The 8 Elements of Building & Scaling a Retail Media Business
Retail media presents a huge opportunity for retailers to achieve a new, high-margin revenue stream. Forrester predicts that retail media market will reach $85 billion by 2026.
However, many obstacles still exist within organizations hoping to build out a retail media business. Challenges such as complexity around integration with legacy systems, concerns around disruption of the shopper journey and internal culture lags — to mention a few — will create doubt around the value of retail media.
To help avoid internal constraints around your retail media proposition, Diana Abebrese, Global Retail Media Lead at EPAM, developed a list of eight steps to take into consideration when planning your retail media strategy.
Being able to articulate a compelling, comprehensive vision of the value retail media will bring to your company is essential for executive buy in. Let’s now go deeper into each element of the process. Note: These initiatives will generally need to be developed concurrently.
Retail media business units typically touch multiple stakeholder and business functions. Agreeing where retail media sits within the business is the first challenge — is it marketing, eCommerce, trading or a standalone business unit? Aligning on objectives, roadmaps, structure, ways of working and reporting comes next. The key element to focus on include:
- Organizational structure: Who will own the P&L?
- Stakeholder mapping: Who should you engage with and what will be their major considerations?
- Team: How will your retail media team be structured?
- Skills: What skillsets are needed to run a media business? Do they already exist in the business?
- Operations: Do you outsource the media sales operation or bring it in house?
- Remuneration: How do you remunerate the sales team? Are you comfortable paying sales commissions?
- Change Management: How are you asking the business to change and what's in it for them?
A robust revenue plan is needed to create a business case to justify any asks from the business. It should cover financials, structure and resourcing, technology investment, changes in business rules and ways of working.
- How will you protect existing monetization activity via trading or, say, third parties?
- How can you scale incremental revenue?
- Considering revenue sources, how will you leverage supplier/trading relationships?
- Which brands and agencies will you work with?
- How about non-endemic revenue sources?
- How will you ensure the value of media assets and inventory will deliver to the revenue plan?
Retailers may already have several monetizable assets in place but turning them into a viable media proposition can take time. Start with an audit of your existing assets, identify gaps and then create a three-year proposition roadmap.
- Media channels:
- What channels do you already have in place?
- What do you need to develop?
- Where can you partner?
- How do you package existing assets?
- Which channels are owned and operated by your organization and which ones belong to a third party?
- What is the profitability of each channel?
- Are the placements industry standard?
- What is expected from the market around pricing models, targeting, messaging, and reporting?
- How do you deliver an omni-channel, full-funnel integrated proposition?
- What metrics/KPIs should be in place?
- Customer experience:
- How do you balance revenue growth with customer experience?
- What business rules should you consider implementing to protect customer experience?
You will undoubtedly need to surround yourself with a strong partner network to support the business. Explore your partnership options around:
- Outsourced media sales and account management
- Tech and data partners
- Media partners
You should define a framework for partner selection and onboarding, a skeleton RFP and establish a team to support.
Business Process Optimization
Typically, the end-to-end campaign and business processes will touch multiple internal teams and third parties. Each team may have their own platforms, templates and requirements. Scaling a retail media business relies on streamlined and standardized ways of working.
- Map the current processes, touchpoints and hand-offs
- Identify manual processes which should be automated
- Document data flows at each stage of the process
- Automate through triggers, business rules and status updates
Customer Data & Targeting Strategy
Retail media is built upon a foundation of first-party customer data to enable accurate campaign targeting, media planning and relevant customer messaging. Understanding and managing your customer data is critical. Here are a few considerations:
- What are the data inputs and outputs needed at each stage of the process?
- What data is available (at the customer, product/category or campaign level)?
- What are you allowed to share, as opposed to what should you share?
- Which targeting and reporting capabilities and processes must you offer?
There are multiple ways to build and operate a media business with pros and cons to each model. Be sure to look at:
- Direct vs. programmatic media sales
- Managed vs. self-service sales model
- Walled garden vs. independent open AdTech platform
Scaling revenue is virtually impossible without a robust tech platform to underpin the business. Every retailer has different requirements and there is no off-the-shelf platform that will meet all the needs of an individual retailer. The smart approach is to design the end-to-end ecosystem based on the required functionality and then decide which elements should be bought or built. To build such an ecosystem, you will need to address:
- Process automation
- Data structure and modeling
- Streamlined data flow cross platform
- Custom user experience for both internal and external users
- Buy vs. build for key elements
- Custom and standard integrations
- Data privacy and security needs
- Data and reporting outputs
Making Your Retail Media Platform Real
There is no right or wrong approach regarding retail media. The planning will depend on the size of your business, how it is structured, key stakeholders and the business objectives of each individual organization.
Building a retail media platform is a complicated undertaking. Whether you’re starting from scratch or looking to scale, you’ll benefit from accessing exclusive content from Diana Abebrese and our other experts. Sign up now.