Retail media is accelerating as a transformative force in digital advertising within Australia, with spending predicted to reach $166 billion in 2025. The Regional CEO of Epsilon, Rob Odd explains the core of this growth lies in “connecting various channels – on-site, off-site and in-store – to a customer ID (to ensure) consistent and contextually relevant communication through the entire purchase journey” and at the heart of this journey is a critical asset – data. Advertisers and consumers are no longer content with broad brush marketing approaches, and precision and personalisation are the currencies for successful advertising strategies in today’s consumer landscape.
Emerging Retail Media Trends
The digital advertising landscape is undergoing a radical transformation, a shift that is particularly pronounced in the wake of new privacy regulations, cookie depreciation, and changing consumer expectations. The following trends reflect this dynamic ecosystem:
- Channel Diversity: Successful Retail Media Networks will prioritise omnichannel experiences that meet consumers where they are, across digital and physical touchpoints, recognising that modern purchase decisions typically unfold across multiple interactions in both spaces.
- AI Powered Predictive Personalisation: Machine Learning algorithms are transforming retail media by enabling real-time, hyper-personalised product recommendations, that adapt dynamically to individual user behaviours and preferences.
- Creator Marketing: Platforms like TikTok and Instagram are becoming critical, especially among Gen Z consumers.
- Social Commerce: Social media platforms are evolving into comprehensive shopping ecosystems, with integrated advertising, live shopping features, and seamless purchasing capabilities that blur the lines between content, social interaction, and commerce.
- Measurement Transparency: Moving forward there will be a focus on providing deeper insights such as customer lifetime value tracking, rather than standardised metrics like click-through rates.
The Data Ecosystem Challenges and Opportunities
Recent research reveals significant challenges in retail media adoption and highlight how critical data is:
- 50% of retailers find expanding their retail media network challenging.
- 75% are concerned about technology and data management costs.
- 71% face issues with first-party data development and data security.
These challenges underscore the complexity of building a robust retail media platform and highlight that the core issues often stem from fragmented technology and data ecosystems: siloed information across channels, limited data integration capabilities, and insufficient technological infrastructure. To overcome these challenges and unlock the full potential of retail media retailers must adopt a strategic data unification approach which requires a deliberate focus on key pillars, of integration, governance, and privacy, which involves:
- Consolidating data sources across online and offline channels.
- Implementing robust data governance frameworks.
- Investing in advanced data management technologies.
- Creating a unified customer ID system.
- Developing comprehensive privacy and consent management protocols.
Success depends on creating a flexible and scalable data infrastructure that can adapt to evolving consumer behaviours and technological capabilities. Retailers must view data, not as a static resource, but as an asset that requires continuous investment, refinement, and strategic alignment with the broader business objects.
Strategic Data Unification for Competitive Edge
- Consolidating Data Sources Across Online and Offline Channels
Retailers operate across multiple channels such as e-commerce websites, physical stores, mobile apps, and social media. Each of these generates critical customer data, but without consolidation, opportunities are missed.
- Unified Data Hubs: A centralised hub integrates online behaviour (e.g. website browsing) with offline interactions (e.g. in-store purchases). This provides a comprehensive customer view, enabling consistent engagement.
- Real-time Synchronisation: Leveraging real-time (or very near real-time) data integration tools ensures up-to-date insights, allowing retailers to respond immediately to customer needs.
- Implementing Robust Data Governance Frameworks
Data governance is the foundation of trust and data quality. Without a clear framework, retailers risk inaccuracies and compliance failures.
- Standardised Data Practices: Establishing consistent data definitions, formats, and rules minimises duplication and errors.
- Clear Ownership and Accountability: Assigning roles to oversee data accuracy and usage ensures alignment with business objectives.
- Proactive Risk Management: Governance frameworks should account for potential risks, from data breaches to inaccuracies, with clear mitigation strategies.
- Investing in Advanced Data Management Technologies
Modern retail media networks demand advanced tools that handle vast amounts of data efficiently.
- Cloud Based Data Platforms: Scalable cloud solutions such as Snowflake, Oracle Cloud Infrastructure Data Flow, Databricks, Google BigQuery or Azure Synapse Analytics provide the infrastructure to store, process, and analyse data seamlessly.
- AI-Powered Insights: AI tools can analyse complex data sets, uncovering patterns and delivering actionable insights faster than manual methods.
- API-Driven Connectivity: APIs enable interoperability between systems, ensuring all tools within the tech stack communicate effectively.
- Creating Unified Customer ID Systems
A unified customer ID is the foundation for personalised and consistent customer experiences.
- Cross-Channel Customer Identification: By linking customer interactions across touchpoints to a single ID, retailers can track the full customer journey and tailor their communications.
- Identity Resolution Tools: Advanced tools such as identity graphs, reconcile disparate data points to create a singular, accurate customer profile.
- Developing Comprehensive Privacy and Consent Management Protocols
With privacy concerns at the forefront, retailers must integrate privacy into their data strategies from the outset.
- Transparent Consent Practices: Clear opt-in mechanisms and privacy disclosures build trust while ensuring compliance.
- Privacy-Centric Architecture: Tools such as Customer Data Platforms (CDPs) allow data to be managed and utilised in a way that prioritise consumer privacy.
- Regulatory Alignment: Adherence to local and global privacy laws – such as Australia’s Privacy Act , CCPA and GDPR must be a continuous effort.
The Data-Driven Future of Retail Advertising
Retailers who successfully implement strategic data unification will not only overcome current challenges but also gain a competitive advantage by creating a flexible and scalable infrastructure that adapts to the evolving retail landscape.
- Customer-Centric Innovation: Unified data allows for hyper-personalisation, delivering tailored experiences that build loyalty and drive revenue.
- Operational Efficiency: Streamlined data systems reduce duplication, manual errors, and operational costs.
- Future-Ready Framework: By investing in scalable technologies and robust framework, retailers can future-proof their operations against technological and regulatory shifts.
As Retail Media platforms transform from basic advertising channels into sophisticated ecosystems of consumer insights and marketing intelligence, retailers who prioritise data unification can become leaders in this space. Those who successfully harness this data-driven approach will not only achieve measurable success but will share the future of digital advertising.
Ready to unlock the full potential of your Retail Media Network?
Talk to us about unifying your data ecosystem and transforming your advertising strategy. Our team of data experts will help you harness the power of integrated retail media insights to drive measurable results.
Sources
Business Insider – ‘How Retail Media Networks are Changing the Future of Advertising’ – September 2024
Inside Retail – ‘Retail Media Best Practices: The Benefits of an Evolving Strategy for Retailers’ – September 2024