Retail media presents retailers in the region with immense economic opportunity. But to unlock its full potential, retailers need to look at retail media as more than just an additional revenue stream.  

To capitalise on retail media’s potential for the long haul, businesses in Asia Pacific (APAC) need to lean on best practices including finding the right partners, addressing fragmentation within the ecosystem, and leaning on technology such as AI to drive the future of sponsored product advertising.

Every paradigm shift requires relooking at the value proposition, key measurements and overall business potential – and retail media is no different.

MartechAsia recentlyhad the opportunity to tap into the thought leadership and insights into the global retail media landscape in a Q&A with Melanie Zimmermann, General Manager of Global Retail Media, Criteo.

There are a few main drivers for the increased interest and investment in retail media. The first and most obvious one is the growth of e-commerce both globally and in APAC. As online purchases surge, marketing dollars have shifted to the channels where consumers are actively spending their time. Retail media allows advertisers to reach consumers at a crucial time – right when they’re considering a purchase. This offers a higher chance of influencing their decision compared to traditional advertising channels.

Another driver is the depreciation of third-party cookies, which is changing the way digital advertising targeting has been historically done. Advertisers are increasingly looking for new ways to access highly relevant customer data, and retail media offers a powerful solution for brands to reach potential customers with privacy-safe, first-party data.

Moreover, retail media is more than just an additional revenue stream, it is a full-funnel value proposition. Brands recognize that if they can balance the ad revenue generation with their core business objectives, they can deliver a positive experience to their consumers, helping them discover new products. With retail media, retailers are also becoming more like marketplaces such as Amazon or Walmart, where advertisers can reach larger audiences and enhance their marketing capabilities.

With their deep understanding of consumers’ shopping and purchasing behavior, retailers are now some of the most data-rich media owners out there. They are also able to tap into valuable first-party data and authentication to deliver these ad experiences, with closed-loop measurement to demonstrate campaign results. It’s essentially bringing traditional shopper marketing strategies online while opening a new, high-margin revenue stream. In addition, retail media goes beyond retailers’ own content walls. Offsite advertising allows them to extend their reach across the open internet, attracting and retaining targeted consumers beyond their existing customer base.

According to Forrester, one-quarter of retailers are generating more than $100 million in revenue from their media networks, indicating a tremendous opportunity for growth. With profit as a key goal of businesses, retail media presents an additional avenue to attain this goal outside of sales while still elevating key business objectives, like increasing brand recognition, sales, and site traffic.

What are some lessons learned from early retail media success in the US, and how can these translate into best practices for APAC retailers?

MZ: A key lesson that APAC retailers should consider is broadening their retail media measurement approach. They should look beyond metrics like return on ad spend (ROAS) and consider the full spectrum of benefits that retail media can bring. Our latest study, which analyzed data from 44,000+ retail media campaigns and survey results from brand leaders around the world, found numerous benefits beyond ROAS that retail media delivers.

One key benefit is a significant uplift in brand loyalty and customer lifetime value. Our data shows that users who interact with retail media ads are more likely to become repeat buyers. On average, shoppers who make a purchase prompted by an ad continue to buy from the brand five more times over the next six months. Globally, 51% of brands see improved shopper loyalty from their retail media campaigns.

Retail media also shapes positive online conversations through targeted messaging, real-time engagement, and loyalty programs. These strategies encourage shoppers to share their positive experiences via product reviews and on social media, reinforcing a brand’s social proof and influencing other shoppers’ purchasing decisions.

Furthermore, our data shows that retail media is an effective strategy for achieving consistent incrementality results. For example, US brands that conducted incrementality tests with sponsored product ads achieved a +428% incremental return on investment.

These benefits show that focusing solely on ROAS and sales provides a narrow view of campaign success. By considering full-funnel metrics such as impressions, cost per acquisition, and repeat sales, brands gain a more holistic understanding of their campaign success. Sales-focused strategies may also prioritize short-term gains at the expense of long-term growth. Metrics such as social proof and share of sales help advertisers cultivate positive brand sentiments and more enduring customer relationships. APAC retailers can learn from these insights and consider putting in place diverse measurements to pinpoint underperforming areas and readjust accordingly to ensure effective budget allocation.

