240 retailers all over the world have already introduced their retail media networks (RMNs). This trend has captured businesses of absolutely different categories: brick-and-mortar stores, online-only retailers, small local businesses, and global giants.
In this guide, we’ll research whether investing in a custom retail media platform is worth it or whether off-the-shelf advertising solutions work equally well.
The Need for Custom Retail Media Solutions
The launch of such solutions is a win-win for both retailers and advertisers. Supermarkets, marketplaces, and eCommerce businesses can monetize their digital platforms by selling ad space to brands. At the same time, advertisers gain access to first-party data collected by retailers directly from their customers.
The growing demand for retail media advertising solutions can be attributed to the new opportunities they offer to both retailers and brands. These solutions enable businesses to enhance customer experiences, generate new revenue streams, and run more efficient ad campaigns. RMNs provide the tools necessary to achieve these goals.
Today, the market offers modern off-the-shelf retail media solutions that allow businesses to quickly enter the retail media space. However, it is critical to understand that these platforms often come with significant limitations.
Developing custom software products typically requires more time and investment than implementing ready-made solutions. Nevertheless, it can still be a highly feasible and rewarding option.
Why businesses prefer custom retail media solutions to ready-made solutions?
Need for flexibility and proper customization. Any business has unique needs that generic, one-size-fits-all solutions can’t address. This issue is related to all kinds of tools and apps. Retail media platforms are not an exception. When retailers launch their media networks, they should consider their unique processes and advertising capacities, as well as the specific requirements that brands may have.
Off-the-shelf platforms typically come with pre-configured features and limited room for customization. This makes it difficult for retailers to tailor the solution to their business model, target audience, or advertising goals. As a result, their ability to innovate and stand out in a competitive market will be limited.
Omnichannel integration. Nowadays, brands can establish interaction with consumers across various channels. Thanks to modern digital tools, it is possible to ensure the consistency of consumer experience within the whole ecosystem, from online to in-store shopping. Retail media networks should support an omnichannel strategy to build seamless marketing across all touchpoints.
However, many off-the-shelf retail media platforms are designed exclusively for traditional digital channels like mobile apps and websites. As a result, they may not be able to provide the possibility to integrate with physical store advertising or email campaigns. This can negatively affect omnichannel engagement and, consequently, consumer experience.
Efficient work with first-party data. One of the central values of retail media network solutions is access to first-party data. Instead of relying on third-party cookies, brands, and advertisers can leverage the benefits of data that retailers can get directly from consumers. This approach enables more precise customer targeting and personalization.
With ready-made solutions, retailers can only sometimes leverage the full potential of their first-party data. This happens due to the lack of deep integration with the retailer’s customer data systems and can result in missed opportunities for personalized marketing, customer segmentation, and audience targeting.
Variety of advertising format options. Boring and monotonous ads are more likely to repel customers than attract them. That’s why brands continuously seek new, diverse, and engaging ad formats. Dynamic ads, interactive content, premium search results, and video ads are just a small part of all the opinions a custom retail media platform can offer.
Off-the-shelf solutions often come with a limited selection of standard ad formats. Retailers and advertisers are frequently restricted to basic ad types like banner ads. Some platforms do not provide any flexibility to create innovative or customized advertising experiences. This can significantly reduce ad performance.
Good opportunity to differentiate from competitors. In such a crowded retail industry, differentiation is essential for attracting advertisers and maintaining customer loyalty. Ready-made retail media platforms are widely available. This means multiple retailers can opt for identical systems with little room for customization.
Given this, it can become very challenging for retailers to offer unique or innovative advertising opportunities. When retailers cannot set themselves apart from competitors, this can lead to reduced interest from the side of brands.
Freedom and independence from vendor’s decisions. Ready-made solutions are often proprietary. This makes retailers dependent on the vendor for updates, support, and enhancements. As a result, retailers frequently can’t adjust their networks quickly in response to changing market demands. This reduces control over their retail media strategy. Moreover, if a vendor decides to cease the support for the software one day, retailers may face serious problems.
Won’t you get anything of this with ready-made software? Well, it depends. Some off-the-shelf solutions offer much more flexibility and customization freedom than others. That’s why, before making a final decision, we always recommend that retailers analyze various options in the context of their unique needs.
Now, let’s consider the undeniable advantages of building a custom retail media platform for your business in more detail.
Advantages of Building a Custom Retail Media Platform
Integration capabilities
The integration capabilities of a custom retail media network are one of the strongest arguments for creating your solution instead of choosing an off-the-shelf product.
Custom retail media networks provide the flexibility to unite various internal and external tools into one system regardless of the integration complexity.
What are the key integrations for building an effective RMN?
CRM integration. You can leverage rich customer data by integrating your retail media network with a custom relationship management system. You can efficiently synchronize customer profiles and purchase history and create detailed audience segments for more precise ad targeting. Moreover, you can adjust campaigns on customer behavior in real time thanks to monitoring customer journeys across multiple touchpoints.
ERP integration. Enterprise resource planning systems traditionally help retailers manage their backend operations, such as inventory, sales, and supply chain processes. With this integration, you can ensure that your retail media efforts fully align with your operational realities. For example, thanks to real-time updates on product availability, you can enable dynamic ad placement for in-stock products. With relevant sales and inventory data, you can update promotions based on current supply levels. The same insights can be valuable for dynamic pricing as well.
