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The US is now making the most of loyalty programs that have been quietly collecting consumer data for years

Let’s face it, retail media has rarely been seen as an exciting part of the marketing mix. It’s often been an afterthought – something you assign your budget to based on a retailer’s importance to your sales line.

Marketers have instead put their focus on shiny and glitzy above the line (ATL) campaigns that enable engaging branded communications across the likes of TV, OOH and audio, where advertising budgets have been heavily weighted for the past few decades.

Despite the higher costs, ATL has enabled brands with deep pockets to communicate with their consumers across a variety of mediums and disrupt their categories. Whether you’re an international brand or the new kid on the block, ATL has been the go-to media mix to raise awareness and increase sales of CPG products for some time.

However, a change is brewing across the pond in the US, where retail media and in turn retail media networks are booming.

Grounded in a digital and data-first approach, the rise of retail media networks (RMNs) in the US has been inspiring, with multinationals, regional players and specialists alike all getting involved for a slice of the action. These trends are echoed across multiple sectors, with Marriot recently launching its own network with Yahoo and just this month Netflix announcing its network launch with Microsoft.

 

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The rise of RMNs comes in response to changing consumer habits and the shift to online and digital, exacerbated by the pandemic. These conditions have created savvier shoppers with less loyalty for the retailers they shop at or the brands in their basket. As the emerging cost of living crisis piles on further pressure for brands and retailers in the UK, shoppers are looking to trade down into private labels and scale back on spending.

As such, brand marketing is in need of a fresh approach – one more centred in data.

The US is leading the way in first-party data usage, making the most of loyalty programs that have been quietly collecting consumer data for years. Retailers are now using this data to refine their advertising solutions for brands, encouraging more meaningful connections with their consumers.

This is brilliant news for marketers.

This targeted approach to converting customers is making every pound or dollar of marketing budgets work as hard as possible, minimising wasted impressions on audiences who are not going to purchase. Finely targeting our audiences and optimising media through programmatic channels enables brands to not only be reactive, but show the right message, in the right place, at the right time.

We can therefore use this data to inform our end-to-end marketing channel selection. There is no above the line or below the line separation of channels anymore. Marketers can be truly omnichannel in the connected commerce approach. From connected TV through to social and audio, marketeers can now use first-party retail data to refine and target their full-funnel channel mix, resulting in every medium being truly measurable to a point of sale.

Here in the UK we are seeing the first signs of this digital-led first-party data revolution alongside the rising importance of media networks. Tesco is currently running a beta trial allowing brands to access Clubcard data to target audiences via Meta social platforms, while Boots is offering a similar solution using its Advantage Card data, powered by Audience360. Both have plans to expand the channel matrix beyond social in the coming months, and it is rumoured the wider top six grocers are actively expanding into the first-party arena.

Don’t get me wrong, there will always be a place for in-store PoS or an e-commerce banner to convert shoppers in that final moment before they buy. However, media is getting more targeted, and that can only be a good thing for optimising advertising spend.

Now is the time to seize the first-party data opportunity and deliver truly connected commerce campaigns.