[Dossier] The new era of retail media

At the heart of the digital ecosystem, digital media is unaware of the crisis. E-commerce explodes (130 billion euros in 2021), acclaimed by the French in the last two years and the online advertising market is overwhelmed by this economic dynamic. “Slowed to a lesser extent in 2020, from 2021 the market regains its pre-Covid momentum with a growth of 29% compared to 2019”, announces the Revenue Agency. The numbers of 27And The e-pub Observatory, produced by Oliver Wyman for SRI and Udecam, records good overall health with a rebound in all digital advertising levers in 2021, with an increase of 24% compared to 2020 or 7.7 billion euros of revenues.

Retail average up 42%

The retail media market as a whole, which mainly includes display advertising on e-commerce sites and sponsorship of results on their search engines, has experienced a 42% increase in revenues compared to 2020. The increase in advertising revenues of merchant sites is even 69%, compared to 2019. Out of a total of 640 million euros, 62% or 395 million are achieved through retail search (+ 56%) (revenues from sponsored links in the search engines of retailer sites) and 38% or 245 million euros via display (+ 25%) (classic, video and OPS formats sold by players on stocks). Thereby, retail search now accounts for 12% of search.

“The growth of retail media is driven by the consolidation of the market with the formation of partnerships between the main players, the launch of platforms, the increase in programmatic sales and the appearance of new advertising formats”

“The growth of retail media is driven by the consolidation of the market with the creation of partnerships between the main players, the launch of platforms, the increase in programmatic sales and the appearance of new advertising formats”, details Sylvia Tassan Toffola, president of SRI. The strength of retail media is to be closer to the act of purchase. This leverage allows ecommerce brands and large retailers to monetize their audiences and brands to increase sales through customer targeting.

On the consumer side, the advantages of this new medium guarantee advertising included in the customer experience and in the purchase path. The advertising that appears is targeted, geolocated with the best promotion. For the user, this technology does not harm their experience and does not lower the conversion rate.

On the brand side, one of the great advantages of this mechanism is that the advertising paid for by the brand is based on the retailer’s data to increase its visibility through a privileged location on the website or on mobile. This is targeted advertising for the benefit of a brand on articles referenced on the merchant’s site. “It’s a bit like the gondola in the shop ends up generating brand preferences”, commented Geoffroy Martin, EVP & General Manager, Growth Portfolio at Criteo, a leading player in the targeted advertising market.

Market structure

Retail media, which account for 8% of digital advertising in France, are generating growing interest. This new form of advertising marketing, already established across the Atlantic – $ 40 billion in the US by 2024 (according to eMarketer) – is driving distributors to forming strategic alliances and advertising agencies to structure themselves to meet the demands of their clients in terms of media plan. Havas (Ad to Basket) and Publicis (Epsilon) have just made colossal investments to compete in this thriving market.

“For brands, retail media make it possible to reach a wide audience, without resorting to third-party cookies and directly linking advertising spending to sales results”

“For brands, retail media allow them to reach a wide audience, without the use of third-party cookies and directly linking advertising spend to sales results. Also, in the digital age, brands are more vulnerable to security concerns. It offers a safe and adequate place for online advertising investments. It is a virtuous ecosystem that helps bring value to brands, promote a better offer for customers and monetize site traffic and data “, decrypts Geoffroy Martin. On the retailer side, 2021 saw the development of unified platforms, which can be used independently, capable of linking media investment to sales and measuring the business impact of an advertising activation, both in digital and in store. These new solutions are provided by players such as Carrefour Links, Infinity Advertising, Conso Régie, Critéo, Cdiscount Advertising, Amazon Advertising and MyRetalink (managed by Fnac-Darty). “Retail media is a safe haven for brands where the key to growth lies with the consumer,” explains Alexandra Suire, director of Retailink (Fnac-Darty management).

Carrefour’s European ambitions

In June 2021, Elodie Perthuisot, Executive Director of E-commerce, Data and Digital Transformation of the Carrefour Group announced the launch of Carrefour Links: “The retail media market is growing strongly in all of our geographies. Carrefour is already a pioneer in this booming market as its retail media business in France grew by more than 50% in 2020” . Carrefour wishes to develop its market share in this business based on a customization strategy for its offer. The distributor’s latest results, published in mid-February 2022, indicate a 20% growth in food e-commerce activity and the retail media platform has more than 150 industrial partners at the end of December. “It is generating very promising initial results”, indicates the group. Carrefour has set itself the goal of being the European leader in data media and retail and expects this business to generate € 200 million of additional current operating income (COI) in 2026 compared to 2021.

