Are Retail Media Networks like Middle School Boys’ Locker Rooms?

Oct 15

Written by Eric Anderson

Every middle school boy’s locker room is full of talk and testosterone…but mostly TALK. Today’s Retail Media Networks are similar from my experience; a lot of guys spreading rumors, more “I swear it’s true, man. I heard it from a reliable source who knows a guy who knows a guy.”, genuine enthusiasm and desire, but no REAL needle-moving results. In other words, all gas and no sass.

However, the future of Retail Media Networks for independently owned grocery store operators looks increasingly promising. Again, the FUTURE looks promising, but maybe not structured in the manner as so many RMN providers have been selling.

RMN Evolution Advantages

1. Increased Revenue Streams: By leveraging Retail Media Networks, independent grocery stores can generate additional revenue through advertising partnerships with brands looking to promote their products directly to consumers at the point of sale.

2. Enhanced Customer Engagement: Personalized and targeted advertisements can improve the shopping experience, making it more relevant and engaging for customers. This can lead to increased customer loyalty and repeat business.

3. Access to Data and Insights: These networks can provide valuable data insights into customer behavior and preferences, allowing store operators to make informed decisions on inventory, promotions, and even store layout.

4. Competitive Differentiation: Utilizing Retail Media Networks can give independently owned grocery stores a competitive edge by utilizing advanced technology and marketing strategies that are often only accessible to larger chains.

5. Operational Efficiency: Integrating advertising networks with existing store operations can streamline marketing efforts, reduce costs, and improve overall efficiency.

Some pretty big bullet points there, and some independent grocers are diving in hoping to realize some of those benefits from RMN’s in their stores. Their approach, however, is built on the promise of scale. This is the nature of most RMN’s or database marketing organizations hitting our space aggressively. Some with over $200 million in PEG money. Again, one must have scale. The promise of real scale is very difficult, if not impossible in our space, though. Why? Because independent grocers are, well, INDEPENDENT.

There is no one-size-fits-all marketing approach in the independent grocer space, and organizations entering our space from other verticals rarely grasp that grocers’ marketing budgets are tight, and relationships with suppliers even tighter. This has been the marching order of any independently owned business since, like, forever, and always should be. RETAILERS SHOULD OWN THE RELATONSHIPS WITH CPG’s AND LOCAL VENDORS…NOT RMN’s. When retailers start handing over all marketing revenue to 3rd party platforms, they lose control.

It’s my belief that RMN’s don’t necessarily need to be built on scale (although scale does create additional value), but rather, can be built for independent proprietors in a manner that is affordable and can generate a fair and reasonable return; not the numbers being thrown around by newcomers to the grocery space.

For independently owned supermarkets to compete with giants like Amazon, Walmart, Kroger and others in the realm of Retail Media Networks, they can adopt several strategies, but on a smaller scale:

Strategy on a Smaller Scale

1. Leverage Local Knowledge:

Personalized Experiences: Use deep local knowledge to offer highly personalized shopping experiences that big chains may not match. Understanding local customer preferences allows for more tailored promotions and product recommendations.
Community Engagement: Create marketing campaigns that resonate deeply with the local community, building strong customer loyalty.

2. Invest in Readily Available Technology:

Modern Solutions: Incorporate advanced technology such as data analytics, digital advertising platforms, and customer segmentation tools to better understand and target customers.
Partnerships: Partner with technology providers specializing in retail ad tech to offer simple and sophisticated, RMN solutions.

3. Data Utilization:

First-party Data: Utilize first-party customer data collected through loyalty programs, online orders, and point-of-sale systems to offer targeted ads and personalized offers.
Analytics: Analyze shopping patterns to optimize ad placements, inventory management, and promotions.

4. Unique Selling Proposition (USP):

Exclusive Products: Stock unique, locally sourced products that big retailers cannot easily offer.
Customer Service: Emphasize superior customer service and direct engagement with customers to build strong relationships.

5. Collaborative Advertising Through a Platform:

Partner with Local Brands: Work with local and regional product vendors to create advertising content that highlights local products and producers.
Cross-Promotions: Collaborate with other local businesses for cross-promotional activities that benefit both parties.

6. Omni-Channel Presence:

Seamless Integration: Ensure a seamless customer experience across online and in-store channels. This includes synchronized promotions and cohesive branding.

7. In-store Innovations:

Digital Signage: Utilize in-store digital signage to run dynamic and relevant ads, enhancing the shopping experience and driving sales.
Interactive Displays: Integrate interactive and informative displays that engage customers and provide useful product information and promotions.

8. Building Trust:

Transparency: Be transparent about data usage and prioritize customer privacy to build trust.
Feedback Mechanisms: Implement robust feedback mechanisms and act on customer feedback to continually improve the shopping experience.

Let the Retailers Lead

By focusing on these strategies and partnering with RMN’s that allow the retailer to lead, independently owned supermarkets can create compelling Retail Media Networks that are competitive with larger players. The retail dollars won’t be inflated, nor should they be. Our client base is built on retailers with 10 stores or fewer. The dollars are there, but nobody is going to deliver buckets of money on a retailer’s doorstep every month through RMN’s. At least not today.

Back to the locker room. Do the sniff test. If the socks smell a little funky…they probably haven’t been washed in a while. Washing them is not bad luck, it’s just good hygiene. Don’t buy the hype. If Retail Media Networks promise surreal returns, do the sniff test. If it seems too good to be true, it’s probably just more locker room talk.