What is retail media and how does it work?
November 10, 2024
From its origins in media available within the retailer ecosystem, retail media has rapidly grown in prominence over the last decade. However, what do we mean when we talk about retail media?
How to define retail media?
Retail media can be defined as any marketing promotion near the point of purchase.
In the broadest, and increasingly common definition, retail media can be used to refer to both in-store and online marketing tactics. However, depending on the context, you might hear it used in reference to solely promotion near the online point of purchase.
This means while we can think of retail media as everything from in-store advertising, coupons and online advertising - the exact meaning of the term can depend on who you are speaking to.
In an online context, we can understand retail media as the extension of ‘traditional’ shopper marketing into the digital space. The moment shopper marketing adopts the tactics we have more commonly seen in online media, such as social, video sharing or news platforms.
Retail media can be defined as any marketing promotion near the point of purchase. Retail media is commonly used in a digital marketing context to refer to digital advertising within a retailer ecosystem. However, it is increasingly used to refer to both in-store and online promotions.
 
Why is retail media increasingly important?
While in-store promotion has always been the fundamental pillar of shopper marketing. It is with the growth of retail media in digital marketing that the term has gained more prominence.
As of 2024, online retail media is now estimated to represent a fifth of all online digital advertising spend – with a worldwide spend of £140 billion according to Emarketer.
The growth of online retail media has been driven both from brands seeking a competitive advantage at the point-of-conversion, as well as retailers looking for new sources of revenue.
We can think of this as the natural extension of retailer's offering promotion opportunities near the physical in-store shelf. Now, retailers have extended these same tactics onto their ecommerce platforms. In the same way with physical retail media you could invest in a point-of-sale display next to the physical shelf, with online retail media you can invest in digital display ads next to the retailer's 'digital shelf'.
Online retail media is now a fundamental tactic in winning the digital shelf battle for visibility.
Another factor in the growth of retail media has been the ‘death of the cookie’. This has encouraged brands to find alternative ways to target consumers. And, encouraged retailers to leverage their wealth of first-party customer data.
What is a retail media network?
Alongside online retail media, you’ll quickly come across the term retail media network.
If retail media is the set of tactics around promotion at the point of purchase, a retail media network is the infrastructure that powers retail media. A retail media network is the advertising platforms, systems and processes that allow brands to invest in retail media.
A retail media network can be completely owned and run by a retailer (such as in the case of Amazon Advertising) or it can be a third-party retail media solution operated on behalf of a retailer (such as in the case of Criteo or Citrus).
The difference between On-site and Off-site retail media
Another key-distinction is between on-site and off-site retail media.
On-site retail media refers to any promotions that happen on the retailer’s website. An example of on-site retail media is sponsored products on a retailer website.
Off-site media, in contrast, are promotions that occur outside the retailer’s website to drive consumers to the retailer’s website. An example of off-site retail media is display advertising linking back to the retailer website.
The Richmond Marketing Consultancy works with companies that need to optimise their ecommerce presence. We can use our experience to help you every step-of-the-way. We can support you with everything from an initial ecommerce audit, to actioning optimisations and upskilling your marketing team. If you need help with retail media then please get in touch
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