Retail Media’s Growing Influence on Marketing Strategy
Retailers sit at the epicenter of a transformation happening across the marketing community – especially as brands seek to navigate shifting purchase behaviors. In an 84.51° survey, 52% of shoppers reported switching to a lower-cost brand more often.
Today, retailers are being sought out to help brands understand their categories, measure media investments and influence purchase behaviors.
Nowhere was this trend more evident than at the Cannes Lions International Festival of Creativity, premier global marketing event, this past summer. Alongside major digital media and advertising agency holding companies, retailers had a significant presence, including Kroger Precision Marketing.
[RELATED: Kroger Is on a Mission to Power Future of Retail Media]
Why such an influx of retailers at an international advertising event? Because global brands need retailers to help transform the underperforming digital media industry. The Association of National Advertisers has found that $23 billion in annual programmatic advertising is wasted. Retailers have the experience, toolsets and motivation to make digital advertising more effective.
To demonstrate this, we hosted a series of panel conversations with 23 brand and media leaders about the most urgent topics in media. From those discussions, five key themes on ways that retail media is shaping marketing strategy emerged:
- Retail media enables audience-first planning. Shopping behaviors unveil lifestyles, aspirations and life stages more meaningfully than traditional marketing demographics alone. At Kroger, we’ve done side-by-side comparisons using retail data sets versus standard third-party advertising audiences. We found that retail audiences can deliver the same sales impact of standard digital programmatic audience practices – but with 51% fewer impressions and 40% higher lifetime value. That media efficiency is a strong motivator for brands to shift ad strategies toward retail audiences.
- Retail media powers streaming TV capabilities. The global CTV (connected TV) ad market is expected to account for 40% of TV advertising by 2026. Precision audience segments derived from retailers – combined with high-quality TV experiences – are driving new opportunities for growth and innovation. In a study of 100 CTV campaigns using our retail audiences, media sales uplift was almost 6% and median household uplift was more than 8%. Retailers are rapidly becoming a trusted bridge into addressable CTV platforms, creating more relevant branding and more cohesive storytelling.
- Retail media is breaking down the silos between brand and shopper marketing teams. The walls that once separated brand-building and sales activation efforts aren’t as rigid as they used to be. Retail insights are becoming an important lever for both brand-building and sales tactics. A recent regression analysis by our team showed that every $1 dollar invested in on-site retail advertising correlated to $14 of total store sales. With that kind of impact, brands and agencies are evolving their planning processes to deploy retail insights more holistically across their entire marketing funnels.
- Retail media is enabling new growth strategies for brands. Forget the trope that retail media only reaches existing buyers. Selecting households for growth potential is a key benefit of retail media. In a study of thousands of on-site campaigns at Kroger, more than 75% of display impressions and clicks were from new-to-brand shoppers. By using retail insights, brands are identifying growth prospects and driving meaningful impact. It’s increasingly crucial for all media investments to be held accountable for delivering growth.
- Retail media is improving the broader media ecosystem for brands – and even for the planet. Inaccurate advertising audiences waste budgets – and burn excess carbon. Conversely, precision purchase-based audiences help brands buy fewer – more relevant – ad impressions. In a benchmark study we unveiled at Cannes, we found that using retail audiences in programmatic advertising resulted in a 37% lower carbon cost than the U.S. benchmark. Retailers can truly shape a healthier and more sustainable digital ecosystem for all.
In this new era of marketing, the vision is clear: Retail insights lead to better consumer experiences. As retailers continue to occupy a central role in the evolving media landscape, their purchase signals help brands and agencies plan smarter, break down traditional silos, and create more meaningful connections with consumers.
As this transformation unfolds, retail media will remain a powerful force, driving innovation and leading the charge toward a more responsible and impactful digital ecosystem.
