The retail media network space is growing rapidly, with ad investments expected to top $60 billion by 2024. And it’s no surprise considering the benefits that retail media offers for all parties involved. Retailers unlock new revenue streams through retail media, while brands can reach shoppers in a commerce moment and access precious first-party data.
We conducted proprietary research, which we analyzed in-depth in our Retail Media Research Report, to understand more about what retailers and brands expect from each other. In this blog post, we’ll focus on one critical aspect – partnerships.
What do brands care about most for retail media networks?
Building the right partnerships is key for brands to reach the right audiences and for retailers to offer additive, relevant content to their customers. To make retail media work, brands and retailers need to feel comfortable with and confident in each other’s ability to deliver.
This importance of relationships shined through in our survey. When asked what key features they look for in a retail media network, 65% of brands wanted a retailer who was easy to work with and 50% wanted the ability to partner in the planning process with someone who understands their business.
Both of these percentages increased from our 2021 survey. As the retail media network landscape matures, we’re seeing more parity in fundamental offerings like ad solutions and reporting. That’s why brands are increasingly looking for retailers who can be trusted advisors – offering intangibles like strategic guidance and being easy to work with.
The benefits of finding the right retail media network partner
Brands realize several benefits when they find the right retailer to partner with. They can:
- Better understand their audience by accessing new insights from the retailer’s first-party data.
- Establish a closer relationship with current and potential shoppers through a closer relationship with the retailer.
- Provide a better brand and shopping experience through personalization opportunities with effective content and creative.
Just a few short years ago, retail media networks sat almost exclusively with large ecommerce sites and big-box retailers. However, with the recent growth explosion, more specialty retailers have established media networks too. This means there are more options for brands to find a retail media network whose audiences align well with their target consumer. Both endemic and non-endemic brands (which are brands that don’t sell their products directly on the retailer’s site) can get valuable insights and reach prospects in new ways.
What a strong retail media partnership looks like
At Merkle, we’re fortunate to help many great brands forge partnerships with retail media networks. One example of that is with Nestlé USA and Instacart. The partnership across our three companies dates back to 2016, and we’ve been working together ever since to drive consistent year-over-year growth in the changing e-retail landscape.
The relationship between Merkle, Instacart, and Nestlé USA highlights several core components of a strong partnership:
- Adapting ways of working as brand needs change – in this case, moving from managed services to a self-service model.
- Cohesive strategy across display activations to facilitate a full-funnel shopping experience.
- Innovation in measurement and reporting to support new KPIs.
Our strong foundation enabled Merkle and Instacart to effectively collaborate with Nestlé USA when they needed a new measurement framework. They wanted to move beyond sales and return on ad spend (ROAS) metrics to find a new way to evaluate success that increased profitability while continuing to scale and increase shelf presence. To meet those needs, all three teams worked together to adjust campaign management and optimizations to maximize investment in a changing landscape. Click to read the full details of the case study and our results.
How retailers can be better partners for brands
The data in our research repeatedly reinforced the importance of partnerships across retail media (we didn’t even dig into retailer relationships with tech platforms here – but they’re critical, too!). For brands to maximize their retail media investment, they need to trust that the retailer will be flexible to their needs, transparent with their data, and generous with their product offerings. Retailers can use the data in figure 1 to understand what brands are looking for and adapt their approach accordingly. As with any good relationship, they should check in frequently with their current brand partners to see what’s working and what’s not to adjust and grow accordingly. Retail media is a huge opportunity for brands and retailers alike, and with the right partners in tow, both sides can grow and help future-proof their businesses.