‘Building OOH partnerships with retail media networks’

Addressing the WOO Global Congress in Hong Kong, Sheldon Silverman, CEO of SmartBomb, delivered an insightful address on the transformative power of retail media networks and their implications for the retail and advertising industries. Sheldon, a veteran consultant with over 35 years of experience in global retail and retail media networks, emphasised the importance of experiential marketing and data utilisation in enhancing consumer experiences.

Retail Media and the Experiential City

Sheldon began his talk by highlighting Hong Kong's status as an experiential city. He pointed out that Hong Kong was among the first cities to build a distinct brand using digital signage, lighting, and continuous experiences for both visitors and residents. This context set the stage for discussing the core principles of retail media—creating better consumer experiences through the strategic use of data.

A journey through Retail Media Evolution

Drawing from his extensive career, Sheldon recounted the evolution of retail media. He reminisced about launching an early retail media network in the U.S. financial services sector two decades ago, which grew into the largest network targeting the Hispanic segment. He shared how his experiences, including mistakes made and corrected over the years, have shaped his understanding of the industry.

Sheldon discussed the significant growth of retail media networks within the Quick Service Restaurant (QSR) sector, initially driven by compliance needs due to U.S. nutritional labelling laws. This led to innovations like digital menu boards and data integration for real-time information. He detailed how these advancements extended into drive-thru experiences and beyond, encompassing grocery, convenience stores, general retail, and big-box stores.

Integration and data utilisation

Sheldon emphasised the critical role of data integration in the retail media landscape. With the advent of integrations into Point of Sale (POS) systems, first-party data, supply chain platforms, visual camera analytics, and connectivity with consumer mobile devices, the retail environment is rapidly evolving. He underscored the importance of utilising first-party data, especially in a post-cookie world, to create dynamic and intelligent consumer touchpoints that drive sales and reduce dissatisfaction.

Highlighting the meteoric rise of retail media networks, Sheldon cited U.S. digital retail media ad spending projections, which are expected to reach $55 billion in 2024, accounting for 18% of total U.S. digital ad spend. He mentioned forecasts by GroupM, predicting that global advertising revenue from retail media channels will surpass television revenue by 2028, representing 15.4% of total ad revenue. Retail media is expected to constitute one-fifth of worldwide digital ad spend by 2024, marking a dramatic growth trajectory.

Defining Retail Media Networks

Sheldon explained that a retail media network comprises a collection of media assets, both digital and in-store. These assets include online shopping platforms, mobile channels, in-store TVs, signage, audio, and the interactive experiences consumers have with their devices in retail environments. Retailers enable brands to purchase advertising across these channels, often collaborating with third-party media companies to expand reach.

Importance of First-Party Data

First-party data collection is paramount in retail media networks. Sheldon outlined a three-bucket approach: consent and collection, data aggregation, and monetisation. He emphasised the need for retailers to offer clear value to consumers for sharing their data, such as through loyalty programs, Wi-Fi gateways, and shopping apps. The ultimate goal is to create a feedback loop using machine learning and AI to continuously enhance consumer targeting and engagement.

Global impact and industry insights

Citing a 2023 McKinsey study, Sheldon noted that major global companies plan to increase their spend on retail media networks by 73%. He highlighted the high return on investment in on-site display and video advertising, which are preferred channels alongside social media.

Future directions

Sheldon concluded by urging the out-of-home (OOH) advertising industry to understand its place within the retail media ecosystem and to embrace partnerships. He stressed the importance of digitisation, data sharing, and leveraging clean rooms to create a comprehensive understanding of consumer behaviour. He called for the industry to adapt and integrate with retail media networks to remain relevant and effective.

Sheldon's address underscored the transformative potential of retail media networks. His vision for a future where data-driven, experiential marketing enhance consumer interactions resonated with the audience, leaving them with a clear understanding of the rapid evolution and opportunities within the retail media landscape.