In a context of digital acceleration within the group (2.8 billion digital investments in 5 years as part of the Carrefour 2022 plan), the retailer has launched this new business, focused on the analysis of “first party” data. brand (navigation and transaction data). “On the one hand, we know that 80% of our customers – increasingly omnichannel – expect personalized offers and, on the other hand, we see that brands want to reach consumers more effectively through digital marketing. Carrefour Links responds to these expectations “, says the spokesperson for the group. To bring this new offering to market, the brand partnered with three technology partners: Criteo (ad targeting), Google (cloud) and LiveRamp (data protected). The strength of the strike is real: 80 million families around the world buy from Carrefour every year and its food e-commerce site is the traffic leader in France. “Carrefour’s solution combines all advertising formats with an open ecosystem. Therefore, advertisers can carry out a cross-retailer campaign through a single platform that allows them to aggregate data and have a global view of the performance of their advertising operations “, claims Criteo, a technology partner.

The answer from Casino and Intermarché

The Casino group and Intermarché also take a position in the same context by launching “Infinity Advertising”. This structure, (5 brands and 17 million inserts), chaired by Jérôme Sabatié, member of Intermarché, is managed by Alban Schleuniger, of “RelevanC”, a subsidiary of the Casino group positioned on. This new player is emerging in a very favorable context for campaigns on merchant sites. With the explosion of food e-commerce during confinement, the digital advertising market has gained 3 years in 6 months. “E-commerce sites have become important crossroads of audience with some of them reaching 18 million unique visitors per month. This is an opportunity for brands. We propose to activate onsite levers (sponsored search and display on the website of the brand) but also offsite (addressing the consumer on digital) “, explains Alban Schleuniger, CEO of Infinity Advertising. Thus, throughout its digital journey, a customer in possession of one of the group’s loyalty cards can be solicited by more effective targeted advertising. “We offer brands, by analyzing customer navigation, to know if push advertising has affected their shopping cart. The interest of retail media is to measure the return on investment”, supports the DG.

Guaranteed efficiency

Faced with Carrefour, Links, Infinity Advertising’s offer exceeds 24% of the PDM, or 17 million inserts on the sites of complementary brands such as Intermarché, Monoprix, Franprix, Casino and Hypermarché Géant and 41.5% on the drive in France. “In addition, we have two types of offers and a one-stop shop, a unified offer, for brands with the guarantee of reaching one in four consumers. Our offer is a point of contact, a single billing and a budget of a unified campaign. . In a very fragmented and still young market, we simplify access to these campaigns for advertisers or media agencies without having to add partners. It is an answer with a simple, powerful and precise solution in front of Gafa on first party data “, continues Alban Schleuniger.

Another key player in positioning itself in the retail media is the Fnac-Darty group, which launched its platform called “MyRetalink” in September 2021. Usable independently, this omnichannel data sharing and digital media activation solution allows brands to better control their marketing strategies and customers of both brands to enjoy experiences that are more individualized and more consistent with their changing needs. “This platform is for everyone, from the sales manager to the media trader. A supplier can, for example, very easily identify a loss of momentum in its sales, a risk of out-of-stock before launching a campaign. A trader can identify his goals by easily navigating through more than 200 predefined audiences before his activations, optimize his purchases in real time and measure their omnichannel impact “, underlines Alexandra Suire, Director of Retailink at Fnac Darty.

Challenges to overcome

While retail media is being driven by increased sales of programmatic spaces and the success of new advertising formats such as live shopping, the market remains dominated by Google, Meta and Amazon, which hold a 67% market share in digital advertising in France. To favor a rebalancing of digital investments, advertisers must be reassured on the transparency and reliability of the solutions, but also on the profitability of their investments. Finally, the collection and use of data (browsing and purchasing information) remain more strategic than ever for retailers. Those who have undertaken the battle look to 2022 with growth prospects for the digital advertising market estimated at around 9 billion (+ 18% VS 2021), demonstrating an acceleration of post Covid growth.

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