What is a Retail Media Network?

The marketing and advertising industry is a fast-paced industry.

With technology evolving rapidly, people have found it more convenient to do their shopping and other transactions online.

With digital interactions overtaking in-person activities, this shift in people’s lifestyles means one thing for businesses — they need to pivot fast. Failure to do so can only lead to losing customers.

Enter retail media networks.

With more and more people shopping online, retail media just makes sense.

But what exactly is a retail media network?

A retail media network is when retailers set up an advertising platform on their website, app, or other digital platforms within their network. This allows the store, and other brands, to advertise to customers on sites like CVS or Walgreens. It’s a form of in-store advertising in a digital format.

Here’s an example from CVS’s homepage. Notice the “sponsored” tag in the bottom right corner — this isn’t just a product listing; it’s an ad from a face mask company right on CVS’s website.

Ads on retail media networks can be displayed on many pages, including:

The home page
Category page
Search page
Product detail page

This enables advertisers to reach shoppers at the various stages of their buyer journey.

The reason retail media works so well is that shoppers are more receptive to ads when shopping than when they’re carrying out other non-shopping related activities.

Pros and Cons of Retail Media

Retail media is changing the way shoppers and brands interact. But is this new form of advertising and marketing a good thing or not?

Well, let’s take a look at the pros and cons of retail media and find out.

Pros of Retail Media

We’ll start by looking at the advantages of retail media and breaking them down according to the players involved.

For Retailers

The most significant advantage of retail media for retailers is that it creates a new revenue stream. Advertising is big business, and a retail media network enables retailers to tap into this $560 billion industry.

Profit margins on consumer packaged goods (CPG) have taken a tumble in the past few years. The revenue generated by retail media has been a lifeline for retailers looking to boost their profits.

Retailers that leverage retail media have become the new media moguls, thanks to the rise of e-commerce. This has opened up a new world of possibilities in how they can generate revenue.

For Consumers

Shoppers also benefit from retail media in a few ways.

The first benefit is it offers better price control for customers. With retailers generating revenue from ads, they won’t be as quick to raise their prices. An increase in pricing could result in a drop in traffic, spiraling into reduced ad revenue.

Secondly, retail media benefits shoppers by offering a better customer experience (CX). Sure, ads can be annoying. But if done well, they can help shoppers make better purchase decisions. They can also remind shoppers about related products they may want.