In 2023, the retail media story is bigger than just CPG brands
Sponsored by Best Buy Ads
Retail media networks have surged in recent years as retailers leverage first-party data to establish robust media and advertising businesses for brands.
While RMNs are most broadly adopted among brands in the consumer packaged goods industry, non-retail and specialty brands are increasingly turning to RMNs for effective performance marketing in a brand-safe environment.
According to research from the Association of National Advertisers, 74% of advertisers using RMNs are in the CPG sector, followed by health and beauty (8%). Less than 5% work in the technology, consumer electronics or services industries. However, according to a 2022 McKinsey survey, more than 75% of non-CPG advertisers anticipate increasing spend with RMNs in the next year. This includes advertisers in consumer electronics (92%), apparel and footwear (76%) and other specialty retail (75%).
“Non-CPG brands — from electronics brands to brands not sold at retailers — have a more nuanced relationship with RMNs,” said Jen Jensen, vice president, Best Buy Ads partner and category marketing at Best Buy. “These brands have their own data sets, etc., but any brand that wants to target audiences based on first-party data can benefit from retail media networks.”
Omnichannel display aimed at audiences showing intent is driving sales
According to Jensen, one of the reasons that RMNs are beneficial in non-CPG spaces such as consumer electronics is the longer consideration window during which shoppers research their purchases.
“With CPG, you see high frequency but low consideration, so customers shop often — but the ability to influence the decision is lower,” explained Jensen. “With non-CPG, the customer spends more time considering and researching but makes purchases less frequently. Specialty retail also has a much different mix of customer journeys and omnichannel sales. This comes into play with these brands’ RMN activations because it influences media mix, measurement and, ultimately, where they can meet customers.”
Considering this, one leading electronics brand worked with Best Buy Ads to increase sales week-over-week during a critical launch period.
Search audiences and consumers demonstrating intent were identified using Best Buy’s first-party data. These audiences were targeted with a variety of cross-category, high-impact display placements across desktop, mobile and app. As part of the campaign, in-store advertising was also used, particularly at the point of sale, to increase urgency and reduce hesitation on the part of shoppers. Display units and in-store advertising emphasized product arrangement and promotional messaging.
The omnichannel campaign resulted in an 18% increase in online revenue, a 47% increase in online units sold, a 41% increase in product page views and an 18% increase in omnichannel revenue week-over-week.
Brands are leveraging first-party data to segment new audiences and boost engagement
RMNs are not only for endemic brands sold at specific retailers. Products and services exist on a spectrum of relevancy, including complementary, near-endemic and entirely non-endemic brands.
For example, Best Buy Ads was working with a meal kit company that needed a unique way to reach new customers. To do so, the brand sought to diversify its marketing tactics to reach prospects with similar attributes to the company’s existing member base. While Best Buy stores do not carry ingredients to cook meals, the retailer does sell a wide range of kitchen appliances and cookware that fit into the meal kit company’s customer journey — making Best Buy’s audiences relevant to the brand.
With Best Buy’s first-party data, the meal kit brand identified millions of prospective customers with attributes similar to existing subscribers. The campaign targeted three contextually relevant audience segments with high conversion potential: health and wellness, cooking aficionados and small appliance purchasers. These segments were then targeted using direct mail and offsite displays.
The omnichannel campaign drove 15 million impressions for the meal kit brand and reached 2.5 million qualified prospects, 29% above the brand’s impression goal.
Geo-targeting efforts are amplifying purchase intent for non-endemic brands
Looking to the future of RMNs, non-endemic brands are increasingly leveraging the power of first-party data from retailers that may never sell their products or services. One model for understanding this element of the RMN ecosystem is that of concentric circles of relevance to a retailer’s audience.
For instance, digital marketing agency PMG worked with Best Buy Ads during the holiday season to drive sales for a leading apparel retailer client. To reach active holiday shoppers, the campaign took a geo-targeted approach, focusing on more than 460 Best Buy stores located near the apparel brand’s own retail locations. In-store, the TV and PC monitor walls captured shoppers’ attention with high-quality video content featuring the apparel retailer.
Among the in-store channel viewers who recalled the ad, there was a 42% increase in purchase intent, and 81% were likely to buy holiday pajamas with PMG’s client. The campaign delivered 21 million impressions.
As retail media evolves, more non-CPG brands and agencies will leverage RMNs to drive conversions and generate brand awareness. According to the ANA, 75% of advertisers agree that conversions are the most important goal for RMNs, while 18% ranked awareness as the most important goal.
RMNs allow brands outside the CPG space to leverage first-party data to target consumers through omnichannel campaigns. While the frequency of these purchases may be lower, engagement for these specialty items is much higher throughout the funnel.
Because of these deeper interactions, Jensen expects non-CPG brands to continue to drive awareness and sales by tapping into RMNs, whether the brands are endemic to the retailer or not. “Our understanding of our customers is very robust as a result of their high-consideration purchase journeys,” said Jensen. “We’re interacting with them more times throughout their purchase journey and getting a strong sense of what drives their consideration and purchase decisions.”
Sponsored by: Best Buy Ads
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