The Rise of Retail Media and the Challenges of a Booming Industry

The retail market in Mexico is growing at a remarkable pace, with no signs of slowing down. The industry is expected to be valued at US$97.29 billion by 2026, based on a report published by Technavio. This growth has been largely driven by e-commerce, which skyrocketed during the pandemic and continues its upward trend. A recent eMarketer study places Mexico among the Top 5 countries leading e-commerce adoption.

Data published by Mercado Ads shows that 8 out of 10 people search for products on e-commerce platforms instead of traditional search engines. This scenario opens up a great business opportunity for the sector: marketing and advertising. Through retail media, retailers’ sites can become powerful advertising platforms, where brands can advertise and deliver the right messages to their target audience through relevant channels.

According to a Morgan Stanley report, retail media will become a US$130 billion industry by 2025, and will account for 25% of the total ad investment expected for that same year. This scenario poses two main challenges for retailers: the challenge to monetize their websites and the challenge to increase their capacity to innovate and offer more and better solutions for brands, advertisers, and website users.

On the one hand, monetization represents an opportunity for retailers to create new revenue streams by taking a bigger role in brands’ marketing strategies; on the other, innovation is essential to foster the right environment to unite brands and shoppers — a fundamental step to establish meaningful and lasting consumer relationships. In this respect, research carried out by Adobe and Forrester Consulting shows that brands that invest in enhancing their customer journey management see better results and improve their revenue 1.7 times faster. 

Martech, a Great Ally for Retailers

Marketing technology, or martech, is constantly evolving and adapting to an ever-changing and versatile advertising ecosystem. This demands continual innovation to create solutions to the pressing challenges for each industry — in this case, for retailers. In fact, there are already AI-powered programmatic advertising solutions designed to boost the growth of retail media.

These AI-powered retail media solutions offer benefits across the board. On the one hand, they help retailers set up new advertising spaces on their websites, which increases monetization; on the other, they help to create a good balance between advertising and user experience. This allows retailers to:

• Ensure that ads are strategically integrated into their sites without impacting user experience.
• Be in full control of when, where, and how ads are delivered.
• Develop diverse segmentation techniques based on available stock and the rules of each business, such as e-store sections, keyword-related searches, URLs, and product landing pages.

By embracing innovation, retailers will not only offer new spaces for brands to advertise in, but also be able to provide a comprehensive advertising service.

For example, at Groovinads, we use this solution to boost the sales of L'Oréal products and its associated brands, targeting abandoned cart users on retailer websites where we are running the campaign and also on the open internet.

Expanding the Horizon of Opportunities

Besides monetizing their websites, retailers can also integrate external media into their ad offering. For example, they could offer brands a varied media ecosystem to leverage, including display, connected TV, and programmatic digital out-of-home advertising options.

AI-powered programmatic advertising is the key to enabling new opportunities and growth that benefit all. Retailers can boost monetization and expand their footprint in the advertising market. Brands can improve sales and effectively track each step of the customer journey. Shoppers can get personalized advertising experiences, with ads tailored to their preferences and needs. In other words, AI-powered programmatic advertising can be a win-win for all.