5 Retail Media Insights to Make Spirits Bright This Holiday Season

Evaluate your retail media strategies and ask yourself the tough questions so you can harness the power of digital to grow revenue.

Retail Media, advertising within retailer sites and apps, is on a collision course to shake up brand spending habits this holiday season. While Black Friday may seem far off, retail trends suggest customers have their holiday shopping lists in hand and have already started purchasing gifts.

Ecommerce holiday sales continue to grow at a white-hot rate — expected to climb 15.5% to $235.86 billion this year— but for the first time in a long time, there is a new toolset to help brands drive holiday success.

Retail Media is a juggernaut, with estimates predicting top brands will increase their RM spends by 25% per year to $100 billion over the next five years and will account for over 25% of total digital media spending by 2026. Currently, all top 10 U.S. Retailers have a Retail Media program, and an estimated 70% of all revenue from those Retailers is from brands spending in that Retailer’s media program.

Not bad for a tactic that didn’t exist outside of Amazon just 2-3 years ago.

Obviously, successfully navigating this new territory is critical to hitting holiday goals. But before October arrives, make sure you are asking yourself the tough questions so you can be confident that you have the right strategy to harness the power of Retail Media this Christmas.

If you’re lost or just need a little bit of guidance, MERGE is here to help. We’ve compiled five insights to help you navigate the evolving digital shelf landscape to run effective retail media campaigns.

1. Complement Promotions with Retail Media Campaigns.

   • Like the old adage says, ‘promotions improve conversion rate, but you still need to drive traffic.’ Sounds like a perfect fit where Retail Media can add some real value.
   • As you work to create the perfect promotional strategy, make sure you are crafting your Retail Media strategy to get the most visibility for your hot-ticket items.
   • One of the common mistakes we see brands make is to schedule the RM campaign to launch at the same time their promotion goes live. Instead, we recommend pushing the RM campaign live two weeks before the promotion to boost visibility, create product awareness and ramp up retargeting efforts.
   • In addition, we see brands succeed with using Retail Media to help test limited-time promotions before running them during critical sales periods.
   • • What We’re Seeing: We've seen explosive results when coupling a top-of-fold placement with just a 10-15% product discount. Interestingly, a modest 10-15% discount beat a 20% discount when the product was lower on the page.

2. Mine Performance Data To Uncover Product Listing Issues.

   • Simply put, there’s no reason to spend money if it's not converting. When we see campaigns that aren’t performing well, it can often indicate an underlying issue with the product listing that needs to be addressed.
   • One of the secret benefits of running a Retail Media program is the ability to gather data about which products need better descriptions, more differentiated imagery or more reviews.
   • When you start driving dedicated traffic through media, you’ll be able to see very quickly whether the product listing setup isn’t compelling enough to drive a profitable return.
   • Campaign issues can also indicate a product is using the wrong keyword strategy or is even placed in the wrong product category. There’s a lot a dedicated look at your RM data can tell you.
   • • What We’re Seeing: The long tail products are where this tactic really pays for itself. We’ve seen a 25% increase in revenue from long-forgotten products that helps drive overall brand growth.

3. Plan to Launch your Holiday, Black Friday or Cyber Monday Retail Media Campaigns Early.

   • MERGE's analysis of Prime Day indicates shoppers will try to get ahead of inflation by shopping earlier than ever this holiday season.
   • Early Retail Media campaigns will help drive sales through the direct-click attribution and benefit the organic rankings.
   • During the early holiday season, organic rankings are more easily manipulated by a smaller amount of sales velocity. As such, running RM campaigns earlier than usual can help gain share-of-shelf through small boosts of increased velocity.
   • Using Retail Media more strategically can help turn a small budget spend into a permanent revenue driver for the entire season.
   • • What We’re Seeing: Start increasing budgets in small increments as early as the first week of October and track both volumes and return on ad spend (ROAS). This holiday season will be different from any other we've seen. With the increased volume of shoppers during the holiday season, it is vital to keep a close eye on the data, pivot quickly to avoid unproductive spending and capitalize on opportunities.

4. Define Your Media Strategy Specifically For Specific Retailers.

   • Each retailer caters to a specific demographic, and our research shows customers shop retailers at different parts of the purchase funnel.
   • For example, shoppers might enjoy browsing at Walmart but want to make their purchase at Target. Likewise, some customers enjoy reading Best Buy’s reviews but prefer to purchase at Costco.
   • For these reasons, we strongly recommend you craft your media strategy unique to each retailer and their shopper behaviors.
   • What’s more, we recommend looking at different KPIs at different Retailers to understand the value of that media. Impressions on Target.com can sometimes be more valuable than clicks on Walmart.com if they are fueling your funnel in the correct way.
   • Every shopper uses every Retailer differently. Keep that in mind when planning your campaigns.
   • • What We’re Seeing: Testing campaigns to ensure they serve the right product mix and reach the right shoppers is a critical piece to seeing overall growth. Without it, we see the risk of cannibalization. We also see success by testing which retailers perform best with a value-first message, while others depend on lifestyle or competitive positioning to succeed.

5. Monitor Your Campaigns To Effectively Manage Inventory, Logistics And Shipping Times Heading Into Q4.

   • Inventory management has been a challenge for nearly two years, and while that has led to retailer innovations, it doesn't mean automated ad tech has caught up.
   • We’d all love to believe that our ads get automatically paused when inventory isn’t available, but that’s not always the case. We've seen too many instances where product ads are still being served even though the product is unavailable or when the size or colorway options are poor.
   • Again, this is the opportunity to use Retail Media data to help drive better business decisions.
   • It goes without saying that monitoring your ROAS will help you determine when to pause a product ad — either for inventory or performance issues — but it can also help inform you on where you have inventory, size or color issues and help inform your teams to take action.
   • • What We’re Seeing: Retail Media isn’t a “set it and forget it” tool. It requires constant monitoring. At MERGE, we create dozens of reports for our clients to quickly identify potential inventory concerns and related advertising opportunities. We also shop each retailer daily to ensure key advertising products are truly in-stock and your advertising dollars go toward products available for customers to purchase.

We hear this all the time; running Retail Media is simple but making it work is hard. That’s where we can help. If you are struggling with seeing success with Retail Media, let us know. We’re happy to take a look at what you are doing and offer our perspective.

Book a one-on-one session with us. There’s still time to make spirits bright this holiday season.