Retail media networks (RMNs) are growing at an incredible pace set to generate more than $46 billion in revenue in 2023, and a predicted $89 billion by 2026.
Powered by first party data, RMNs exist predominantly in the digital space where most of the revenue is driven by ads on the retailer's website and off-site media channels like Facebook and Connected TV (CTV). Consumer packaged goods (CPG) companies leverage this data to target ads to specific consumers at the point of purchase decision based on demographics, location and prior purchase behavior.
Today, there are more than 100 RMNs worldwide and growing daily across multiple categories, including mass retail, grocery, chain drug and home improvement. Forty percent of U.S. retailers have RMNs. Amazon leads the pack with 75% market share, followed by Walmart, Target and Kroger.
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In addition to the digital play, many brick-and-mortar retailers have built or are planning to build RMNs inside physical stores. This is the next frontier for retail media with enormous potential due to the sheer number of shoppers that still shop in physical stores. In-store RMNs have demonstrated the ability to enhance the shopper experience, drive sales and increase brand loyalty.
In-store RMNs consist of screens and floor projection solutions strategically placed across the store and connected to networked media players. Content programming is centrally managed by an RMN content management system (CMS) that enables highly scalable, micro-targeted delivery of content to each media player, and provides proof-of-play reports post-campaign to show campaign performance across the network.
Retailers either choose to build internal teams and platforms to manage media sales or use third party monetization platforms from companies like CitrusAd or Criteo. In-store RMN CMS systems typically include inventory management capabilities so ad buys and inventory availability can be tracked across the network. Some RMN CMS systems, such as Wovenmedia's, are also integrated with programmatic demand side platforms (DSPs) like Place Exchange and Vistar Media, allowing retailers to carve out ad inventory for private marketplace auctions.
Convenience stores have lagged behind other segments in developing RMNs. This is surprising because c-stores have key characteristics that make them excellent candidates for highly effective RMNs especially in physical stores. Notably,
- C-store sales are driven by impulse, immediate consumption (IC) purchases. IC shoppers are typically looking for inspiration during the shopping trip, like meal and snack ideas. This gives c-stores a compelling opportunity to use screens to impact purchase behavior during the trip.
- C-store products are sold in smaller packages vs. grocery or mass retail. This is attractive to CPG advertisers who want to market test new products before committing to scaling packaging and distribution. According to a survey by NCSolutions, 71% of shoppers say they discover new products and brands in c-stores.
- C-store shoppers predominantly shop in-store vs. online, primarily because c-stores are more convenient to access than larger format stores. In the same survey, NCSolutions found 65% of American consumers cited location as the number one reason to visit a c-store. Fuel also drives more in-store visits.
- C-stores usually have robust loyalty programs that can be leveraged by advertisers to target specific consumer groups.
These factors give c-stores a competitive advantage over other retail segments when it comes to accessing CPG ad budgets and over the last two years we have seen c-stores starting to play catch-up in the RMN space.
The first major entrant adjacent to c-stores was the quick commerce delivery service Gopuff who launched its RMN Gopuff Ads, in late 2021. Gopuff Ads initially offered sponsored search on its digital platforms, then added offsite ads and recently expanded to non-endemic advertisers like Hulu and Noom.
In late 2022, 7-Eleven Inc. launched the first c-store RMN, Gulp Media Network (80 million loyalty members). With more than 12,800 U.S .stores, 7-Eleven's geographic reach is larger than Walmart, Target and Kroger combined. The company has stated that the ultimate focus for the network is to drive people to brick-and-mortar stores.
In early 2023, Casey's launched its RMN Casey's Access (6.5 million loyalty members). In the announcement Casey's said, "Through Casey's Access, brands will be able to target customers visiting Casey's more than 2,400 stores across 16 states; … with in-store, online and at-pump opportunities for consumers to transact."
Retail media is also growing with gas and electric vehicle charging stations. In March 2023, Shell acquired Volta Inc. with a network of more than 5,000 screens across the country – Volta Media. In the announcement Shell stated, "Beyond providing a charging service, Volta specializes in generating advertising revenues from screens embedded into the charge point."
And, recently Dover Fueling Solutions launched, DX Promote dubbed a "new industry-leading managed media service" designed to display ads on gas pump screens to "drive in-store foot traffic and boost bottom lines."
RMNs are a high-margin business that make a significant contribution to a retailer's bottom line. As the in-store retail media industry continues to mature, broader adoption of technologies that support AI-driven audience measurement, personalization and connecting physical to digital experiences will make these networks even more attractive to advertisers. Now is the time for c-store operators to jump in and build out these networks that are such a great fit for the industry.
Susie Opare-Abetia is the founder and CEO of Wovenmedia, an in-store retail media solutions provider. Opare-Abetia can be reached at [email protected].
Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.