Small Stores, Big Impact: Why Retail Media is a Weapon for the Shrinking Retail Landscape

Online sales accounted for nearly 20 percent of all retail sales worldwide in 2023, and retailers are beginning to rethink the way they approach brick-and-mortar stores. Recent announcements by industry giants Macy's and Best Buy, which are focusing on smaller-format locations, underscore the urgency for all retailers to adapt to evolving customer expectations and digitally innovate.

To navigate this trend effectively, retailers need to optimize shrinking physical locations while maximizing and enhancing in-store and digital experiences through retail media. This means integrating technologies, creating customer-centric experiences, and using data-driven insights and measurement to create compelling retail environments. In 2024 alone, omnichannel retail media ad spend in the U.S. is expected to grow nearly 30 percent reaching $60 billion.

Consistency of Brand Messaging Amplifies the In-Store Experience

Consumers expect a seamless experience no matter where they interact with a brand or retailer. Today’s retail media enables consistency of messaging for the customer journey across all touchpoints, including e-commerce, online research, mobile and in-store. That consistency amplifies the impact of the physical retail store experience. The brands will pay for it, but only retailers can make it work by tapping their vast amount of opted-in shopper data to influence the right customers. This means showing ads for products that are likely to interest specific groups of customers, based on past purchases, search behavior and groupings in loyalty CRM databases.

Imagine someone shopping for new hiking boots to hit the trails this spring. That’s a relatively high-consideration, infrequent purchase, so the consumer will do her research ahead of time. As she looks at boots on a retailer’s e-commerce site, her interest is captured by the retail media platform. Or, if she has a history of camping purchases in the retailer’s stores, her interest is known from her past in-store sales. Either of those data-driven insights can power a targeted ad for a smart pair of boots that catches her eye and drives her into the physical store.

But once she’s in-store, she's overwhelmed by the options and becomes unsure which are the best for her upcoming trip. As she browses the selection, analog shelf signage displays the boots she's considering. If the imagery and taglines are consistent with the digital ads she’s seen previously, the brand will break through. Perhaps there are digital screens in-store or interactive kiosks that showcase the boots in action on a challenging hike, with customer testimonials highlighting waterproofing or ankle support features.

More commonly, the shopper will check her phone in-aisle to compare prices or read product reviews — and retail media will let the boot brand show up for that customer as she makes her final decision. The customer hikes over to checkout and takes her new boots home.

By being part of all these channels — on the retailer site, in the physical store, and across relevant content sites — retail media can link the brand’s paid marketing to every sale that happens in the physical store. Omnichannel consistency reinforces the brand message and creates a smoother shopping experience. The hiker feels empowered to make the best purchase, while the outdoor gear shop benefits from increased traffic and sales. Despite the shrinking number of physical locations, the most successful brands will connect the dots, creating easy paths to purchase that acknowledge the modern shopper's nonlinear journey.

Stephen Howard-Sarin is managing director of retail media in the Americas at Criteo, the commerce media platform for the open internet.