Revenue growth with retail media networks

Q: Can you explain why there’s such a significant buzz around retail media networks?

Many retailers are finding that the new revenue stream found in retail media networks is essential for profitability in the age of inflation. The financial gain is significant. In-store digital media ad spending in the U.S. is projected to more than double: from $430 million in 2025 to over $1 billion by 2029.

When compared to slim margins on grocery or commodity goods, retail media margins can be north of 80%. With critical mass, willing media buyers and a 25% per year projected annual growth rate into the foreseeable future, it becomes clear why Retail Media Networks are an essential source of revenue in the retail ecosystem.

Q: When considering growing revenue from monetizing media or ad networks, many retailers’ thoughts turn online. What are additional monetization opportunities?

Retail media networks break into four primary engagement categories — online, mobile, in-store and CTV/streaming. While many retailers have established a profitable presence in their online and mobile customer retail media platforms, in-store remains a challenging environment. The fourth category, CTV/streaming, isn’t considered as “new” or “untested” as it used to be now that brands are seeing measurable results. The IAB reports U.S. CTV ad spending will reach $26.6 billion by the end of 2025.

Understanding and overcoming challenges with in-store retail media networks

Q: Can you break down some of the challenges that are specific to in-store networks?

STRATACACHE has been working with retailers to create, support and optimize in-store media networks for more than 25 years. In today’s current retail environment, we’ve found that there are six major barriers that most in-store retailers face:

• Failure to understand how in-store retail media is a completely new marketing opportunity and the ways that it as a channel works across the marketing funnel
• Lack of key infrastructure (power and data) to deploy media platforms in-store
• Lack of tools to measure and optimize the effectiveness of in-store ad placements
• Overworked and understaffed IT team members who don’t have time or budgets to help or simply don’t fully understand the unique capabilities and opportunities of RMNs
• Lack of available capital to fund the deployment of technology at scale to reach the critical mass needed to deploy a successful RMN
• Failure to understand the strategic and tactical differences between OOH (out of home) and merchant-focused retail media networks

Understanding and working through these challenges opens up a revenue stream that can’t be overlooked, and working with a knowledgeable technology partner is a critical part of the puzzle. With over 25 years of experience STRATACACHE has facilitated more than $5 billion merchant media network sales. Through our retail partnerships, we assist in the successful deployment, operation and optimization of major global retailers’ retail media networks.

Key considerations and advanced opportunities with in-store media networks

Q: What are some of the key factors that in-store retail media network providers should be able to guide brands through?

As a leading digital signage and digital solutions provider, STRATACACHE helps guide major retail brands through all considerations of an optimized network, from where to put digital signage to gain highest visibility, to financial models and engagement with creative teams. Here are a handful of topics to take into account:

• Determine ideal placement of in-store media experiences to maximize returns
• Provide strategy guidance and insights on successful peer or competitive retail executions
• Model CP/M, product engaged and endemic vs. non-endemic financial models
• Integrate in-store media to your merchant programs for joint success vs. competition with category merchants
• Prepare an engaged creative strategy balancing retail, brand, audience and engagement messaging
• Utilize in-store measurement data (dwell time, likelihood to see, sales data) and analytics to gauge success and optimize campaigns 
• Engage with retailer and brand creative agencies to ensure a consistent media update strategy

Q: STRATACACHE delivers “smart” digital signage. What are some advanced opportunities with retail media networks?

Our digital signage is a step ahead as far as advanced capability, using a combination of digital display, AI and sensor systems to be able to react to audiences and shoppers in real time, truly personalizing the in-store visit. Just as online retailers and ecommerce tailor content to website visitors, this can be applied to in-store retail media networks as well.

• Deliver advanced sensors (wireless and computer vision) to track engagement and conversion
• Deploy artificial intelligence to optimally target shoppers for sales conversion of promoted items
• Build audience profile data for real time in-store targeting
• Evaluate and optimize for dedicated selling vs. programmatic media platforms based on audience
• Track individual customers and their journeys via opt-in loyalty participation
• Report, profile and track shopper interest to re-target on CTV/OTT/streaming

Q: Beyond traditional digital signage, what are some additional formats or solutions retailers should consider deploying and monetizing media networks?

Retailers can execute network monetization on a wide scope of digital solutions, with multiple types of experiences across the retail estate. This includes:

• Outdoor digital billboards
• Outdoor – on-building digital billboards
• Digital window activations
• Entryway large-format and spectacular displays
• Digital shelf edge displays
• Digital end cap
• Precisely tracked physical carts and baskets
• Freezer/cooler digital displays
• Interactive guided selling experiences
• Wayfinders and product locators
• Departmental digital displays
• Micro-targeted product or service digital menu boards
• Optimized queue management and service delivery displays
• Assisted and self-checkout digital displays
• Financing your network

Q: There is of course an up-front expense required to spin up a solid retail media network. How do you suggest retailers accomplish this?

At a high level, a full solution provider should be able to walk through options and opportunities here — capital financing for the entire project rollout, advise on brand partnerships to get the network up and running, or best practices for self-funding.

Q: On the IT/operations side of the business, what are some additional factors that come into play when getting internal teams working together on a successful network?

• Project manage and deploy all power, data, network infrastructure and technology
• Enable Day 2 Field Service and Support
• Deliver 24×7 Media Network Operations, Management and Reporting
• Provide dedicated, retailer specific, Advertising Sales platforms without Ad Fees
• Bridge surplus inventory to Programmatic Exchanges
• Assist with sales training and execution of Merchant Focused Retail Media Networks
• Creating and supporting your retail media network

Q: What process or approach has STRATACACHE developed to create, deploy, manage and support retail media networks?

The STRATACACHE method helps a retailer deploy a professional, profitable and sustainable merchant empowered retail media network that delivers substantial incremental media revenue with fast deployment timelines, no upfront capital, no ongoing high media royalty or percentage participation fees, turnkey operations and support with both U.S.-based and U.K.-based services teams with decades of experience supporting millions of digital screens around the globe.

To dive deeper into the common mistakes retailers face when building in-store media networks — and how to avoid them — download our white paper, The Seven Deadly Sins of In-Store Retail Media.