Ecommerce.co.za

Retail media transforming retailers into a $180bn ad machine

by Zak Haeri: Managing Director at NIQ South Africa.
Over the year to come, we can expect the rise of retail media networks (RMNs) to rapidly reshape how brands in South Africa sell and market to the consumer. RMNs, which are already massive in the US and many other parts of the world, are set to explode as more local retailers look for ways to drive revenue growth and improve their margins.

The concept of RMNs isn’t new, but the digital age has significantly transformed their scope and impact. Several years ago, international players like Amazon and Walmart recognised that the vast amounts of data they have gathered from online shoppers offered lucrative monetisation opportunities. They have used their access to data about customer references, purchasing behaviour and shopping habits to transform themselves into B2B ad powerhouses.

Amazon alone earned a staggering $46.9 billion in 2023 from sponsored ads on its site. A recent report by Coresight Research forecast that the global retail media market will total $179.5 billion in 2025, representing robust year-over-year growth of 15.4%. South African retailers Takealot, Checkers and Pick n Pay are on board with the trend, already successfully monetising product placement ads on their apps, websites or in-store digital signage.

So, what’s behind the growth of retail media?

One of the most compelling advantages of RMNs is that they offer brand partners the ability to use retailers’ first-party data to reach their customers. This data is arguably even richer, more specific and more relevant than the data available through programmatic platforms. It includes information about browsing behaviour, purchase history and even real-time shopping patterns.

Compared to third-party data, which can be fragmented and less reliable, first-party data provides a clear and comprehensive view of the consumer. It’s a good fit for a marketing environment where many marketers and businesses have moved on from third-party cookies, even with Google’s U-turn about phasing out cookies in the Chrome browser. Brands such as FMCG or consumer electronics manufacturers can use this data to create highly targeted and personalised advertising campaigns.

Furthermore, RMNs seamlessly integrate ads into the shopping experience. By featuring their products prominently in the retail environment, brands can get customer attention and guide them toward making a purchase. Native advertising within these networks means that promotional content feels organic and aligned with the user experience. This strategy significantly enhances engagement, as consumers are more likely to interact with ads that blend naturally into the platform.

RMNs also give brands the ability to measure performance accurately and optimise their strategies. Their analytics tools provide brands with deep insights into campaign effectiveness. From click-through rates to conversion tracking, these metrics empower brands to refine their strategies continually and play an important part in digital shelf measurement.

In an age where consumer behaviour is increasingly shaped by online interactions, RMNs represent a gateway for brands to connect meaningfully with their target audience. Each manufacturer and distributor will need to carefully consider whether RMNs fit into their marketing mix how to maximise their investment across RMNs, focusing on those that offer the best return on ad spend (ROAS) and organic visibility.

Useful resources:
NIQ
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