Personalized Retail Media: Your shortcut to success in the future of e-commerce

This blogpost is written in collaboration with our partner Vertica.

Retail Media is undoubtedly a hot topic right now—and for good reason. More and more major e-commerce players are adopting retail media as a new business avenue and are already reporting positive results.

But what exactly is retail media, you ask?

Many e-commerce multi-brand stores (digital shops selling products from various brands and suppliers) have thousands of products on their "shelves." Traditionally, the brands and suppliers have reaped branding value and revenue by selling their products through these webshops.

With retail media, however, we flip the script and ask: What if we change the business model? What if we create a revenue stream for the retailer by allowing brands and suppliers to pay for having their products highlighted on the shopping platform?

Say you’re a shoe store...

Let’s take an example. On your e-commerce site, you sell shoes from various suppliers and brands, offering a large selection of everything from boots to sandals.

When a customer searches for shoes on your site, they land on a product landing page (PLP) and are presented with page after page of results matching their query. Typically, these pages are ranked by factors like the date added or keyword matching.

For your suppliers, however, this means they could easily end up at the bottom of the page. Maybe even on page two. Or page 28, if it’s really bad—because there are so many products, and the competition is fierce. And with it, frustration grows for the supplier.

You can compare it to the experience in a physical store. As a brand, you'd want your shoes to be in the front display, not in the corner or on the big wall with all the other brands.

This is where retail media comes into play.

So, what changes to my store does retail media bring?

With a tool like Relewise Retail Media, you can—using an example like the one above—offer individual brands a premium placement where their shoes appear first on the search results page. This placement can be purchased through an auction, where the price is set by the highest bid among the interested brands. Whether they get the premium placement or not depends on how much they are willing to pay—and how many others are in the bidding.

The result?

Brands and suppliers get greater visibility and higher conversion rates, while your business gains a new revenue stream.

Once the cookie crumbles, you’ll need to bake your own cake

You might be left with some questions, such as: Do suppliers really buy into the concept? Many will, yes.

In fact, a study by IAB Europe shows that a full 91% of advertisers (suppliers) consider retail media to be a crucial part of their future advertising strategy. Why? Because we’re heading into a future without third-party cookies.

And with the elimination of third-party cookies, the landscape for digital advertising changes significantly, as does the experience for advertisers who typically use digital channels.

When (and if) third-party cookies disappear completely, advertisers will lose an important method for tracking users across different websites. It will therefore become much harder to understand customer behavior or preferences and create relevant ad content. Likewise, it may become harder to target and track the effectiveness of digital ads run on traditional digital advertising platforms.

However, many e-commerce multi-brand stores hold large amounts of first-party data on their users. This is highly relevant because the right collection and analysis of first-party customer data can be the key to regaining an understanding of your audience, their preferences, and behavior. These are insights that you can use to target advertising on your site!

In this way, as a retailer, you become both a source of valuable insights for suppliers, and your webshop becomes a channel with great potential for highly targeted promotions based on first-party data.

And this is where a well-structured retail media setup can truly give you a strong offering to your suppliers.

Not only can you say more about your visitors and their behavior, but you also give your suppliers access to effective exposure to a relevant audience at a critical moment in the buying journey—namely in the final phases.

Personalization is at the heart of retail media

Retail media isn’t just beneficial for you as an e-commerce business or for your suppliers. It can also contribute to better customer experiences.

Today’s consumers are constantly bombarded with ads both online and offline in their everyday lives. Much of the content doesn’t speak directly to them or fails to hit them at the right time when the message or product is relevant.

In other words: they’re oversaturated with exposure, and the threshold for irrelevant ads has long been crossed.

When we say that retail media can positively impact your customer experiences, it’s because you can ensure that your customers are met with the right content when they visit your site.
By working with retail media, you can automate data collection and analysis, ensuring that all ads are personalized and only shown to the target audience when it’s relevant for them.

Customers therefore get a personalized ad experience that matches their behavior, preferences, and needs. And as an extra bonus, you ensure that your customers stay on the site—and aren’t scared away by poor promotions.

When the ads are relevant to customers, they are more likely to click or buy, which also leads to higher engagement and a better experience with you as the retailer.

Where should my retail media placements be?

The next question is: Where should I sell retail media on my site? Which placements make sense to offer to suppliers?

In short, it’s about selecting the specific placements that will be most effective for your product ads and deciding how many placements you want to make available. The most typical placements are on PLPs or search results pages on your website, but they can also be in your app, in emails, or on social media.

At the same time, it’s about only showing products that are situationally relevant in the sponsored placements. For example, if a customer searches for glasses, only glasses should be shown—not mugs.

Here, you can leverage the extensive product information combined with your access to detailed user data to ensure that the featured products and banners are only shown when they match the user’s specific situation. This guarantees relevance and maximizes the effectiveness of the ads.

How to get started

If you want to dive into the world of personalization and get the most out of retail media, here are a few good tips to help you get started:

Choose strategic placements for ads: Identify the most effective spots on your website for placing your ads. Typically, this includes PLPs and search results, but also consider placements in apps, emails, and other relevant channels to maximize visibility.
Ensure real-time relevance: Use data collection and analysis to ensure that your ads are always up-to-date and reflect the customer’s current preferences. By showing relevant ads that match user behavior and interests, the likelihood of clicks and purchases increases significantly.
Keep your suppliers informed: Regularly communicate with your suppliers about campaign performance and status. Give them insights into how their ads are performing and inform them of any changes in placements or bidding strategies. This ensures good collaboration and helps adjust the strategy to maximize effectiveness for all parties.