Talks of an impending recession have brands scrutinizing marketing costs more diligently. Retailers are also seeking ways to bolster the bottom line as consumers tighten their grips on their wallets. Amidst the ongoing recessionary pressure, data collaboration, specifically retail media networks (RMNs), has become increasingly popular for its ability to help brands gain insights on their target audience and retailers increase revenue, among other things.
As advertising networks created by retailers and spanning multiple digital channels, RMNs are a way for brand partners to reach consumers in a hypertargeted fashion in an environment where they’re already shopping. Brands looking for better targeting and personalization options to reach their customers, hungry for the vast amount of data collected across digital retail channels, are also turning to RMNs.
But RMNs can do more for CPGs and retailers, especially as consumers become more discretionary in their spending. Here’s why doubling down and investing in your retail media network is more important than ever during these uncertain times.
Retailers: Harness the Power of Data to Connect and Forecast
For retailers, RMNs have provided additional revenue streams while gaining access to new data streams emerging from consumer-brand interactions within a retailer’s network. Whether consumers click, purchase, or something in between, the data provides insights not previously available to retailers. This data allows retailers to better understand their customers and execute targeted marketing campaigns that resonate. It also provides a channel for significant revenue through ad sales for brands that recognize the direct access retailers have to their target audience, when they’re most keen to make a purchase. Retailers that were traditionally brick-and-mortar, like Walmart, recognize the magnitude of this data and have implemented their own RMN, with touchpoints for customers who prefer to shop online.
And speaking of customer preferences, the real-time data garnered from RMNs allows retailers to get a better forecast on inventory to keep on hand and purchase ahead, especially heading into a unique holiday shopping season.
Retailers looking for ways to drive revenue and profit can strengthen their RMNs to have more value propositions, such as measurement and segmentation. Those that lean into their RMNs during this time can gain back revenue dollars to offset the reduction in topline sales, improving profits.
Brands: Build Actionable Insights (and Retain New Customers)
Talk of a recession is likely to drive added scrutiny on budgets and campaign effectiveness for brands. But while brands mull over where and how to make budget cuts, investments in RMNs will actually help brands better prove their return on investment. Ad dollars invested with RMNs ensure that inventory purchased can demonstrate campaign effectiveness almost immediately. RMNs enable advertisers to make better data-driven, real-time campaign changes based on faster reporting capabilities.
What’s more, brands have an even more unique challenge: Whether based on changing shopping habits, necessity, or mainstream popularity, many brands attracted new customers during the pandemic that they now hope to convert into life-long customers. As we approach the holiday shopping season — which seems to come sooner year after year — brands have a unique opportunity to leverage audience targeting to gain new buyers and retain valuable customers through a variety of segmentation approaches that will drive overall profitability. Brands must also keep these new customers in mind as they slowly ease their way into their new lifestyle and habits.
Bottom Line: RMNs Are Here to Stay
The dramatic growth of RMNs over the past two years has been driven by the desire to find cost-effective, efficient campaigns to attract new customers. Continuing to invest in RMNs during the economic downturn will ensure its value, especially during a time when data-driven marketing is more important than ever.
Lori O’Neal is the head of global retail and CPG industry strategy at LiveRamp, a global data enablement platform.