What is a Retail Media Network?A retail media network (also known as retailer media network and RMN) is a retailer-owned network of media products. The network includes digital shelves, content, and platforms that brands can buy media on to obtain direct access to the retailer’s customers. You can also think of it as a general advertising strategy or model that retailers are using to generate closed-loop customer experiences and capture key data. RMNs need extensive digital infrastructure, planning, and maintenance. This is because they are endemic to the continuing shift towards more complex customer-centered marketing and business operations. RMNs are broad initiatives that can encompass disparate parts of an organization, including IT, media, advertising, marketing, and sales. For this reason, archetypical examples are those RMNs of large brands like Amazon, Walmart, and Instacart. The evolution of the retail media network is the industry recognizing that, while in-store retail shopping still has its place, any retailer who isn’t maximizing their online presence will be missing the majority of retail shoppers.
Understanding Traditional Retail MarketingTo fully understand the concept of a retail media network, consider the traditional way a brand would advertise within a retail setting. This usually involves leasing premium space within a store, such as an endcap or in-store signs. Advertising like this is effective but limited. There’s no personalization available, and essential customer data, such as who is buying what products most often, is left out of the equation. Endcaps work because they’re conveniently placed and hard to miss. The same principle applies to successful advertising on a digital platform.
Retail Media Networks Aren’t Just for Online ShoppingAn RMN is an update to traditional retail marketing principles that focuses on the digital presence of the company to compete with the convenience options available to today’s customers. The end goal of an RMN is to have a fully functioning, closed-loop advertising and purchasing platform that maximizes customer personalization and minimizes friction. This doesn’t mean that in-store retail shoppers are not a focus of an RMN. 56% of shoppers still like to visit a store before making online purchases. A retail media network can and should include ways for brands to advertise in stores and any outlet the retailer controls.
FAQ About Retail Media NetworksSome of the most frequent questions brand marketers have about RMNs are:
What is a Media Network?A media network is a network of media platforms that serve to reinforce and support one another, resulting in mutual growth. The “retail media networks” definition is flexible. In general, they share the following characteristics:
- A network of media offerings like digital shelves, social media postings, segmented customer data, and direct marketing opportunities.
- Directly managed by a retailer, or a company chosen by the retailer, where advertising space is sold to brands and manufacturers.
- Uses data generated to personalize advertising and shopper experiences.
- May appear on the retailer’s main website, but this is not a requirement.
- Some represent many retailers, so they are not branded with any single retailer name.
How Do Media Networks Work?Media networks function as digital real estate, sometimes spread across several sites, existing to bridge the gap between retailers, customers, and brands by creating new ways to advertise and shop online.
Why are Retail Media Networks Important?To keep it simple, RMNs are important because they are the way of the future. In fact, the U.S. digital retail media ad spending may reach $51 billion in 2023, from $40.81 billion in 2022. Any marketing, brand, or retail leader needs to understand the concept as well as how to leverage it or risk falling behind.
What is Amazon’s Retail Media Network Called?Amazon calls its retail media network Amazon Advertising. Their RMN is one of the largest in the world, boasting a base of nearly 200 million U.S. customers from which brands can draw data and use it to design products and marketing.
6 Key Reasons for the Rise of Retail Media NetworksIt’s a simple reality that more and more customers start their shopping journey online. Whether that’s researching new products, placing an order for in-store pickup, or taking advantage of free shipping, consumers are interacting with retailers and brands before heading in-store. Here are some of the benefits brands get from RMNs, or in other words, the key reasons why retail media networks are only going to grow.
Unpredictable Retail Operations
Closed Loop Data Attribution
Countering the Waning Effectiveness of Traditional Retail Marketing
Improved Brand and Supplier Relationships
Improved Customer Satisfaction