In-Store Retail Media in 2024: Hype or Happening?

People have been shopping in stores for centuries. Trading posts, shops, markets, boutiques, chain stores. People like to look at items inside a structure, squeezing, sniffing, touching, browsing, comparing and ultimately choosing items to take home. Despite the surge in ecommerce, more than 80% of shopping is still done in-person. In-store remains a key frontier, capturing a massive audience. This is why I strongly believe in the inevitable rise of in-store retail media. Retailers are integrating digital media, from eye-catching TV walls to informative kiosks, and engaging shoppers with audio as they browse. It's not a matter of if in-store retail media will go mainstream, but when. Let's discuss the timing and how brands can prepare, because you do still have some time, thankfully. Bring home the hardware first We can talk about walls and kiosks all day, but one fact remains: Digitized surfaces for advertising in retail spaces are currently limited due to the expense of hardware and the challenges of installation. The cost includes not only the screens but also the necessary wiring and store upgrades. Most stores were not designed with the foresight for future digital installations. While there are solutions to minimize disruption, they come at a price and require careful implementation. How Instacart Moved Beyond Groceries to Become a Retail Media Power Once hardware is addressed, the next hurdle is software. While programmatic platforms are readily available, concerns about measurement, privacy and maintenance become cost factors. The takeaway here for both the retailer and the advertiser is that the most frictionless entry into in-store retail media is through audio. Audio streaming advertising is a great first test as it doesn’t require new hardware and can utilize existing systems (“Cleanup in aisle 2, please.”) There will still be measurement and maintenance to figure out, but the barrier to entry is much lower on the audio front than the visual one for now. Given the margins that the average retail media network is reporting to the market (north of 40%), one could surmise that the next investment back into retail media (after investments in measurement, of course) would be this very hardware. And with that, we get catapulted into a multibillion-dollar opportunity and a change in the future of retail as we know it today. Understand shopper acceptance So, as a brand marketer, you’re probably wondering whether shoppers will embrace this new form of marketing. Research by the Path to Purchase Institute and eMarketer indicates that consumers are generally open to digital signage and interactive displays. A Mood Media survey found that 80% of consumers believe audio and visual experiences enhance their shopping journeys. Brands' concern is not whether shoppers will embrace this new marketing form. The challenge lies in retailers striking the right balance between being informative and intrusive based on their shopper profile. For instance, screens on cooler doors in a convenience store may be perceived as intrusive by shoppers aiming for a quick visit, potentially damaging brand perception. On the other hand, parents at a big-box retailer may appreciate the convenience of scanning a QR code for a coupon at-shelf or checking product availability before opening a door. But it’s not just about today’s shopper. Generation Alpha needs to be top of mind, too. Their influence is significant in today's buying decisions, thanks to changes in millennial parenting styles. This collaboration signals a shift in in-store expectations as a more diverse, internet-savvy shopping demographic takes over. One thing is certain: The current screenless experience won't capture their interest. They'll seek information beyond taglines and nutritional panels. The logical future scenario involves delivering information directly at the shelf rather than relying on shoppers to look it up on their devices. Brands and in-store retail media today While some 9-year-olds already wield smartphones linked to their parents' Apple Pay account, the prevailing in-store shopping experience is still influenced by boomer and Generation X shoppers. They remember rain checks and the frustration of calling multiple Toys R Us stores to find a sold-out Tickle Me Elmo. Today, these demographics continue to shape the in-store experience, gradually warming up to modern tactics. While the current landscape may seem hyped, the reality is that the shift is imminent. So, how can a brand prepare to learn and test in-store media early on, ensuring that the future isn't a surprise? Here are a few options: In-store audio: Streaming audio in the aisles isn’t yet a closed loop like podcast streaming, but it's worth exploring. Sampling programs: Kroger and Walmart are standing up programs where they add samples to pick-up or delivery orders, which have tracking to understand who got the samples, and if or when they later purchased that product. Standalone kiosks: Like Freeosk, these kiosks collect loyalty data in exchange for a free sample. Ulta and Wakefern are recent examples In-store screens: Like Grocery TV and Cooler Screens, these can range from screens at the store entrance to full-length cooler doors and endcaps. What are you testing, and why? Your decision to explore in-store media while the technology is evolving should be driven by hypotheses, contributing to trade agreements or joint business plans. Consider incorporating this into your 2024 planning as the industry's rapid evolution, despite screen-related challenges, makes it a relevant line item for your testing fund. Want People in Your Stores? Create a Connection, Not Just a Product Being an early mover offers numerous advantages. Experimental pricing is often more affordable, feedback is more likely to be integrated, and you increase your chances of participating in other beta programs. Additionally, being among the first to showcase these units ensures a memorable impact. On the contrary, delaying and then having to play catch-up isn't beneficial. Waiting too long results in higher costs, scarcer inventory and a learning curve at an increased expense. Late movers face challenges in determining what works and managing time constraints on execution. It's not just hype; it's happening.

Retail Media Networks

In-Store Retail Media in 2024: Hype or Happening?

Being an early mover can be advantageous for brands

Elizabeth Marsten

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Elizabeth Marsten