesco says 85% of its sales take place in store.

What’s more, brands have a huge chance of influencing those purchases, with most shoppers making on-the-spot decisions about what to buy. Tesco says 85% of its customers are spontaneous in their purchasing choices.

Finally, there’s the sheer scale to consider. More people than live in Manchester and Birmingham combined are exposed to in-store advertising at Tesco every week – 6.13 million. So, store media offers a gigantic reach to a receptive audience, all in a location where people can buy your products.

Store media is highly measurable and delivers results

Digital advertising offers a lot of accountability. If a shopper clicks on your ecommerce banner ad and puts that product in their basket, that’s a fairly concrete measure of its effectiveness.

What about store media, though? How do you measure the sales impact of a shelf talker or a digital screen?

“In a broad analysis of printed point-of-sale campaigns, we found that for every £1 spent, brands generated £1.56 in product sales uplift”

Measurement of store media has become much more sophisticated in recent years. At Dunnhumby, for example, we use a test-and-control approach.

Test stores will run a campaign, while control stores won’t, meaning that we can see the true impact of exposure on shopper behaviour.

Using those techniques, we’ve seen first-hand how effective store media can be. In a broad analysis of printed point-of-sale campaigns, we found that for every £1 spent, brands generated £1.56 in product sales uplift.

Store media is constantly evolving – and constantly improving

Store media isn’t static. New ideas and technologies are giving brands smarter ways to engage with customers.

In-store digital screens, for example, are an effective medium on their own. Add data science into the mix and they become more impactful still.

We’ve found that using data science to analyse and optimise the performance of digital screens can improve sales uplift by as much as 40%.

Then you have exciting and emergent new ad formats. Turning to Tesco once again, earlier this year the retailer began offering ad placements on its Scan as you Shop handsets. As a result, brands now have the chance to communicate with customers no matter where they are in store.

Innovative new approaches like this are helping to ensure store media keeps moving forward.

I’d like to leave you with one final thought on the power of store media.

When we surveyed a large group of UK consumers recently, we asked them which media formats had ever persuaded them to purchase a product.

A fifth said they had been persuaded by store media. Not only is that on par with TV (23%), it’s twice as many who said the same about social media (9%) or ecommerce ads (11%).

Simply, store media works.