Retail media is having a moment. And according to a recent study by Insider Intelligence, physical stores are the next frontier. Here’s the catch, though: while it’s easy-ish to quantify the ROI of digital advertising, to date, it’s been almost impossible to understand the impact of in-store advertising.
And that’s a big problem. Because CPGs won’t throw budget at something they can’t measure.
In our comprehensive retail media guide – based on insights gathered from over 135,000 consumers – we delve into why in-store retail media networks are so valuable to brands, and the quantifiable impact to the bottom line.
Download the retail media guide
Here’s five quick takeaways from the report…
1 – Don’t call it a comeback; stores have been here for years…
Physical stores remain the dominant force in retail, comprising 80% of all shopping in the US and a significant portion globally. Reports of their demise appear to have been premature.
The resurgence of physical stores as a major media channel is driven by their ability to reach larger audiences than digital platforms – on average 70% bigger. Additionally, retail media presents new revenue opportunities for retailers facing margin-squeezing challenges. According to Reuters, profit margins for retail media sales can be as high as 90%. Yes…nine-zero.
2 – Retail media networks have never been so attractive for CPGs
The end of third-party cookies and increasing privacy regulations mean marketers are seeking alternative sources of data for targeting efforts.
Retail media networks, with access to valuable data accrued by retailers, emerge as attractive options for CPG marketers. In-store media proves to be a reliable investment, offering a shorter gap from awareness to purchase compared to digital advertising.
3 – Consumers seek out – and are influenced – by in-store advertising
Our survey reveals that in-store promotional advertising positively impacts the shopping experience for 68% of consumers.
Moreover, 43% actively seek out promotions before making a purchase, and 29% have made a purchase because of in-store promotional media. Tying performance data to financial spend is essential for a comprehensive understanding of retail media strategy effectiveness.
4 – Lo-fi in-store advertising is sometimes better than digital
Contrary to the belief that high-tech media formats are essential for success, our data suggests that traditional non-digital displays, free samples, and coupons are highly effective in influencing purchasing behavior.
In-store displays influence the purchase decisions of 47% of consumers, followed closely by free samples at 40%.
A balanced media strategy that considers the context and audience preferences is crucial for maximizing impact.
5 – Some consumers pay more attention to in-store ads than others
Demographic analysis reveals significant variations in consumer preferences for retail media.
Seniors are most influenced by in-store promotional material with 70% reporting its effectiveness.
On the other hand, Gen-Z and younger consumers trust online influencers more than traditional digital displays, with twice as many engaging with them compared to online adverts.
Tailoring media strategies to audience preferences ensures relevance and effectiveness.
