The accessibility of retail data in consumer targeting is a game changer for the communications and media industry. It helps us leverage real transactions and consumer behavior markers at the last line of defense, that is the purchase action.
Brand communications, media planning, and buying can be powered by deterministic data as opposed to probabilistic data, leaning our practice further towards the science end of the art vs science spectrum.
It puts the power back in the hands of the brand marketers and media planners, moving us towards a reality where every interaction between brands and people can be 100% addressable, 100% shoppable & 100% measurable.
For platform owners with valuable first-party retail data, with the industry being at a crucial inflection point of maturity and reliability, the reality of monetization as a retail media network (RMN) is well within reach.
E-commerce as a sales channel is now in a stable state and has enough data volume and maturity to offer reliable consumer behavior insights. In terms of a proof of concept, retail media networks are well established, as seen by the success of the e-commerce marketplace players like Amazon as well as established traditional and online retailers such as Walmart & Kroger's in the norther America. They have built profitable RMN business propositions & operating models – with inventory design, ad serving technology, self-serve mechanics & close-loop measurements focused on ROI KPIs.
In APAC, the opportunity landscape is shared by digital marketplaces like Carousell, Shopee and Lazada, mass market domestic-focused merchants like Fairprice in Singapore and commerce intermediaries and delivery providers like Uber, Grab and Foodpanda.
Although the current ‘walled garden’ nature of e-commerce RMNs camouflages their real revenue values, the projected size of prize for RMNs in Southeast Asia is pegged to be a covetable US$ 4.7B by 2030*. This combined with the growing intent of brand marketers (99% of those surveyed*) to include RMNs in their media plans and assign these channels a higher share of their marketing spends, augurs well to spur a significant number of RMNs to become available in the industry, following a T-shaped growth pattern.
This will likely unfold starting with the digital platform owners in vertical product categories and services. With highly valuable first-party data of unique audience segments who are deeply engaged and loyal to them – they will form the ‘stem’ of the ‘T’.
Omni-channel sellers, especially well-established grocery brands will follow suit to provide the spread in the T-shaped growth of RMNs that brand advertisers will demand. The hurdle to cross for their activation is the capture, organization & digitization of their retail 1PD data.
This perfect coming together of the demand side of retail media and the sell side via retail media networks, has this channel perfectly poised for high growth in APAC. The real future value of retail media will be in the way it interacts with existing digital media platforms and methodologies to re-shape farming techniques for consumer insights, and the standards it will set for dynamic planning and attribution of returns on advertising spends (ROAS).