There’s no denying the rise of retailer media networks in recent years and their cemented strategic status in the U.S. for years to come. U.S. digital retail media ad spending grew from $13.23 billion in 2019 to $40.81 billion in 2022, according to an eMarketer forecast, and will increase to $61.15 billion in 2024. Boston Consulting Group estimates the U.S. retail media market will grow to $100 billion by 2026.
The U.S. is not the only area of the world that’s witnessed retail media market growth. Retail media’s rise in the U.S. has fueled growth in Europe, where the Interactive Advertising Bureau (IAB) Europe forecasts retail media ad spend will reach 25 billion euros ($26.7 billion) by 2026 — a huge jump from 7.9 billion in 2021.
“I know the numbers are always big around the growth of retail media globally and the investment that’s moving into the space, but I think the proof is probably more in the pudding: Now we see people’s general interest in it,” says Ollie Shayer, omni-media director at Boots UK, a British health and beauty chain owned by Walgreens Boots Alliance.
As Boots has recognized the growth of retailer media networks in recent years from U.S. retailers, such as Walmart and Kroger, there’s been a passion for retail media at his company, Shayer says. It’s the interest of the retailer’s supplier base, however, that’s significantly accelerated in the past 18 months. This is predominantly driven by the evolution of first-party data, Shayer explains, as well as a desire, especially from fast-moving consumer goods companies, to use their investment effectively and efficiently.
Boots has seen positive responses and strong growth from solutions such as on-site sponsored search and sponsored products. While the toolkit is generally similar between the U.S. and the U.K., off-site advertising is still growing in Europe.
“It’s not maybe at the scale yet that the U.S. is, in the sense of driving a lot more of the off-site activity through things like Meta, through DSP partners and the utilization of data through that,” Shayer says. “I think that’s predominantly because the data regulations in Europe are obviously quite different from the U.S. When I talk to my colleagues at Walgreens, I’m always very envious of the data availability they have.”
The EU General Data Protection Regulation (GDPR) is considered the world’s toughest online privacy law, limiting how companies can collect and share data without user consent.
“We have to make sure that we can’t individually identify people,” says Sam Knights, CEO of London-based SMG (Shopper Media Group). “They have to be anonymized, and they have to have given the right amount of consents, and you have to be able to prove at every stage that it’s done that.”
The regulation creates its own challenge in terms of being able to target shoppers off-site the way that, for example, Walmart Connect can, Knights explains. (While it presents difficulties for advertisers, Knights notes the regulation is a good thing as it centers on individual security.)
Shopper behavior in England has not only influenced how consumers there are marketed to, but it’s also shaped the general definition of retail media in the country. Shoppers in the U.K. are not driven by coupons or mailings — which are non-existent in England — but instead in-store promotions and presence, according to Knights.
“It’s much more in the moment, less of a plan, which makes the shopper behavior in-store easier to manipulate in a positive way for a brand,” Knights says. “So, the in-store presence is much greater in Europe than it is in the U.S.”
This difference has shaped how retail media is defined in the U.K., says Knights. When discussing retail media in the U.S., generally marketers are referring to e-commerce, digital and programmatic advertising, whereas in the U.K. in-store solutions come to mind first, he explains.
Commerce Marketing Across Borders
Want more international coverage on retail media and commerce marketing? Be on the lookout for the September/October issue of P2PI Magazine for an in-depth feature exploring how shopper marketing is evolving across the globe.
And if you are working in commerce marketing abroad and are interested in learning more about our new International Advisory Board, contact Editorial Director Jessie Dowd at [email protected].
“The sophistication of what you can do in-store in the U.K. and Europe is actually ahead of where the U.S. is, but the sophistication of what you can do digitally is way ahead in the U.S. than it is in the U.K.,” Knights says. “We’ve started from different places, I think, and that’s because of the shopper behavior [and] because the impact that you can have in a physical sense is much greater here.”
Beyond the classic point-of-sale solutions, such as floor clings, Boots is working on delivering programmatic digital radio and adding more digital screens in stores. “The idea [is] more of a digitization of the in-store environment, so things can be changed more easily centrally, but also we provide our suppliers with easier interfaces to do that. So, they can load and upload their content into it quite easily, we can approve it ... and we can push it out within 30 minutes into the store environment,” Shayer says.
Taking some learnings from the launch of Walgreens Advertising Group in 2020, Boots UK tapped SMG’s retail media agency Threefold to rapidly accelerate the retailer’s established partnership marketing group. The result was a bespoke, joint venture: Boots Media Group.
“I think the biggest thing for us was not to create an external entity that felt like it was an agency. I think that’s been an incredible piece of work from the guys at Threefold to really integrate into the Boots environment,” says Shayer, adding the team started with 10 employees two years ago and has grown to 40.
