There are three ways we counsel retailer and brand clients to get realigned.
Embrace transparency
Instead of asking for an arbitrary investment from brands, retailers should provide clear recommendations on how many ad dollars a brand should spend—and that recommendation should be grounded in data that shows the brand what it stands to gain. Planning tools that look at factors like available reach for the target audience, observable demand, competitive share of voice, and digital shelf analytics can help rationalize the ask.
Retailers and brands have a long-term partnership; short-term business goals can shift focus away from what truly drives incremental sales. Transparency and alignment on what drives sales builds long-term trust.
Measure the right KPIs
Retailers should look beyond share-shift metrics to measure incremental growth in category sales.
Incrementality is what brands ultimately want to see from their investments—it’s part of how they judge success for advertising through any media partner. Our research shows that only 66% of brands clearly understand the KPIs their RMN partners report and can articulate what they mean to others in the business. Reporting that’s clear and easy to digest helps establish confidence in retail media investment across the brand organization.
Making the category pie bigger at a retailer is a way for both the retailer and brand to win, rather than just trying to make the brand’s slice larger.
Enhance the shopper’s journey
Retailers have more shopper data than ever, allowing them to create relevant experiences that drive interest and sales. Interactive in-store experiences, mobile engagement, and content-driven marketing (such as cooking podcasts or gamified promotions) can create genuine value for both brands and shoppers. Category growth will accelerate when RMNs offer more than ecommerce search, sponsored product ads, and programmatic audience extension.
The path forward
Retailers face immense pressure to compete with industry giants that have already established dominant advertising businesses. However, in their rush to build ad revenue, they must not jeopardize their crucial supplier relationships.
The most sustainable path forward is collaboration. Retailers and brands that work together to establish fair media investments and shopper-focused strategies will be best positioned for long-term success.
