The journey to establish a robust retail media business is replete with challenges, yet the rewards are substantial writes Diana Abebrese, Global Retail Media Lead at EPAM Continuum
As the retail media opportunity continues to grow, retailers find themselves at a crucial juncture if they are to take full advantage. They must navigate uncharted waters while maintaining existing operations, cultivating new skills and fostering an unfamiliar cultural shift. The transition must be balanced carefully to ensure that this new venture doesn't undermine existing revenue or alienate customer experience, the core of the business. Additionally, retailers must address the complexities of establishing a technology ecosystem that blends various solutions into a cohesive whole, all while the period of experimentation in the market starts to consolidate. Those who achieve scale, differentiation, and first-mover advantage are best positioned to dominate the market.
In this blog, I explore the four key pillars of a successful retail media program, taking into consideration the real-life obstacles retailers face when setting up their media strategy.
But first, let’s address the challenges…
The shift to publishing as a new business model necessitates a unique set of skills and perspectives that retailers rarely have in-house. Retailers must overcome the complexity of managing diverse ad inventory, predicting future customer behavior and demonstrating robust attribution and measurement capabilities across multiple channels.
We are also witnessing a notable shift in the control game — retailers traditionally wielding significant influence over suppliers as the clients, shaping a brand's voice within their digital channels. Power is shifting to brands as retailers ask them to allocate substantial investments in an increasingly competitive market against the risk of potentially diminishing returns and slowing down innovation.
Technological and organisational challenges make things even more complex. Integrating disparate technologies and platforms into a cohesive ecosystem proves challenging, particularly without a unified end-to-end solution. Also, orchestrating the development of a retail media business unit within the existing organisational structure requires strategic alignment, protection and integration with the overarching company vision.
As Helen Brown, Retail Media Acceleration Lead at Kellogg’s says: "You need to have a tech ecosystem that powers as much of that end-to-end process as possible, because it gives you the ability to pull all your insight into one place. Having a joined-up platform, which serves as much media as possible, means it’s all measured in the same way, and you get real-time reporting, which enables you to optimise in-flight. Having multiple platforms power multiple different channels within retail media doesn’t allow you to do any of that.”
The key pillars for success
The path to triumph in retail media begins with a comprehensive strategy that aligns the retailer's vision with user and stakeholder expectations. Mapping these needs against technology capabilities aids in the identification of partner collaborations, whether through best-in-breed platforms or custom development initiatives.
A strong emphasis on integration emerges as a critical component. Leveraging the expertise of engineering partners streamlines integrations, enhancing efficiency and ensuring compatibility with existing corporate systems. To realise a truly integrated team, a blend of business experts, product managers and engineering resources is necessary to drive strategy, refine processes and deliver results.
- Building a strategic foundation: Understand the retailer's evolving ambitions through insights and conversations. Engage both internal (commercial, operations, data science, creative production, etc.) and external (agencies, brands) stakeholders to shape your strategy. This initial step sets the direction and scope for your retail media operation.
- Mapping functionality & technology: Ensure the selected technology solutions align with current and future desired functionality. Blend best-in-breed platforms with custom development. Choose partnerships wisely, focusing on areas that are commoditised and consider building intellectual property for differentiation. Robust technology forms the backbone for revenue scaling.
- Integrated ecosystems: Collaborate with expert engineering partners for seamless system integration. Integration extends beyond the technical realm to solving unforeseen problems within your corporate systems. This collaboration minimises the need for constant team expansion and manual work, enabling effective scaling.
- Delivering as an integrated team: Form a diverse delivery team comprising business experts, product managers and engineers. Leverage their skills to identify challenges, design business cases, and manage operations. Utilise a consultative approach to ensure a scalable and structured product architecture. Evaluate your team's capabilities and decide whether hiring or partnering is necessary to bridge any skill gaps.
By adhering to these four pillars, retailers can establish a robust and successful retail media programme.
The journey to establish a robust retail media business is replete with challenges, yet the rewards are substantial. As retailers navigate this transformative landscape, the integration of technological innovation, strategic partnerships, and a responsive organisational framework are indispensable. By embracing these principles, retailers can position themselves at the forefront of the retail media revolution, capitalising on a promising future where innovation and adaptation reign supreme.
Gain insights on the key challenges and deep dive into the 4 pillars of a successful retail media business by reading EPAM Continuum's white paper here.
Posted on: Monday 11 September 2023