What are some trends you observe in retail media, especially in this era of AI?

MZ: Retail media is undergoing substantial change, driven by advancements in AI. A key trend is the rise of AI in sponsored product advertising. It plays a pivotal role in enhancing product visibility across the shopping journey, from identifying optimal ads for customer engagement to maximizing click-through rates to drive revenue growth. Retailers frequently rely on partners such as Criteo for cutting-edge AI-driven bidding solutions, which are indispensable in today’s fiercely competitive advertising environment. Recently, we were honored with a win in the AI – Advertising category at the SBR Technology Excellence Awards 2024, highlighting our significant contributions to transforming the advertising landscape.

Speaking of partnerships, the shift from endemic (partnering with brands that sell their products directly though the retailer’s platform) to non-endemic partnerships (partnering with brands that don’t sell directly on the retailer’s platform) also presents significant hurdles for retailers. Managing these relationships often requires specific skills that many retailers underestimate. Retailers often rely on Criteo for their proficiency in navigating these complex partnerships and understanding their unique dynamics. This support encourages retailers to be more open to engaging with a wide range of partners, ultimately fostering stronger collaborations.

Moreover, retail media strategies have also evolved beyond on-site advertisements, extending to off-site channels. According to a recent Criteo survey, 56% of brands and 47% of agencies are currently investing in retail media both onsite and offsite. Additionally, 50% of retailers globally say offsite will be a key area of growth for retail media. Retailers are extending their reach to premium websites across the web, broadening product awareness and influencing purchase decisions. Personalized display and video campaigns bring customers back to the retailer’s site, creating a seamless omnichannel experience. Our data shows that shoppers who are exposed to both onsite and offsite ads are five times more likely to convert on the retailer’s site, compared to those who only saw a sponsored ad.

Please share some examples of retailers in APAC who are successfully capitalising on the next frontier of retail media, and explain briefly how choosing the right technologies and partners makes a key difference.

MZ: It’s remarkable to witness the success of numerous forward-thinking retailers across APAC in adopting retail media.

In Australia, Criteo powers the online component of David Jones’ retail media arm, David Jones Amplify™, enabling brands to launch targeted campaigns directly on DavidJones.com. This collaboration boosts product visibility and sales by leveraging David Jones’ first-party point-of-sale data and Criteo’s AI-driven platform. Brands can now align advertising with specific SKU-level sales outcomes across various devices and channels, empowering them to confidently reinvest in proven media strategies.

Similarly in Japan, Welcia implemented Criteo’s Retail Media solution on its official online shopping site, Welcia.com, empowering both Welcia and brands to leverage first-party data in their campaigns. Criteo’s Retail Media solution provides an end-to-end platform for placing personalized ads on both Welcia.com and external sites, ensuring effective reach and engagement. Additionally, our robust data analysis and reporting provided visibility into campaign performance, assisting Welcia and its brand advertisers in meeting sales targets.

These successful collaborations underscore the significance of seamlessly integrating advanced technologies and nurturing strong industry partnerships.

With over 8 years of experience powering retail media platforms, Criteo has helped more than 200 retailers with their retail media strategies, including a significant portion of the top retailers in the US and EMEA. This vast network connects Criteo with over 2,700 brands, generating approximately US$304 million in Activated Media Spend in Q1 2024 with robust year-on-year growth.

This proves that enhancing the partnership between retailers and brands is essential. The right partner empowers retailers to offer brands increased product visibility through display and sponsored product ads while giving them control through an accessible platform. This provides a win-win-win scenario, boosting sales, ROI and overall customer experience for all parties involved.

With the right partnerships in place, we can unlock the full potential of retail media, offering omnichannel capabilities that adapt to consumer needs and effectively navigate the rapidly evolving retail media market.

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