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Retail media forecast to see $1.2 billion boost to ad market by 2026

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By Published On: September 16, 20220 Comments

With an existing market worth of $850 million, professionals services network PwC forecast that the value of retail media could be worth as much as $2.1 billion by 2026, provided retailers are willing to take advantage of the largely untapped potential offered by opportunities in the industry.

Though hardly a new phenomenon, developments in the area of retail media have seen the earning potentials of retailers willing to take advantage dramatically enhance in recent years, with some of the biggest names in retail and ecommerce already beginning to shift focus to reap the benefits.

“Since the earliest days of product catalogues, in-store radio and point of sale displays, retailers have offered their suppliers access to advertising spots in their owned-media assets,” writes PwC in their 2022 emerging channel spotlight on Retailer Media in Australia, “What has changed in the last few years is a combination of focus on external commercialisation and technological development.”

A large part of these technological developments driving the potential of retail media are thought to at least partly be as a result of the COVID-19 pandemic, with the accelerated adoptions of online shopping and rapid growth in e-commerce. As more people have begun choosing to shop online, demand for ad placements on retailer websites have grown, with e-commerce giants like Amazon looking to take advantage.

Startups looking to better facilitate access to retail media opportunities, such as platforms CitrusAds and Zitcha, have also emerged to tap into the growth potentials of retail media both now and into the future.

“The retail media sector is in the early stages of an incredible digital transformation,” writes Zitcha marketing director Aysha Cincotta in Mumbrella, “Trust me when I say, you don’t want to miss out.”

As to further demonstrate the value potentials of retail media, results from the Roy Morgan Australian Readership report showed a surprise number of Australians reading print magazines on a monthly basis, numbering as much as 10.9 million (51.5 percent of Australians). Of the three most-read magazines in the country during the year leading up to March 2022, three belonged to retailers, with magazines for supermarkets Coles and Woolworths boasting the first and second most-read print magazines respectively. In fourth place sat Bunnings magazine, with an estimated readership for March 2022 of more than 1.5 million.

Print magazines are hardly even the best demonstration of the potentials for retail media currently on display, with PwC forecasting the pureplay e-commerce subsection of retail media to “outstrip traditional retailer media over the forecast period”.

Audio also has a major role to play both now and in the future, as previously touched on here at Power Retail. According to new data from multimedia company Southern Cross Austereo (SCA), a study of 124 audio advertisement campaigns in the period of January 2020 to July 2022 resulted in an action response rate of a staggering 100 percent. Listeners who heard an audio advertisement based upon the assessed samples subsequently performed some form of action response, such as looking up the brand online, going to the brand’s store, downloading the brand’s app or purchasing from the brand.

Rates of influence from shifting investments into audio, as measured in SCA’s data, see 14 percent more influence when combined with advertising for screens than screen advertising alone, 18 percent more influence when combined with advertising on social media than advertising with social media alone and an even greater 39 percent more influence when combined with digital advertising than digital advertising alone.

This is at least partly due to audience numbers for audio being as high as 78 percent of Australians on a monthly basis, as reported by Power Retail on September 12 from research conducted by The Infinite Dial Australia.

All told, as the PwC reporting affirms, Australian retailers willing to learn from ecommerce and traditional retail giants overseas taking advantage of retail media’s meteoric potential could see considerable boosts to sales growth and consumer engagement numbers. As a direct example, Amazon most recently reported an 18 percent increase to revenue from its advertising services in Q2 of this year via its efforts in developing its retail media focus and capabilities, rising to a year-on-year total of US$8.6 billion.

While most retailers can’t boast the resources of an e-commerce giant like Amazon, all retailers can nonetheless expect to reap rewards from a more focused embrace of the opportunities provided by advancements and trends in the space of retail media.

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