More and more retailers are jumping feet-first into the fast-growing space that is retail media.
From retailers launching new propositions and partnerships to the expansion of established programmes to predictions of soaring revenue, there always seems to be something big taking place. But retailers who want to enter into retail media for the first time may be at a loss as to how to begin – and once they’ve got a foothold, how to stay competitive.
We spoke to Mark Williamson, SVP Client Strategy & Development at retail media platform CitrusAd, who has a long background of working in retail media both on the retailer side and now on the technology side. He gave us his thoughts on how retailers should approach retail media and on the question of in-housing versus outsourcing, as well as his views on the growth of retail media and how to keep it going.
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“Over time, more and more [retailers] will be able to do retail media on their own”
In his role as SVP Client Strategy & Development, Williamson works with both retailers who are new to retail media and those who are existing clients, helping them to launch or grow their retail media proposition. He emphasises that “every retailer has their own culture, their own personality”, but many of their challenges are familiar; from integrating retail media with merchandising, operations, or ecommerce teams, to getting the wider organisation on board with retail media.
“So, I end up spending a lot of time with retailers on their strategy for retail media in general – sometimes in ways that don’t really have a lot to do with our technology platform, or with our sales services … We can’t really help them until they’re ready as an organisation to fully embrace what retail media is, and so that’s where I find myself in most cases.”
“I’ve fought all those fights, and that’s my comfort zone,” says Williamson, who came to CitrusAd from a role at Peapod Digital Labs, where he was responsible for retail media partnerships with CPGs across the local brands of Ahold Delhaize USA.
“I’m a big believer that retailers will continue to develop their own resources, their own talent, and their own expertise internally – and over time, more and more of them will be able to do retail media on their own,” he says.
“So, the idea of a full-service retail media agency – we’re moving away from that, not toward that. And at the end of the day, what they need is really good technology. They need expertise in how to make buying media on a retail platform seamless.”
CitrusAd’s partnership model means that it can act as a service partner and run a retail media programme for retailers, or it can be a SaaS partner and enable retailers to run their own programme. “Understanding and having a flexible partnership model is, as a retailer, what I would look for,” Williamson says. “Not all retailers want to go all-in – or they’re not prepared to go all-in, so in a lot of cases we end up being a bridge to a future that they want.
“In some cases, we know we’re working ourselves out of a job,” he adds, candidly. “But that’s the role we play. We’re really trying to straddle that line between a partner that runs your programme and a consultant that tells you what you should do.”
Williamson believes that retailers should not outsource their retail media programme totally: “When I first started in retail media, I would find someone to outsource my business to, and we would negotiate how much of the money I got to keep … That’s not a winning model any more; you’re never going to drive organisational change if you outsource everything. You’ve gotta have some skin in the game.”
However, he notes that a pure consulting model also won’t give retailers the hands-on expertise that they need from people who understand how to navigate the challenges of retail media.
“We’re trying to find that sweet spot between just being a practitioner or just being a consultant, and helping a retailer grow the way that they need to grow,” he concludes.
“Retailers are going to have to keep this ‘adapt or die’ mentality going”
Retail media is enjoying rapid growth, and by all accounts, this growth is expected to continue into the foreseeable future. Insider Intelligence has predicted that US retail media ad spend will increase by 25.8% to $51.36 billion in 2023, and a further 19.3% to reach $61.15 billion by 2024. Meanwhile, the Internet Advertising Bureau (IAB) estimates that the UK retail media market will reach £7.9 billion by 2026, a level that the search advertising market only recently reached after more than two decades.
But are these predictions overly optimistic, especially given the ongoing economic recession and cost of living crisis? After all, all this spend has to come from somewhere. How confident is Williamson in the ability of retail media to live up to expectations?
“All the predictions of retail media spend growth – I believe all of them,” he says. “As long as retailers continue to be bold and put these solutions in place, and are able to deliver the advertising solutions that that money is attached to, I think we can exceed the spend amounts – but it’s going to require continued evolution.
“Brands are saying, ‘We’ll spend the money’ – but retailers have to say, ‘We’ll help you spend the money.’ … The demand is there, the understanding is there, now [we need to] continue to build the infrastructure, the solutions, the ways of working that will allow that money to continue to grow.”
Based on this, does Williamson believe that the growth opportunity for retail media lies more in improving supply than increasing demand?
