‘The Store Is Now a Stage’: The Emergence of In-Store Retail Media
Andrew Lipsman, Independent Analyst & Consultant, Media, Ads + Commerce, helped kick off the Path to Purchase Institute’s inaugural Storefronts event in Chicago today with an enlightening presentation on how physical retail is the new TV.
“Linear TV used to be the center of our culture,” Lipsman said; and so naturally that’s where advertising went. However, over the past decade, linear TV has declined notably, and as a result, ad rates have skyrocketed because budgets haven’t had somewhere better to go — until now.
Retail media is quickly emerging as the new center of the advertising universe and will surpass linear TV in spend next year. By 2028, it will triple, reaching $129.9 billion, a $75 billion increase from 2024, according to eMarketer’s projections. Of that $75 billion, in-store retail media is expected to make up only a small portion — $1.1 billion — a forecast Lipsman calls “conservative” and certainly has the potential to grow so long as brands recognize its vast opportunity.
While digital retail media (on-site and off-site) has been embraced by brands and chief marketing officers, they have not yet prioritized in-store retail media investments with the same luster. In fact, most brands don’t have organizations or even a sole person focused on in-store retail media.
But unlike brands, retailers have been prioritizing digital in-store media over the past couple of years.
“In-store retail media reaching its potential requires a full-funnel framework,” Lipsman said. “It's the only place where you can have this dynamic, digital creative content right next to the point of sale.”
Retail media is a roughly $55 billion industry today that’s almost exclusively driven by digital audiences, but Lipsman said physical stores deliver much larger audiences.
“When you look at some of the top retailers and their in-store audiences, they stack up very favorably with the top broadcast networks,” he said. “Many other retailers are like large cable networks.”
Additionally, Lipsman said in-store retail media can “reach the unreachables” that linear TV now struggles to reach.
Digital screens, as they continue to roll out, are starting to reach a lot more people. They are most noticed at self checkout and in checkout lines, as well as near store entrances and at digital endcap displays.
“All the store is now a stage, and I think that's how we need to start to look at in-store retail media," he said. "It's about looking at the physical store as a theater. It's the new cultural touchstone that we all have. It's the place that we go multiple times a week and it can start to fill that void that's being left behind by linear TV.”
“It also has exactly what brands want: a great palette for creativity, brand safety, viewability and it's close to the point of sale,” he added.
In terms of quality, in-store retail media outperforms every other major media channel in terms of ad experience and attentiveness.
Also importantly, Lipsman said shoppers like and want in-store retail media to inform and remind them about products, helping establish both mental and physical availability. According to Vestcom, the number one thing shoppers like is info on sales and promotional offers, but they also like how it helps them discover new products and elevates the store aesthetic, among other things.
Some other takeaways Lipsman highlighted:
- Physical stores influence new product purchases more than any other medium, including social media, retailer websites/apps and search engines.
- High-quality creative doesn’t need to be overthought in-store. Simple creatives can be really effective, and Lipsman is particularly excited to see how this will evolve.
- In-store retail media can also be experiential, such as accompanying media with experiences such as product samples.
- Retail media networks will need to make it easier for brands to plan, execute, and measure in-store ad campaigns if they want to attract more spend.
- It will be critical to measure long-term branding effectiveness alongside short-term sales effectiveness.
- Measurement must evolve toward incrementality and capture the full-funnel effects across channels and time.
“If you want to know why retail media is going to grow so quickly, it's because there is new value that is going to be created through [in-store retail media],” he said. “I think we need to think about it like other mass media such as TV. We need to plant a firm foundation of the dimensions of reach and quality.”