Why retail media networks aren’t going anywhere

Unlike many of the buzz words in the marketing industry, retail media networks are here to stay. In fact, a recent report by Kantar said that by 2028, retail media will account for almost one-quarter of all US media ad spend.

Closer to home in Singapore, FairPrice Group (FPG), Singapore’s largest retailer, for example, was an early mover in the space. In 2022, FPG partnered with The Trade Desk to offer brands on the latter’s platform insights on the impact of their digital advertising campaigns, across offline and online sales channels. Through the partnership, FPG also offers these brands reach and exposure to FPG’s customers beyond the group’s owned media platforms.

The partnership was unveiled at MARKETING-INTERACTIVE’s Digital Marketing Asia 2022 conference, and marked the first time that FPG’s pseudonymised sales conversion data would be available within a programmatic media buying platform. Two years on, FPG’s first party data, which is crucial to the success of retail media, has grown in leaps and bounds as more and more consumers have embraced the buying on its apps.

Currently the app has about 1.5 million monthly active users, and while it has a slight skew to 29-49-year-olds, older segments are also rapidly coming on board. To entice this wider audience, Alvin Neo, chief customer and marketing officer at FPG, speaking at a recent industry roundtable hosted by MARKETING-INTERACTIVE in partnership with FPG, said the brand had to make some bold decisions.

One such instance was when the team had to make the very brave choice of sunsetting its Kopitiam card - a loyalty card for its Kopitiam chain of food courts and hawker centres - and other offline channels to encourage customers to fully embrace the FPG app.

It also had to make its app integrated with people’s lifestyles. In September 2024, FPG collaborated with the Health Promotion Board (HPB) to integrate the FPG App with HPB’s Healthy 365 app, enabling FairPrice customers to earn HPB Healthpoints from purchases of Healthier Choice products in FairPrice stores.

“Life can get very busy in Singapore, so our aim is to present people with seamless and convenient solutions that complement and improve their day-to-day experiences,” Neo said.

As an integral part of the nation’s history and Singaporeans’ lives, FPG is in a unique position to leverage its understanding of and engagement with people from all demographics to improve how it serves its customers.

Adding to the conversation, Bryan Choong, GM of retail media and omni growth at FPG, said: “Our customers’ receptivity and adoption of digital experiences has grown ten times in volume since we set out on this journey. To us, this is a very encouraging signal that we’re on the right track with making every day a little better for all in Singapore, not just younger audiences, by building on our digital capabilities and customer offerings.”

What are marketers considering when spending on RMNs?

With its keen understanding and data of Singaporeans’ challenges, needs, and wants, FPG is confident in its ability to effectively reach across audiences in Singapore through its retail media networks. The sophisticated retailer-operated Omnichannel advertising opportunities on its network allows brands to reach highly targeted audiences through personalised ads on a myriad of platforms.

Enabled with first party data, its brand partners can often leverage detailed consumer insights to optimise ad spend and improve campaign effectiveness.

But the question remains, with so many platforms already available, and marketing budgets constantly under strain, will brands want to explore yet another platform, or are they approaching retail media with caution?

Eileen Ooi, APAC CEO of PHD, said that while clients are certainly interested in retail media, and the growth opportunities it presents, the biggest worry is around managing margins.

“That is always a challenge when it comes to commerce, because with more marketplaces, clients constantly need to evaluate how they can actually manage their margins. So, the question always on clients is whether they should go for volume or value,” she said.

What’s the right type of brand to jump on to RMNs?

According to Kantar, some of the ways brands can make the most out of the RMN spend is to collaborate with retailers to analyse their first-party data, allowing for more targeted and relevant advertising. Brands must also tailor their creative content to align with the specific consumer segments identified through RMN data.

Encouragingly, however, Ooi shared that while commerce has traditionally been seen either at the mid or bottom of the funnel to drive sales, today clients are actually seeing commerce almost as a full-funnel journey, from discovery and branding to transaction, because of how search patterns are evolving. Hence, retail media shouldn’t just be seen as a medium for conversion, but also as a platform for branding and discovery.

And while it might be easy to think of endemic brands spending on such dynamic platforms, non-endemic brands also stand to gain from these collaborations.

Also present at the roundtable was Rachel Fong, GM, studio SEA from The Walt Disney Company, who said that digital has opened up vast numbers of channels to speak to the consumer. While in the past a simple poster and an ad would do, today consumers have to receive personalised offerings to see value in their spend.

“Data collaboration will definitely come in handy for us to learn to talk to the right audience at the right time because it is challenging to reach them at a time where they are receptive,” Fong said.

To this, Neo said that at the end of it, it is important to consider retail media as not just an avenue for direct conversion, but also collaboration and segmentation.

“For example, a new Disney movie might not be for everyone, but it might be right for families with young children, and that’s where a RMNs rich first party data comes in because we know what stage a family might be in,” he said.

“If our brand partners are able to use first party data layered with their other data points, this might result in highly targeted and relevant ads being served that doesn’t disrupt their experiences and really cuts through the clutter.”

If you want to find out more on FairPrice Group's retail media solutions, reach out to the team at retailmedia@fairpricegroup.sg.