If your retail media strategy is digital-only, you’re doing it wrong. Here’s why.

This article originally appeared in Retail Week.

Let’s kick things off with a pop quiz. No prizes, but see if you can guess what the following headlines have in common.

• “The rise of retail media networks: why the digital ad revolution is taking off”…
• “Retail media spend up 12% in 2023 as digital landscape shifts”…
• “Retail media will make up one-fifth of worldwide digital ad spend this year”…

If you answered, ‘they all make it sound like retail media is exclusively about digital advertising’, congratulations.

In the last few years, we’ve heard a lot about the rapid growth of retail media. We’ve heard how it’s ‘the fastest growing ad channel¹’, how the European market is expected to ‘grow by 36% in 2024²’, and that retail media ad sales are ‘predicted to overtake TV by 2028³’.

At the same time, a lot of the focus has been on retail media’s digital credentials. And, in some ways, that’s understandable. From sponsored search results through to closed-loop measurement, there’s plenty for brands to get excited about when it comes to digital retail media. At the same time, the buzz around digital has also cancelled out a lot of the noise around in-store media.

And there’s the problem. Because—if you’re thinking about retail media as a digital-only proposition—then you’re doing it wrong.

An essential part of any retail media strategy

There are three key reasons that brands need to include store media as part of their retail media strategy.

1. Store media speaks to customers where the action happens
   Physical stores are where most of us still do our shopping. Take these numbers from Tesco, for instance. Even as the UK’s leading online grocery retailer⁴, Tesco says that 85% of its sales take place in store⁵.
   What’s more, brands have a huge chance of influencing those purchases, with most shoppers making on-the-spot decisions about what to buy. Tesco says that 85% of their customers are spontaneous in their purchasing choices⁶.
   Finally, there’s the sheer scale to consider. More people than live in Manchester and Birmingham combined⁷ are exposed to in-store advertising at Tesco every week—6.13 million⁸. So, store media offers gigantic reach to a receptive audience, all in a location where people can buy your products.
2. Store media is highly measurable—and it delivers great results
   Digital advertising offers a lot of accountability. If a shopper clicks on your e-commerce banner ad and puts that product in their basket, that’s a fairly concrete measure of its effectiveness. What about store media, though? How do you measure the sales impact of a shelf talker or a digital screen?
   Measurement of store media has become a lot more sophisticated in recent years. At dunnhumby, for example, we use a “test and control” approach. “Test” stores will run a campaign, while “control” stores won’t—meaning that we can see the true impact of exposure on shopper behaviour.
   Using those techniques, we’ve seen firsthand just how effective store media can be. In a broad analysis of printed point-of-sale campaigns, we found that for every £1 spent, brands generated £1.56 in product sales uplift.
3. Store media is constantly evolving—and constantly improving
   Store media isn’t static. New ideas and technologies are giving brands smarter ways to engage with customers.
   In-store digital screens, for example, are an effective medium on their own. Add data science into the mix, and they become more impactful still. We’ve found that using data science to analyse and optimise the performance of digital screens can improve sales uplift by as much as 40%.
   Then, you have exciting and emergent new ad formats. Turning to Tesco once again, earlier this year, the retailer began offering ad placements on its Scan as you Shop handsets. As a result, brands now have the chance to communicate with customers no matter where they are in store.
   Innovative new approaches like this are helping to ensure that store media keeps moving forward.

I’d like to leave you with one final thought on the power of store media.

When dunnhumby surveyed a large group of UK consumers recently, we asked them which media formats had ever persuaded them to purchase a product. A fifth said they had by persuaded store media. Not only is that on par with TV (23%), it’s twice as many who said the same about social media (9%) or ecommerce ads (11%)⁹.

Simply, store media works.

1 Retail media is the fastest growing ad channel, but ‘is not invincible,’ our analyst warns – EMARKETER, 4th December 2023

2 Europe’s retail media ad market to grow by 36% in 2024 - WARC

3 Retail media ad sales predicted to overtake TV by 2028 – Retail Gazette, 13th June 2023

4 https://ecommercedb.com/store/tesco.com

5 Tesco Media & Insight Platform sales data, 2023

6 Shape What Britain Buys customer research – dunnhumby, 2024

7 Largest urban agglomerations in the United Kingdom in 2023 – Statista.com, 31st May 2024

8 Tesco Media & Insight Platform sales data, 2023

9 dunnhumby Consumer Pulse research, May 2024