Retail Media: a game-changing advertising tool

Retail Media is a transformative force in brand communication. By enabling tailored, omnichannel messaging in a buying context to targeted shoppers, and allowing brands to directly measure the impact on purchasing behavior and sales, it provides a competitive edge like never before.

by Anda Sebesi

Globally, the retail media industry is expected to reach a value of EUR 180 billion by 2025, a significant increase compared to previous forecasts, which predicted EUR 160 billion by 2027, according to GroupM, an American media investment group within the multinational holding company WPP. Additionally, Insider Intelligence highlights retail media as the latest wave in digital advertising—the third, after Search and Social Media. It may even become the largest, as it is experiencing exponential growth. This is driven by retailers expanding their media offerings and brands allocating advertising budgets to it like never before. The Compound Annual Growth Rate (CAGR) from 2024 to 2030 is projected at 12-15%, propelling the market size to nearly USD 300 billion.

Within the retail media market, the global digital signage market was valued at USD 25 billion in 2022 and is expected to grow rapidly over the next few years. This growth is attributed to the increasing demand for digital promotional elements aimed at effectively attracting target audiences. Moreover, the digital signage market has seen significant technological advancements, including the adoption of AI and machine learning, 5G technology, touchless interactive solutions, and the Internet of Things (IoT). The retail industry is quickly embracing digital signage with AI and machine learning capabilities to optimise customer data. These technologies enable personalised content delivery, audience analytics, and real-time, data-driven decision-making.

The results speak for themselves. According to McKinsey, retail media delivers a return three to five times greater on advertising spend compared to traditional media buys. As such, retail media will not only be a place for the right message at the right time in the right place, but will also fully embrace the ‘surprise-and-delight’ marketing approach. “Commercial TV’s decline is faster than we thought, but no one knows what’s next. There is a growing sense that reaching giant audiences to build brands in the decade ahead is going to be more difficult,” said Mark Ritson, marketing professor at London Business School and MIT.

A bold move

With a large portion of shopper decisions made in-store, it’s critical to elevate traditional communication methods. In response, Auchan Romania, in partnership with Retail Media Hub, has implemented a retail media ecosystem that connects brands to consumers in a relevant and insightful way. This effort has resulted in an in-store customer journey capable of delivering the right message to the right person, at the right time, in the right place.

To harness the power of retail media, three key elements are required: rich data on real shopping behaviour and customer profiling (e.g., data from loyalty and e-commerce programs); a Retail Media Network (i.e., a set of media that communicate directly with shoppers during their journey); and large, qualified audiences, driven by customer traffic in physical and online stores. Retailers alone hold these key elements of Advertising 3.0, and their role as vital and effective media powerhouses in the new economy will quickly be recognised by advertisers and the advertising industry. Companies like Auchan, the first Romanian retailer to introduce omnichannel retail media several years ago, already offer concrete, tested, and effective communication and activation solutions for brands, cementing their leadership in the development of this advertising vertical.

The essence of Retail Media is efficiency. On one hand, it targets the desired audience with the right message, on the right channels, at the right time; on the other, it measures the impact on sales in real-time and enables immediate optimisation.

“With much smaller budgets invested in Retail Media, Auchan brands see results, ROI, and ROAS that are significantly higher. Integration into the advertisers’ media mix can be done in two ways: either as a conversion-driven, operational component of a traditional media campaign or as a media ecosystem in its own right, independent and parallel to other media. In the first case, take a campaign run on classic TV channels. A viewer watches the ad during a commercial break of their favourite show, and perhaps, days later, when they go shopping, they recall the ad—or perhaps, more likely, they don’t. But if we remind them as they enter the store, the likelihood of them making a purchase action skyrockets, exponentially increasing the effectiveness of the TV campaign. We’re essentially adding that missing component of effectiveness. In the second case, the entire campaign is planned by the advertiser from the outset, with Auchan Retail Media integrated in parallel with other communication channels, working synergistically. This approach is 360-degree, data-driven, and has clearly superior performance indicators,” says Tiberiu Danetiu, Board Member & Director of Corporate Affairs & Retail Media at Auchan Romania.

But what about the shopper?

Eager to better understand their customers and their position within the retail media ecosystem, Auchan Romania conducted an exploratory study at the end of 2022 called Eye Tracking. The study was carried out with the support of a team of professors and research and strategy specialists from the School of Marketing at the Economic Studies Academy (ASE). The research revealed that all customers in the exploratory study noticed the screens in the store. Moreover, nearly half of the respondents remembered over 70% of the ads displayed on the screens. Two key conclusions emerged from the study: brand awareness and the seasonal nature of the offers contribute to higher memorability, and campaigns offering shopper advantages lead to greater success in immediate conversions. In addition to the qualitative research, Auchan Romania also conducted a quantitative study, based on face-to-face interviews with 712 respondents—both men and women—from Auchan stores in DrumulTaberei, Titan, Constanta Vivo, Cluj Iulius, Craiova Electroputere, and Timisoara Iulius. The research showed that the majority of shoppers (85%) noticed the screens, and as a result, the store was perceived as more modern (69%), more digitalized (45%), more dynamic (42%), and more aesthetic (41%).

When compared to other media (TV ads, subway ads, billboards/street ads, and online ads), more than half of respondents considered the screens to be more useful. When asked how TV screens helped them, 66% said they learned about promotions, 65% discovered products, and 13% found useful information. Additionally, most respondents noticed product ads and offers on the screens at Auchan, with 59% stating they had purchased the advertised product. Lastly, more than half of respondents found the messages on the screens useful. Those who did not purchase products after seeing the messages said they were likely to do so in the future.

“In our first test, the sales growth index rose by 10-15% for products advertised on screens, compared to stores without screens. It’s important to note that the majority of these ads were not about discounts. This demonstrates the remarkable efficiency of retail media,” concludes Danetiu.

The Future of Retail Media

Retail media is the fastest-growing digital advertising channel, poised to surpass traditional search and social media ads. By 2030, it will evolve into an AI-driven, omnichannel powerhouse, offering data-rich, high-ROI advertising for brands worldwide.

First-party data is the new gold for ad targeting. Retailers will become digital ad powerhouses, challenging Google & Meta. AI & automation will enhance retail media efficiency. Integration with Connected TV & social commerce will drive new growth.

Retail media spending will double by 2030.