The worlds biggest retailers and brands hit Las Vegas recently for the annual ShopTalk expo. Zitcha's chief revenue officer, Nick Hinsley, was there and writes despite the small local contingent, the future of retail media and its implications for Aussie retailers could not be more profound.
Everything is bigger in Sin City and this year’s ShopTalk, where the world’s biggest retailers, brands and tech giants gather was no exception. More than 27,000 delegates descended on the Mandalay in Las Vegas and one topic was prescient.
My third trip in as many years to one of the world’s biggest retail expos and it was clear a seismic shift is underway. While in previous years customer data platforms (CDPs), headless commerce and personalisation were key themes, this year, alongside generative AI, was dominated by the exponential rise of retail media and retail media networks.
And that’s for good reason. BCG predicts the retail media market will reach US$100bn by 2026 - and that’s just in the US. In Australia, Morgan Stanley estimates the retail media category will hit $2.8bn by 2027, growing at 23% a year - so there’s a lot at stake for both retailers and brands.
What was very obvious this year was that all three key components of retail media - onsite, offsite, and in-store - were given equal weight. Previously all the talk was centered around onsite, with in-store retail media not being given much attention. Not this year and the reason is obvious. The shift reflects a broader trend in the retail industry, where retailers and brands increasingly recognise the power and impact of omnichannel retail media to drive customer engagement and sales while boosting incremental retailer revenue.
From keynotes to exhibitors, it was evident that the industry in the US is now finally embracing the power of leveraging physical retail spaces for advertising.
With so much focus on retail media, which will only continue to grow at future ShopTalks, there were key themes that emerged which have implications for Australian retailers and brands as they build or expand their retail media networks.
Emphasis on the customer journey
The industry's gaze is shifting towards a more holistic understanding of retail media. No longer is it merely about selling ad space; there is a newfound emphasis on the retail aspect, with a focus on customer-centricity and retailer enablement. Retail giant Costco encapsulated this sentiment, highlighting the importance of prioritising the customer journey over channel-specific activations. Retailers must focus on delivering value to customers rather than just selling media.
Objective-based measurement
Traditional metrics like return on advertising spend (ROAS) are no longer sufficient. Retailers need to focus on objective-based measurement, whether it's share of household, total sales, or incremental ROAS. By aligning measurement with business objectives, retailers can better evaluate the effectiveness of their retail media strategies.
In-store retail media opportunities: Australian retailers have a unique opportunity to leverage in-store retail media to a greater extent than their US counterparts. With fewer stores compared to the US, Australian retailers can more easily deploy digital screens, instore audio and other in-store media solutions to enhance the shopping experience for consumers and provide more targeted and relevant brand advertising.
Need for media expertise
Retailers must recognise that retail media requires a different skill set than traditional retail operations. While they may excel in retail-specific expertise, they may lack the media expertise needed to fully capitalise on retail media opportunities. Partnering with media experts can help bridge this gap and maximise the impact of retail media networks.
While standardised measurement remains elusive, and did not get a significant airing at ShopTalk, the dialogue around meaningful metrics is starting to gain traction – it’s a conversation that Australian retailers need to watch closely.
While the Aussie contingent at ShopTalk was smaller than expected, the insights gleaned were invaluable and the implications profound. There’s still a long way to go in Australia, but as we know, the opportunities and revenue generating power of retail media can not be ignored.