The already hot retail media sector has just increased the heat with news that Uber Advertising has launched in Australia – the first sales division outside the US. With data showing that takeaway food was the biggest category for consumer online retail spending, accounting for around 40 per cent of the $54.7 billion spent in online retail, the opportunity is obvious for Uber.

Uber is looking to help brands access new advertising opportunities across its mobility business – otherwise known as retail media. Uber and many other Australian retailers are sitting on a treasure trove of first-party audience data, essential to revenue, closed-loop attribution, not available on the programmatic open exchange. Which is why brands are lining up to gain access.

Australia’s retail media category is expected to top $1 billion by 2025 and this year hit $US50 billion globally.  In the US, retailers are already displacing some traditional publishers on media plans.

The rise of retailer media marketplaces

Faced with cost of living increases, a potential looming recession, supply chain issues and nervous consumers, having a retail media offering can realise incremental revenue growth as it can be applied to create opportunities for advertisers.

Like Uber, Cartology/Woolworths/Big W, Coles and Endeavour Group, retailers are seeing the value of their data and starting to develop new, high-margin revenue streams via retail media platforms, opening up access to their audience data and digital touchpoints to external brands.

Retailers are able to control and influence the consumer journey throughout the whole sales funnel, from consideration to purchase, using their first party data knowledge to influence and drive increased purchases. This also provides a solution to the pesky issue of a cookieless future, while better protecting consumer privacy.

The benefit to retailers is that they become their own media company using owned and operated channels but also offering on other platforms like traditional display, CTV, and digital out-of-home, offering premium inventory to brands with addressability and return on ad spend (ROAS).

While early movers are pulling ahead, many Australian retailers lack knowledge on how to start the process and have concerns about not having the tech infrastructure and privacy issues. So, let’s bust some myths.

Myth 1: Only the big guys can do it.

Not every retailer has the scale and resources of a Coles or Woolworths to build and operate their own retail media ecosystem, which includes off network media. For those smaller players, thanks to several technology firms focused on the retail space and the maturing technologies of curated marketplaces, it is also possible to develop sophisticated capabilities with little to no tech expertise. 

Retail media platforms empower retailers to develop a modern retail media business without the need to build their own tech stack. Curation allows them to package valuable first-party data and premium media into a single curated deal sold to brands programmatically across all major programmatic media buying platforms. 

Myth 2: Retailers need to have an inhouse ad tech or martech team to compete

Any retailer or ecommerce business with first party customer data can launch a retail media platform overnight without inhouse expertise by working with a tech partner that can deliver a curated marketplace.

The two key enhancements to retail media network concepts, offsite reach and programmatic access, also boost retail media networks’ value proposition for buyers. Brands can leverage retailers’ consumer insights to run effective advertising campaigns and even inform product development. Plus, the retail media model enables targeted transactions and closed-loop attribution without third-party cookies.

This is how it works: a soft drink brand goes to a supermarket with a brief of the customers it is trying to reach. The supermarket can mine its loyalty card data to build out the relevant audiences, which are uploaded into a curated platform. Those audiences are then overlaid on open internet inventory, packaged up and pushed into the soft drink brand’s demand-side platform (DSP) for trading. At the end of the campaign, the supermarket can determine how many of its customers bought the soft drink which is shared with the brand to understand its ROI.

Myth 3: Privacy and customer experience will be compromised by sharing retailers’ first party data

Retail media advertising relies on already opted-in first part consumer data, making it a privacy safe way to target consumers.

The mechanism for open internet curated marketplaces is a media product, not a data product, which allows the retailer to control their data assets, price them in custom ways, issue them only to trusted partners, and then control the media with which they package it. 

There are benefits that flow from this brand and privacy safe environment. Retailers can gain a competitive advantage by having closer relationships with brands that it stocks, and they can take a margin from brands for the use of their data.

Retail media can also enhance the customer experience with customers receiving data driven targeted offers based on their buying habits.

Retailers can safely monetise their data through curation, media agencies and brands can future-proof their media buying and drive performance, while curated marketplaces put privacy first.

As consumer increasingly turn to brands that delight with digital experiences and legacy targeting tools erode, the demand for curated retail marketplaces will exponentially grow – and possibly faster than previous predictions suggest. Latest PwC estimates suggest a total retailer media market of circa $2bn in Australia by 2026 based on mid-point forecasts, and nudging $3bn in its high growth scenario.

Keen to get ahead of the queue? Find out more: https://www.xandr.com/solutions/curate/