“There’s still some maturation, there’s some standardisation that needs to happen on the buying side, but to me the opportunity’s still on the supply side,” Williamson agrees. “Amazon has not stopped evolving; Walmart has reinvented itself three or four times in the last decade; and that’s going to continue to happen.
“Retailers are going to have to keep this ‘adapt or die’ mentality going, because they’re going to have to create more and more supply.”
Williamson also believes that the success of titans like Amazon is good news for retail media as a whole, in that it shows that the overall retail media pie is growing, rather than it taking place at the expense of other retail media players.
“A rising tide lifts all ships – I get excited when Amazon reports big numbers. I make no money off Amazon, [but] I’m not threatened by Amazon growth; I’m not threatened by Walmart growth. What it means is more and more brands are moving more and more money into retail media, and what that does is it continues to raise the ceiling for other retailers.
“I think every retailer is entitled to their fair share – I would never tell a retailer, ‘Don’t do retail media’,” he goes on. “I might say, ‘Temper your expectations, because you only have this many customers, this many site impressions; this is what we see as your headroom.’ But everyone has a chance for their fair share; and so much of that is driven by the success of the big players in retail media.
“Someday, it’s possible that we’ll start fighting with each other for money – but I don’t think Amazon or Walmart are taking money away from other retailers. I think that money is coming from legacy forms of media; maybe unaddressable ones, ones that aren’t closed loop, ones that aren’t performing well.
“And it’s flowing to retailers because they have great first-party data, they have a workaround with third-party cookie deprecation; the media channels themselves are starting to act like media properties should – they’re addressable, they’re dynamic, they’re automated, they’re measurable – and so, right now, I think we’re still in this phase where all retail media succeeds together.”
I would never tell a retailer, ‘Don’t do retail media’. I might say, ‘Temper your expectations’ … but everyone has a chance for their fair share.”
How brands can help drive retail media growth
Williamson adds that by being very specific about what their expectations are for retail media, brands can incentivise retailers to continue evolving their propositions and thereby unlock spend, in the same way that the growth and development of shopper marketing was driven in large part by brands who bought into it by creating shopper marketing teams and dedicated shopper marketing strategies.
“As long as brands are spending, and they’re increasing that spend in reaction to retailers increasing their capabilities, that’s what’s going to continue to drive the growth,” he says. “For brands, I’d say the same thing that I’d say for retailers – know what you want to be when you grow up, [and] know what you want out of retail media. Have an idea of what your KPIs are, and clearly communicate that to retailers, and be consistent with it.”
While CitrusAd does the majority of its work with retailers, it does also sell to brands, and so it interacts with both sides of the retail media equation. Williamson’s advice to brands who are unsure where to begin with retail media is: “Engage on retail media; don’t ignore it, don’t roll your eyes when it comes up. Say, ‘Cool, let’s talk about retail media: these are the things that we want to see; this is what will unlock spend.’
“It seems like, as retailers ratchet up the capabilities, the brands are ratcheting up the spend, and as long as that continues … that’s going to create a nice, virtuous cycle of great supply, great demand.”
I ask whether Williamson sees that virtuous cycle taking place even amidst the current economic uncertainty – are brands not pulling back on spend?
“In an economic pullback, smart brands are going to spend,” Williamson points out – echoing advice from many a savvy marketing thinker. “That’s when you build brand loyalty; you don’t go dark. That’s when you fight for market share, is in a recession.
“If you don’t want to lose market share, you’ve got to stay top of mind; you’ve got to stay top of shelf; this is your opportunity to demonstrate why your product is worth the extra 40 cents. So, [brands] should be more engaged especially with retail media. This is where retailers have to get very good at their story, and say, ‘I understand why you’ve got to pull back on marketing; here’s why it shouldn’t be in retail media.’”
Williamson believes that “we are just scratching the surface” of retail media and its growth and potential: “The UK and US are fairly mature at this point, and I think [in those markets] it’s about continued reinvention and resetting and making sure the business case is there – but we’re seeing a lot of incoming inquiries in geographies where retail media is still new.
“Globally, there’s no shortage of growth in so many huge markets – that’s what gets us really excited. There’s a lot of talent to develop, there’s a lot of technology to integrate, and a lot of really media-rich and exciting marketplaces.”