Retail Media Networks Transform Digital Marketing through Supply Side Techniques.

The retail industry is highly competitive, and media network platforms such as Walmart Connect and Target’s Roundel are gaining popularity as consumer expectations continue to change. Researchers from the University of Arkansas recently studied the rise of retail media networks (RMNs) and published a white paper on their findings. They also presented their work at the Plug and Play Supply Chain Expo in Bentonville, discussing the benefits of retailers and suppliers partnering on RMN advertising.

Brent Williams, a researcher and UA’s vice dean of strategy, explained that RMN involves retailers using their assets to reach consumers with personalized products that meet their needs. RMN creates an opportunity for brands to optimize their relationships with brands and consumers. Currently, approximately 600 retailers offer media networks to their suppliers, including Walmart Connect, Walgreens Ad Network, Target’s Roundel, Lowe’s One Roof Media, and Sam’s MAP. The RMN market is expected to exceed $50 billion in global revenue next year and is anticipated to make up 25% of total digital marketing spending by 2026.

The research conducted showed that retailers benefit from RMN since it provides an additional source of revenue that offsets the compression of margins that plagues the industry. RMN deepens customer connections, enabling brands and retailers to focus on the same customers in a strategic and personalized way, regardless of where they shop. Retailers are leveraging their 4,700 stores in the United States for in-store marketing, as most of their sales are still made in brick-and-mortar stores. Walmart is building new experiences such as demos, events, in-store screens, and interactive ways to engage with consumers.

The benefits of RMN are not limited to retailers, as suppliers can see direct returns on investment through targeted sales growth. The detailed data owned by retailers and suppliers powers targeted marketing based on consumer searches, shopping behavior, and purchases. This data allows retailers to better understand shoppers’ behavior because it is SKU or item-specific, person-specific, and location-specific, all the way down to the store level.

RMN’s full potential will give suppliers the opportunity to make dial-up and dial-down sales based on inventory and supply chain constraints, creating powerful demand shaping tools. Brands can optimize their investments in regions with sufficient inventory, increase sales, and save costs in stores with low inventory levels. However, researchers caution that accidents such as a 27-year-old consumer seeing a retirement benefit ad or a minor seeing an alcohol ad still occur occasionally. RMN has the potential to deliver improved revenues for retailers and a further boost for brands, but there are still issues to be resolved before RMN’s promise for brands and consumers is fully realized.

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