Behind the rise of retail media is a valuable asset for the retailer: first-party data from its consumers. Unlike other channels, retailers hold rich information about buying behavior – transaction history, viewed items, visit frequency, preferences, and even loyalty program data. This information allows for extremely precise audience segmentation. Retailers can leverage their customers’ purchasing insights to offer hyper-targeted advertising solutions, reaching the right consumer with the right message at the most opportune time.
This ability to segment based on proprietary data gains strategic importance in a context of increased restrictions on third-party cookies usage and demand for privacy. Retailers, acting as ‘audience owners,’ can deliver qualified and intent-based audiences to brands, something difficult to find in other media on the same scale.
For instance, a pharmacy chain can segment vitamin ads only to customers who recently purchased health products, or an online supermarket can promote organic food to consumers looking for fitness items. The intelligent use of purchase history, searches, and demographic profile makes ads much more relevant to the consumer, increasing sales and brand loyalty. Studies highlight that retail media precisely offers this mass customization possibility, combining reach with tailored content for each customer.
In addition, the quality of retail data allows for more robust performance metrics. As retail media networks operate within the retailer’s own systems, it is possible to directly attribute the outcome of a campaign to sales, closing the loop of measurement. This ‘closed-loop’ attribution – where the advertisement view can be connected to the transaction at the cashier – is a significant advantage. The richness of purchase data and the ability to attribute return on investment directly make retail media a highly valued strategy for brands.
For advertisers, this means that investing in the retail channel is not a leap in the dark: on the contrary, sales results can be quickly and precisely proven, facilitating investment justification and almost real-time campaign optimization.
Integration between digital and offline: direct impact on the POS
An important aspect of retail media networks is the integration between the online and offline worlds. Some of the largest retailers operating in Brazil have a massive customer base in both online and offline. This allows these companies to make a unique combination of channels to engage the consumer at multiple touchpoints during their purchasing journey.
Another example: a customer may see a product banner in the supermarket’s mobile app and, when visiting the physical store, encounter a personalized offer on a digital screen at the shelf or near the cashier. This online-offline synergy takes the advertising message to the ‘last mile’ of the decision-making process, literally when the consumer has the product in hand. Not surprisingly, experts see retail media as a way to influence consumer choice at the critical moment of purchase – a potential previously limited to traditional POS materials.
Within stores, in-store digital media is gaining space as an extension of retail networks. Smart screens, interactive kiosks, electronic shelf labels (ESLs), and even monitors on shopping carts become advertising inventory. Retailers can strategically position these screens near checkouts or high-traffic aisles to stimulate last-minute purchases.
Logically, from an operational standpoint, integrating online and offline requires a technological effort in measurement: unifying the two media. This has still been a challenge for retailers, whose solution has been personalization through increasingly enhanced loyalty campaigns. Even though there are still technological issues, the direction is clear: the future of retail media lies in offering a cohesive omnichannel experience, where it doesn’t matter whether the interaction took place in the virtual world or the physical world – both environments complement each other to engage consumers and drive results for brands.
Paradigm shift: from sales channel to media channel
The emergence of Retail Media Networks represents a paradigm shift in how the role of retail in the marketing mix is perceived. Historically, retailers were seen only as distribution channels and points of sale, while brand building and advertising were the responsibility of traditional media vehicles, or more recently digital platforms. With the shift to retail media, this separation dissolves: retail is now also a mass communication vehicle, competing for advertising budgets that used to go to other media.
In practice, large retail networks have become true publishers, monetizing their websites, apps, and stores just as a news portal lives off ads or a TV broadcaster sells commercial space.
For advertising brands, this represents a reconfiguration of strategies. Part of the investment that was previously allocated to trade marketing actions at physical point of sale shifts to media actions on the retailer’s digital properties. Another portion, which would go to generic mass media, can now be allocated more focused through retail media, precisely reaching the shopper at the “moment of truth” of purchase.
This convergence causes marketing and trade to come together, requiring managers to think in an integrated way: selling and communicating have become facets of the same consumer journey. As a result, major global advertisers are already reorganizing teams and budgets to consider this new pillar. Some call this movement the “mediafication” of retail – that is, retail ceasing to be just distribution and also becoming media.
If supermarkets, pharmacies, and department stores were previously just stages for other media strategies, now they have their own spotlights. This model redefines not only investment flows, but also demands new approaches from all market players. Brands need to be more data-driven and performance-oriented, agencies need to incorporate new knowledge and skills, and retailers take on media company responsibilities, safeguarding the consumer experience also in terms of content and ad relevance.
The advertising ecosystem is expanding and becoming more complex – however, at the center of this transformation, there is a clear logic: those who are closer to the consumer in the buying journey gain voice and value in the media game. Retail, with its own platforms, has proven to be in the right place at the right time to capitalize on this dynamic. It remains for the other pieces of the market to adapt to this new paradigm, integrating retail media into their strategies to not fall behind in this evolution that, by all indications, is here to stay.
