Retail Media Networks: Capturing Audiences at (or near) Point of Sale by Creating Measurable Connections that Matter

My answer to the question “How do you define retail media?” evolved in 2022 as brands began to demand more transparency about the effectiveness of Retail Media Networks (RMNs).

The industry traditionally has defined retail media as “when retailers set up an advertising platform on their website, app, or other digital platforms within their network. This allows the store, and other brands, to advertise to customers on sites like CVS or Walgreens. It’s a form of in-store advertising in a digital format.”†

Today, the rapid growth of RMNs is fueled by a retailer’s desire to monetize their first-party data to unlock new revenue streams. I would argue that ultimately the success of an RMN will be measured by its ability to deliver a holistic consumer experience rather than simply placing an ad in front of them at a point in time. More specifically, it’s about creating measurable connections that matter for consumers.

Let’s break this down more concretely:

In the early days of retail media, brands were willing to invest to please the retailers. Increasingly, brands are demanding transparency into the return on their media investment, yet the depth and breadth of measurement capabilities across RMNs varies widely. While everyone strives to produce an Incremental Return on Ad Spend (iROAS) metric, is that enough? Sophisticated marketers have begun asking for more. A common question is how does one channel in an RMN’s portfolio perform against another? For instance, what is the return on a retailer’s on-platform experience versus advertising on its checkout screens?

I’d challenge that question with another one: How does an on-platform experience and checkout screen experience each contribute to the overall campaign performance, and did the individual channel investments align to the overall objective of the brand?’ The allocation of media dollars across channels for a brand looking to launch a new item will likely look different from an existing brand looking to increase its market share. Each channel will contribute differently, underscoring that the total value of a media investment does not come from a one-size-fits-all metric of success.

The future of retail media will break down traditional media silos, forcing advertisers to think holistically across touchpoints about how to deliver the right experience in the right moment. The consumer journey is morphing from a linear funnel into a more fluid loop.

A shopper is experiencing a DOOH ad in one moment and, in the next, they are consumed by their phone where they are served digital media. A drive to work becomes an opportunity to make a shopper aware of your brand with an eye-catching billboard. A stop at the gas station is an opportunity to educate a consumer on your brand’s features and benefits via GSTV. A gaming experience is an opportunity to connect with younger members of the household and drive awareness of your brand beyond the primary shopper. A late-night browsing session is an opportunity to drive conversion with shoppable media.

Extending the depth and breadth of channels, inclusive of newer channels such as augmented reality, social and gaming, is critical as these are all opportunities to influence shoppers’ decision-making. But just activating in these channels is not enough. These experiences must be cohesive and natural.

Shoppers care more than ever about the values of the brands they buy—55% of consumers consider the impact on climate when making a purchase, a 15% increase from last year.ˆ Be it social justice or sustainability, people are making choices at the shelf that reflect their priorities. Both brands and retailers share their values via their messaging and advertising medium choices. For example, retailers such as Kroger, Walgreens, and Ahold Delhaize are demonstrating their commitment to environmental sustainability by collaborating with Volta to bring EV charging infrastructure to their customers. And brands are also making smart investments in this area. A recent Volta case study showed how a snack brand that featured sustainability messaging outperformed iROAS benchmarks by nearly 2x.

Retail media is constantly growing and evolving as retailers and brands learn more about its powers. As highlighted by many of my industry colleagues, it’s important we address the fact that consumers are demanding more. A forward-looking approach to RMNs acknowledges the winning equation will include more personal, relevant connections grounded in the values they share with their favorite brands and retailers.

ˆVolta Climate Conscious Consumer Study, November 2022