Retail must reinvent to flourish in the new digital era, and monetizing high-traffic digital and physical properties is becoming increasingly important to achieve this.
The trends are clear: retail media is the fastest growing form of advertising spend, with global investment expected to reach $176billion by 2028, up from $114.4billion in 2022.1
It’s estimated that Walmart’s retail media business generated $3.19 billion in 2023,2 while in the UK, Tesco is so bullish that it’s tripling the number of digital ad screens in its stores during 2024.3
With a potential 5% to 10% increase in profits at stake, David Billings, VP Digital Marketing Solutions at EPAM Systems, believes that retailers need to move fast.
“Retailers need to move with urgency here,” he counsels, “and not just to grab profits today – it’s also important to establish market share early. In a year, the market will have matured, competitors will be more established and newer entrants will struggle to compete.”
Billings adds: “It’s not necessarily that difficult to launch a basic retail media network, but it’s more challenging to generate real advertiser value from your customer data and to build scalable underlying infrastructure – this is where we see retailers struggling.”
Complex ecosystem
As retailers race to add new channels and capabilities to meet supplier demands, they can quickly find themselves operating a complex ecosystem of third-party vendors that are poorly integrated with each other and existing corporate infrastructure.
These fragmented solutions result in complex manual processes, poor advertiser experiences and an inability to scale.
As Billings notes, “We often see retailers that have accrued a lot of technical and organizational debt. This constrains revenue growth and, with the wrong foundations in place, it’s hard to resolve – especially when you’re facing the pressure of running a demanding day-to-day business.”
The best way to develop the right foundation, he suggests, is to build an early view of the future requirements that you and your advertising partners will have when your business is operating at scale.
It’s likely that this vision will involve a single platform that integrates a flexible roster of third-party tools to provide an adaptable omnichannel offering.
Automation and AI will almost certainly play a role, as will the ability to derive value from large volumes of granular, sensitive customer data without shipping it to a host of external vendors.
With these requirements, it’s probable that your technology team will conclude that you need an orchestration layer built within your own cloud environment.
Until recently, designing and building this type of solution presented a technically daunting and expensive task for all but the most advanced and ambitious retailers.
That’s why EPAM has collaborated with Google Cloud to launch its Retail Media Orchestration Toolkit. This is a set of composable cloud accelerators that enable retailers to integrate multiple best-in-class technology vendors within their own intelligent cloud platform, substantially reducing both cost and time to value compared with a typical custom build.
It uses the scalable capabilities of Google Ads and Analytics, plus cutting-edge Google AI capabilities and a network of retail media solutions from the Google ISV marketplace.
By harnessing EPAM’s expertise and the Retail Media Orchestration Toolkit, retailers can quickly and cost-efficiently develop an integrated platform with the right foundations to secure advertiser investment today and scale effectively in the future.
Find out more about retail media and the Retail Media Orchestration Toolkit.
1Statista, Global Retail Media Ad Spend 2018-2028, 24/4/24, Global retail media ad spend 2028 | Statista
2The Supply Side: Walmart Connect targets $6B in ad revenue by 2025, Kim Souza, Talk Business & Politics, 18/2/24, The Supply Side: Walmart Connect targets $6B in ad revenue by 2025 – Talk Business & Politics
3Retail media will be ‘bigger than TV’ by 2025 says Tesco, Ian Quinn, The Grocer, 15/5/24, Tesco: retail media will be ‘bigger than TV’ by 2025 | The Grocer