Getting retail media right: How to structure for success

A few years ago, a large part of my job in my former role at Meta was to convince marketers that social media was a worthwhile place to invest their budgets. Though it’s hard to imagine now, it wasn’t always an easy sell – but then a new, relatively early-stage concept for marketers with other, long-established media habits rarely is.

But now, just a few years later, the case for social media virtually makes itself, and it’s the task of other media to prove their impact and drive stronger results versus the validated, proven walled gardens of social media.

Retail media today stands at a similar point to social media just under a decade ago and faces exactly the same challenge: to prove, validate, and make sure the solutions we have built drive the results that we know they can.

It helps that retail media really works, and does something even the major tech platforms often lack the capability to do: robustly track offline sales against online and multichannel marketing – solving a fundamental challenge for FMCG marketers who have struggled for years to close that loop.

However, we recognize that retail media also represents a challenge for brands. Many FMCGs are large, legacy businesses with very established teams and practices, and retail media spans an overwhelming number of business functions, from media to shopper to digital, e-commerce, marketing, and more.

In reality, of course, retail media as we now know it is a more recent concept, containing elements of all of the above, which is why the number-one conversation I’ve had in the seven months I’ve been with Nectar360 involves a client saying: “I don’t know how to structure my teams for this.”

Every client we deal with is approaching retail media differently within their own existing marketing and media departments. That is entirely understandable because these companies are all well-structured for the world we knew - but not necessarily for the one that is with us now.

But given that we are all in the early stages of writing the book on retail media – and in view of our experiences and observations with a wide range of clients – we are in a unique position to talk through the common structural approaches that will help brands make the most of this exponential opportunity.

Approach #1: Leading with in-store

Retail media as a concept isn’t new. Numerous brands have well-established shopper teams to handle point-of-sale (PoS), with longstanding retailer relationships and highly efficient processes around messaging and activation. Consequently, a brand might easily be tempted to build its retail media function solely within its in-store team. However, starting from traditional in-store could mean a lower priority for deeper integrations with e-commerce, broader media, and digital in-store.

Approach #2: Leading with e-commerce

Spearheading retail media from inside the e-commerce team attacks the problem from the other side. E-commerce experts are digital specialists, immersed in metrics and optimization on a daily basis. But an FMCG e-commerce team can easily miss a broader insight, which is that, in the majority of categories, 85% of sales still happen physically in a store. So while an e-commerce specialist may be expert in optimizing the remaining 15%, a singular focus on online retail alone may prevent brands from maximizing the unique value of digital and offline combined – which, let’s not forget, allows them to meet the shopper wherever they browse and buy.

Moving in the right direction: Install a head of retail media

A smart approach is to build a centralized setup centered around a retail media specialist who can liaise with the shopper, e-commerce, and media teams and join the dots – and who can make all the difference between success and frustration.

Every brand that succeeds in retail media will need a marketer who recognizes the opportunity, upskills, and leans in. Some companies may have the right structure but are still in need of exactly the right person. Others might have a structure that shouldn’t work on paper, but which triumphs thanks to the skills and nuanced understanding of the person in charge. There is more than one route to success.

Our observation, however, is that a head of retail media needs autonomy, and a budget of their own, or at least a strong degree of influence over broader budgets, if they are to make their retail media initiatives come to life as they should. Otherwise, they may be seen as a consultant or simply a retail media advocate – effectively adding another layer of governance and complexity without giving retail media the freedom it needs to move fast and get real, business-building results.

Going to the next level: Build a broader structure

If a head of retail media has sufficient control, they are in a strong position to create a retail media-focused structure within the existing marketing, media, and agency framework. The agency connection is perhaps the most important here. Retail media is real media – indeed, as consultant Andrew Lipsman recently put it: “Retail media is the future of all media”. So, your media agency needs a very active voice, not only to consult and advise, but also to execute.

In this scenario – which is in our opinion the fastest and most efficient way to scale up retail media activity – media agencies take a critical role in pulling together disciplines, aligning goals, and building campaigns. They are the experts in media, after all, which is why brands work with them in the first place. But they, in turn, need to swiftly build and expand their own retail-media skillsets, and both brands and agencies need to create both a new dynamic and a careful sense of where lines are drawn.

Give yourself a break

As I said earlier, we are all still writing the early chapters of this book. Everyone’s building it as they go, learning on the job, seeing what works. No one, I can assure you, really feels like they have cracked it, and the global retail media landscape needs to evolve to level out across regions – for instance, as I’ve written elsewhere, the UK currently operates quite differently from the US.

What we know, as a loyalty, insights, and media services agency within a large retail group, is that when it comes to retail media, brands don’t want to be suppliers. They want a strategic partnership that stands on its own, like all the strongest true media relationships around the world, and in doing so delivers back on the promise retail media offers.

So let’s build the right models, and leverage the power of transactional data to answer all our business challenges. But let’s do it by learning together – and between us, we can define what great looks like.

Also published in: The Drum