Leapfrog Series: Retail Media 2.0 Looks a Lot Like Trade Marketing 1.0

At NRF and CES is year, the dominant voices in Retail Media were all saying one thing; the store is the next big growth driver for the retail media industry. We've been through this before - retail is VERY cyclical. What was built in the 1990s was rebuilt in the early 2000s, and again every 3 to 5 years henceforth.

Many of the Trade and Shopper Marketing strategies and learnings from those earlier years are still relevant today, and in spite of the perpetual need for reinvention, a lot of the success in retail media 2.0 (or 3.0 or whatever we're calling this next phase), is going to be driven by those who seek out advice from the people who have built this thing before.

I'm calling this the 'leapfrog moment in retail media' - when retailers, vendors and consultancies are willing to take a serious dive into what has worked in the past to sidestep many of the mistakes already made, they gain the upper hand over other new and emerging players in the retail media space who attempt to build anew.

This series will look at the history, learnings, and highlight some of the leaders whom have worked tirelessly to build the foundation for what is now a $100BN+ global industry.

But first, let's start with some history.

When 'Trade Marketing' entered the Zeitgeist

In 1996, The Journal of Retailing and Consumer Services published a research paper called Trade Marketing and Retailing: a European Approach. The paper highlights a new type of relationship between suppliers and retailers that was seemingly first coined in a 1986 Italian journal called 'Trade Marketing'. The paper discusses, among other things, that trade marketing focused on mutually assured success.

In the beginning, Trade Marketing was defined as "a series of actions, the purpose of which is to identify, plan and manage more effectively in order to optimize the use of the [supplier and retailer's] resources and to obtain a lasting competitive advantage".

In 1990, in partnership with Procter & Gamble, a paper in the International Journal of Physical Distribution expanded the term to mean, "the formulation of joint marketing plans and strategies between suppliers and retailers".

If you live in the retail space, the above chart might look like something in a slide deck from the past few years, not 28 years ago. We've been through this before...

What's most interesting is the thought process around joint creation of traffic, new promotional vehicles, and establishing joint brand strategies.

Growth, according to the paper, would come from combining marketing efforts. And back in 1990 - pre-Internet - those marketing tactics were almost entirely in-store media.

In-Store (Physical) Media Circa 1990

In 1990, the dominant Trade Marketing tactics included in-store displays, coupons, flyers, radio, food sampling or product demos, and early forms of 'retailtainment' (sound familiar)?

It was 2008, Walmart introduce the in-store digital screen network and branded it SmartNetwork (thank you Sam Rivkin for the name reminder). By 2010, they had deployed 27,000 screens reaching over 140M shoppers per week.

Also in 2010, Walmart and P&G created two television shows to move their co-branded marketing relationship from a more tactical, performanced-based one to an upper-funnel, reached-based play. They saw an opportunity in television - albeit linear - to play a bigger role in customer's lives.

We've been through this before...

Since 1990, a few things have changed. We have [some] tools to manage resourcing and workflows, making it easier to activate physical media in-store. Digital screens are a little more connected and intelligent. But the core principles, tactics, measurement, supplier incentives, scalability, cost-structures and business models for in-store media remain reasonably consistent.

And a lot of retailers and retail leaders, pre-Retail Media through to today, have proven that this thing is effective and scalable if done right.

The Leapfrog Moment

Retail Media 2.0 looks a lot like Shopper Marketing 2.0 which looks a lot like Trade Marketing 1.0, and it's actually a great thing for a bunch of reasons:

1. In-Store media (sampling, digital screens, signage, displays, etc.), works if done right! These are highly effective, high-reach tactics which have been proven for years to drive results.

2. In-Store media can create a great customer experience - well beyond that of standard digital advertising.

3. In-Store media's reach is unparalleled. Over 1BN consumers visit a physical retail store globally every week.

4. In-Store media can drive the desired outcomes of Retail Media Networks (i.e. profitability, incremental revenues)

And so many more.

But to do this right this time, we have to listen to the people who have built this before.

In a future post from the #RMNleapfrogseries, I'm going to highlight some of my closest advisors and mentors back when we were building Walmart Connect's in-store retail media business. Plus, we'll start talking about many of the considerations needed to establish an in-store retail media business.

And as always, if you want to know more about how we built it at Walmart or where the market is headed in general, we'd love to jump on a call!

Drew