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People have been shopping in stores for centuries. Trading posts, shops, markets, boutiques, chain stores. People like to look at items inside a structure, squeezing, sniffing, touching, browsing, comparing and ultimately choosing items to take home.
Despite the surge in ecommerce, more than 80% of shopping is still done in-person. In-store remains a key frontier, capturing a massive audience. This is why I strongly believe in the inevitable rise of in-store retail media. Retailers are integrating digital media, from eye-catching TV walls to informative kiosks, and engaging shoppers with audio as they browse.
It’s not a matter of if in-store retail media will go mainstream, but when. Let’s discuss the timing and how brands can prepare, because you do still have some time, thankfully.
Bring home the hardware first
We can talk about walls and kiosks all day, but one fact remains: Digitized surfaces for advertising in retail spaces are currently limited due to the expense of hardware and the challenges of installation. The cost includes not only the screens but also the necessary wiring and store upgrades.
Most stores were not designed with the foresight for future digital installations. While there are solutions to minimize disruption, they come at a price and require careful implementation.
Once hardware is addressed, the next hurdle is software. While programmatic platforms are readily available, concerns about measurement, privacy and maintenance become cost factors.
The takeaway here for both the retailer and the advertiser is that the most frictionless entry into in-store retail media is through audio. Audio streaming advertising is a great first test as it doesn’t require new hardware and can utilize existing systems (“Cleanup in aisle 2, please.”) There will still be measurement and maintenance to figure out, but the barrier to entry is much lower on the audio front than the visual one for now.
Given the margins that the average retail media network is reporting to the market (north of 40%), one could surmise that the next investment back into retail media (after investments in measurement, of course) would be this very hardware. And with that, we get catapulted into a multibillion-dollar opportunity and a change in the future of retail as we know it today.
