In the evolving landscape of retail business, chains, including supermarkets, are perpetually in the quest for lucrative opportunities to spur growth and enhance profitability. A frontrunner in this innovation race is leveraging customer data, not just as a tool for internal improvements but as a product with immense market potential.
A Paradigm Shift in Retail Media
Traditionally, customer data served inward-facing functions, aiding retail businesses in understanding customer preferences and enhancing service delivery. However, this is no longer the case. Retail chains are acknowledging the untouched potential of elevating retail media to unprecedented levels by offering targeted marketing solutions both in-store and online to consumer goods companies, hence opening up new avenues for revenue.
Imagine walking into a supermarket and being greeted by in-store screens displaying ads curated based on the time of day or the prevailing weather conditions, or even personalized guidance and ads through an in-store mobile app. Additionally, online platforms can offer customers personalized ads and recommendations, creating a seamless and intuitive shopping experience.
To understand the gravity of this innovative venture, let’s take a leaf from Amazon’s book, which, according to BCG, accounted for two-thirds of US retail media in 2021 through the sale of sponsored products. Even more staggering is the gross margin for retail media, standing at a whopping 80% as compared to the 20% in grocery retail.
Leveraging Various Data Sources
The robustness of this approach is grounded in the meticulous gathering of data from various sources including data analytics operations such as transaction data, and loyalty schemes. The gradual phasing out of cross-website cookies has further escalated the value of the walled gardens of retailer’s sites and loyalty programs, making them gold mines of invaluable customer data.
Implementation: Crafting a Symbiotic Ecosystem
The implementation phase is pivotal, necessitating the creation of a data mesh integrated with APIs to organize data products, facilitating a seamless flow of insights and fostering ease of integration. These data products can be synthesized into data marts that amalgamate multiple relevant datasets while staunchly safeguarding data privacy and ensuring anonymity.
A modern data infrastructure, buttressed with state-of-the-art APIs, forms the backbone of this innovative venture, ensuring a harmonious integration of customer insights with ad targeting, mobile apps, and in-store systems.
Moreover, analytics and reporting become indispensable tools in this setup, not only in assessing market potential but also in fine-tuning the strategy to sell ads effectively.