Customer Loyalty Programs
The Covid-19 pandemic turned the entire retail industry on its head as stores shuttered while online orders soared. As online shopping became a staple, e-commerce sites grew into some of the most valuable online real estate for advertisers seeking to engage buyers on retail platforms.
Four years later, retail media continues to grow at a remarkable pace, becoming a hot buzzword in the ad industry. But before delving into why, it’s important to clarify the difference between retail media and retail data, and the role they both play in retail media networks (RMNs).
Ellen Mulryan, the senior director of data partnerships for The Trade Desk, explains retail media as advertisements purchased on retailer platforms, like Walmart.com. On the other hand, retail data is the information stores gather about their customers via consented channels like loyalty programs. It is highly authenticated data that provides a clear picture of existing customers and gives valuable insights into their purchase behavior. According to a recent Prosper Insights & Analytics survey, over half of consumers over 18 years old participate in loyalty programs, underscoring the prevalence of retail data that advertisers have at their disposal.
Prosper - Customer Loyalty Programs
"As retailers capitalized on increased online shopping by ramping up their advertising offerings on owned channels, they quickly realized it was only a finite monetization opportunity,” Mulryan explained. “Retail data then emerged as a crucial component of retailers’ advertising offerings by providing invaluable insights into consumer behavior and preferences applied as audience targeting segments to reach those shoppers across the open internet.”
Evolving Advertising Strategies
On every advertiser's mind this year is the deprecation of third-party cookies in Chrome. As advertisers look for new identity solutions or ways to build up their first-party data, they’d be remiss to not include retail data in their plans. In fact, many have already keyed in on retail data as a boon to their media investments.
“The ice cream brand Halo Top used Kroger’s data in our platform to reach customers at different stages on their paths to purchase,” said Mulryan. “The results were a 470% return on their ad spend and over 100% in media savings.”
Major retailers like Kroger, Dollar General and Macy’s, Inc. are increasingly looking to advertising technology partners to unlock the power of their high-quality data to power ad campaign capabilities like audience-building, targeting and measurement. This momentum is further proof that retail data is positioned to go from something viewed as helpful to something indispensable.
Expanded Advertising Opportunities
When looking at the channels where consumers are spending more time, like TV streaming or audio platforms, the relevance of retail data rises further. eMarketer expects connected TV (CTV) specifically to increase by 40% between 2021 and 2024, and some of the most successful advertisers activating on this channel are layering in retail data to optimize their media investment. Pairing authenticated inventory like a streaming service with the verified buyers behind retail data is giving brands the forward-thinking solutions they need to futureproof their media investments.
Another advantage of using retail data on these media channels is the opportunity for advertisers to reach their customers much earlier in their shopping journey. Instead of waiting for a customer to enter a store or go to a retailer’s website, retail data can connect the dots to see what customer is also streaming the latest Star War series on Disney+.
The power of retail doesn’t end with audiences. It also plays a role in omni-channel attribution.
If a customer is served an advertisement while streaming a movie, retail data can help advertisers determine how that exposure maps back to in-store purchase behavior. Armed with insights into which strategies yield the most favorable results, brands can allocate their resources more strategically, and maximize impact.
These capabilities are especially valuable for consumer-packaged goods (CPG) brands who lack easy access to first-party data. Consider products like deodorant or toothpaste, where consumer loyalty often runs deep but there isn’t necessarily a direct relationship between the brand and consumer. Instead of trying to focus on amassing first-party data, brands can build their campaigns around retail data to engage with customers throughout their journey, from awareness to the point of purchase.
Challenges and Misconceptions
Despite the tremendous opportunities offered by retail data, challenges persist in access and execution. The proliferation of retailers launching media networks has created fragmentation that hinders advertisers’ ability to holistically evaluate their media buys. Lack of comprehensive measurement and standardization in the industry only exacerbates these challenges. While leading companies like Albertsons and trade groups like the Interactive Advertising Bureau (IAB) are leading the charge to make improvements, there is still a way to go.
“This desire for standardization is why we’re focused on bringing data from the world’s leading retail businesses directly into our platform to give advertisers a single point of access,” says Mulryan. “We’ve also introduced measurement tools that can connect an advertiser’s brands to their most important business goals, like sales. At the end of the day, that’s what’s most important to a brand.”
Lastly, there’s a common misconception that retail data can only be used on a retailer’s website or owned channels, creating the false notion that non-endemic advertisers, or advertisers who don’t sell products with a particular retailer, can’t benefit from using their data.
Mulryan remarked, “If I’m an auto manufacturer and looking for new minivan shoppers, a retailer with a lot of baby registries would have a lot of customers that are appealing to me also, right? A recent example we have is an insurance company who exceeded their benchmarks by 160% when they used retail data to find customers like auto enthusiasts, and home improvers. There is so much more to retail data than a lot of brands appreciate.”
No matter the industry, retail data has undoubtedly emerged as a crucial part of any advertising strategy. And as cookie deprecation looms in the digital advertising industry, it’s retail data that can lead the industry into a better future.
