An important consideration is the responsibility of retailers to implement clear policies and practices that prioritize data protection, privacy and ethical use.
Why AI Will Be a Game Changer
According to Artem Lavrinovich, chief data and product officer at Chicago-based Cooler Screens, the future of retail media lies in the strategic integration of innovative technology and data analytics, particularly through the application of AI. He expects customization and relevance in shopper experiences to grow, thanks to AI’s ability to analyze and leverage in-store shopping behavior.
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“This integration will continue to develop, enabling more dynamic and context-sensitive advertising that resonates more effectively with consumers,” says Lavrinovich.
While noting that AI and machine learning are not one-size-fits-all solutions, and often depend on the quality of their data, Nikhil Raj, chief business officer for retail media at Redwood City, Calif.-based commerce platform Moloco, asserts that both technologies can give companies the tools to understand consumer behavior and predict what they might do next in real time.
“By delivering the best experience to brand-new consumers, AI gives all companies who can use it the right way a competitive advantage,” he explains. “It can also help formulate creative assets to be highly personalized to the consumer and optimize campaigns, even midflight, to drive incremental sales.”
A Deeper Focus on Governance, Consumer Protection
An important consideration for the future of retail media is the responsibility of retailers to implement clear policies and practices that prioritize data protection, privacy and ethical use. Larkins believes that the industry as a whole is evolving to stay compliant, with closed-loop reporting revolutionizing the retail media space by introducing a data-driven approach that seamlessly integrates the entire advertising cycle.
“Brands are increasingly demanding accountability for their advertising spend, and retailers must be prepared to respond,” adds Larkins. “This shift is driving the development of new tools that improve measurement and combat ad fraud.”
Additionally, Lavrinovich notes that retailers must develop robust governance frameworks that clearly define the responsibilities and ethical boundaries in the use of both data and AI.
Moving forward on the consumer front, Larkins recommends that retailers use penetration testing to help uncover vulnerabilities that could potentially compromise customer data, since the onus falls on them to proactively safeguard consumer privacy. He also stresses the importance of vetting technology partners to make sure that they’re operating within compliance.
Turner, meanwhile, recommends maintaining policies that customers can easily understand and access, as well as maintaining an open dialog with those customers to help demystify data practices and show them that their privacy is a top priority.
“Reflecting on whether retailers are doing enough, there’s often room for improvement,” says Turner. “Many could improve their approach by simply showing customers the benefits of data usage. When consumers see that their data is used to tailor recommendations, such as personalized offers based on their previous purchases, they are likely to appreciate the personalized touch.”
He concludes: “This straightforward use of data not only meets legal standards, but also naturally builds trust and loyalty by demonstrating direct value to the consumers. Essentially, as long as the benefits are clear and the personalization is evident, customers will be satisfied with the data practices.”
The top retailers (including Walmart) and solution providers in grocery will be talking about innovations like retail media and much more at Progressive Grocer's annual GroceryTech event in Dallas on June 5-7. Click here for more information and to register now.