In Retail Media, one-size does not “fit all”

Joe Nguyen, Senior Strategic Advisor, H+

10 June 2024, Singapore

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“Retail Media” has been popping up in many conversations amongst brands, advertisers, agencies and the adtech ecosystem this year. In the US, it seems clear that retail media is Amazon and Walmart and how they are using their own data to help advertisers target consumers better. However, this definition belies and hides the original meaning of “retail media”, which is advertising media available within a retail environment – like a store or a supermarket. Amazon and Walmart have co-opted that phrase to include advertising on their own sites as well as finding their audience on third-party sites.    This is what we think of when we say “retail media” at the present, but, in Asia, the retail space and the ecommerce space are less dominated by companies like Amazon and Walmart. With such complex ecosystems across each country, that definition of “retail media” needs a rethink.

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Japan, with a large economy and advertising expenditure, has deployed its version of retail media. It’s a market with strong ecommerce retailers in Amazon and Rakuten, but the physical retailing is in the hands of many, many different retailers from convenience stores to department store chains. Advertising in physical stores have been in practice for years in Japan and is fairly mature. So “retail media” in Japan as seen from brands’ and advertising agencies’ perspective encompasses both online and in-store media. This is truer to the old definition of “retail media”, but it is not as easy to implement as one may think.

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Firstly, disparate physical retail shops owned by many retailers, franchisees and “mom-and-pop” independents make it difficult to streamline workflow to deliver physical advertising to these shops. Digital Out-of-Home (DOOH) is beginning to fill this gap and is prevalent in Japan, but much of the available inventory is not aggregated into an exchange or supply-side platform (SSP). Much of the rest of Asia is still developing DOOH solutions and faces the similar issue.

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Secondly, budgets for advertising and in-store promotions are not in the same bucket; they reside in different business units of a brand. Advertising on TV, print, radio, and online are the domain of the Marketing Departments whereas in-store advertisements belong to the Sales & Sales Promotion Departments as they work directly with distributors and physical stores. Both may sit under the Chief Marketing Officer, but rarely does the budget for advertising and in-store promotion sit within the hands of one brand manager. This makes any coordinated planning and execution more complicated.

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The next challenge is then executing a full retail media campaign. Budgets need to be aligned. Strategic plans need to cater to different types of advertising environment. Creatives need to complement the media environment as well. So after the brand decides to embark on retail media strategy, it needs to work with it advertising agency on all the above. However, advertising is normally in the hands of a media agency, whereas in-store promotions normally sit with below-the-line agencies. So there may need to be coordination between multiple agencies – creative, media and BTL.

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Last but not least, KPIs and ROIs need to be aligned. Traditional advertising is upper-to-mid funnel marketing with brand awareness, reach, and purchase consideration being measured for effectiveness. In-store promotions are closer to the point of sale so it is considered lower funnel and can be tied directly to sales lift performance. So with a full retail media campaign, how should effectiveness be measured? Attribution between branding effort and actual sales is still in early stages of development in many markets.

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These challenges are not unique to Japan alone as each market in APAC has its own complex retail and ecommerce ecosystems. Hakuhodo has established Retail Media One in Japan as the solution to work with advertisers and brands on retail media – out-of-store, in apps and also in-store. H+ takes its learning from Hakuhodo DY ONE’s retail media operations in Japan and extends it to other countries through “H+ Intelligence for Retail” and “H+ Intelligence for Brands”. These solutions are being launched in June at the NRF 2024: Retail's Big Show Asia Pacific. H+ Intelligence For Retail and Brands will encompass the best practices and experience in Japan and work with local ecosystems and partners in each country to help businesses expand.

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H+ Intelligence for Brands helps advertisers expand advertising within selling channels by integrating with various ecosystem partners. On the brand’s own ecommerce website, H+ agencies can develop and manage the website as well as the content to increase engagement with visitors. We also work with partners like Grab to enable online-to-offline (O2O) integrated marketing messages to further increase likelihood of purchase. H+ partners, Graas and AGL, helps brands manage and merchandise their shops in ecommerce marketplaces like Lazada and Shopee. Encompassing the above, we can manage a brand’s CDP and CRM in order to understand and nurture potential and existing consumers.

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H+ Intelligence for Retail was developed to help online retailers maximize their traffic and offer their own Retail Media solution as a new revenue stream. Our creative agencies have help retailer with UX design for their apps as well as managing its operations. We help with influencer and KOL marketing on Social Commerce and are developing live commerce capabilities. Working in consultation with iDAC, Shopstack and other partners, online retailers can develop their own retail media solutions to monetize the audience data they already have on hand. Aligning with the overall data strategy, the above can be integrated into a CDP and managed on their behalf by Antsomi, Audience IQ and other open sourced partners.

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H+’s open-sourced philosophy means that we not only integrate our own agencies across Asia for best practices, but we continuously look for and partner with other companies who have vertical expertise to help clients become successful. H+ Intelligence for Brands and for Retail are the latest developments harnessing that strategy. Recognizing the complex retail and ecommerce ecosystem in each country, H+ understands there is no ”one size fits all” retail media, but open sourced partnerships means that we can provide effective solutions that combine what clients are already doing with new technologies and platforms.

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