DMP integration. Data management platforms are essential for managing and analyzing customer data. This helps to create better audience segments and personalized campaigns. Combining first-party data with available third-party data lets you get more detailed customer profiles and audience insights. Such integration will allow you to ensure the support of data-driven ad bidding and programmatic advertising strategies by your custom retail media platform.
Marketing automation software integration. Integrating such platforms will allow you to automate campaign workflows and deliver personalized ads and promotional offers. You will be able to streamline the management of campaigns and reduce the time and effort required for their execution.
Integration of payment gateways and financial software. Integrating such tools can significantly facilitate using your platform for brands and CPG (Consumer Packaged Goods) companies. When an RMN is integrated with a payment gateway, advertisers can pay for ad campaigns directly through the platform. This reduces manual processing and minimizes the risk of errors. Meanwhile, financial software can allow automated generation and delivery of invoices to advertisers to streamline the billing process.
Another case where the integration of such solutions will be of great use is the implementation of shoppable ads. This format presupposes that people can immediately buy advertised items while browsing a retailer’s website. Users can simply click the ad to be directed to a product page where they can complete the purchase. This is not only very convenient for customers but also valuable for businesses. This integration lets the retail media platform track all ad-to-purchase experiences and conversions. This data can be used for ad campaign evaluation and personalized recommendations in future sessions.
Social media integration. By integrating with external social media, you can significantly expand the reach of ad messages, allow for cross-platform advertising, and improve engagement. You can also ensure the synchronization of campaigns across social media and your retail media network, guaranteeing better messaging consistency and customer targeting. Another advantage of such efforts is ad retargeting. You can link customer interactions from external platforms to your retail media network.
Integrating these critical business systems can help optimize ad targeting, automate processes, and maximize the ROI (Return on investments). Moreover, such custom integrations can also ensure scalability, adaptability, and long-term growth.
Performance and scalability
The performance and scalability of retail media solutions are crucial factors that determine their effectiveness. These criteria become particularly important when retailers grow and their platforms face increased demand.
The problem with many off-the-shelf solutions is that they just have a fixed level of maximum loads they can cope with. As a result, when your retail media activities evolve and your software faces an extra number of users, transactions, or ad inquiries, it simply can’t handle them.
Possible consequences of using ready-made retail media solutions:
Downtimes;
Software freezing;
Failed operations that can lead to data loss or errors;
Financial impact due to missed sales opportunities;
Lost trust and reputational damage.
How to Build a Scalable Retail Media Solution?
A well-designed custom retail media network solution should be built with scalability in mind.
At Geomotiv, we typically opt for cloud infrastructure and modular architecture. Cloud infrastructure allows resources to be automatically allocated as traffic increases, and existing servers can be upgraded to handle more workload.
In turn, a modular architecture presupposes a solution being broken down into smaller, self-contained components. Each module in such architecture is responsible for a specific function. For example, there can be separate components for payment processing, user authentication, ad delivery, etc. Each of them can be scaled individually on-demand without affecting other system parts. As a result, instead of scaling the entire application, we can work only on the modules that experience high traffic or demand. This allows us to reduce the time needed for various tasks and optimize the cost of maintenance and support services for our clients.
Moreover, in a modular architecture, we can ensure load balancing. It plays a significant role in distributing workloads across various instances of modules. As a result, modules stay calm. This dynamic load distribution allows your platform to scale efficiently during peak traffic.
Of course, proper scalability is an essential component of stable performance. But what are other essential things for high performance, especially when handling large volumes of real-time data, customer interactions, and complex advertising campaigns?
Key Strategies and Technologies for Ensuring High Performance
Efficient data processing. Retail media networks process vast amounts of data from multiple sources. That’s why ensuring quick and accurate data processing for delivering personalized ads or offering dynamic pricing is vital. High-performance custom solutions rely on distributed computing frameworks like Apache Kafka or Apache Spark. These frameworks can enable them to handle stream processing of massive data flows in real-time.
Optimized ad targeting algorithms. Accurate ad targeting is a key to the success of retail media networks. Complex algorithms must analyze vast amounts of data to match the right ad with the right customer at the right time. Such processes can be time-consuming, so it is crucial to optimize custom solutions for speed. Modern custom retail media networks employ ML and AI models. These models are trained to optimize ad delivery based on user behavior, past purchases, and other parameters.
Content delivery optimization. Reducing the time needed to deliver ads, product images, and other media content is critical to keeping users engaged. Slow-loading ads can lead to poor user experiences and low ad effectiveness. Custom RMNs can rely on CDNs (content delivery networks) to store content close to the end user, which will minimize load times. Additionally, optimizing media formats can also reduce the initial load time.
Edge computing. Retail media networks launched by big retailers often serve a global audience. This can lead to latency issues when data is processed far from the end user. Edge computing brings processing power closer to the user and helps to decrease latency. This approach involves distributing data processing across multiple locations closer to where the data is generated or consumed. This enables faster local processing of ads and customer data.
Asynchronous processing. Not all operations are time-critical. For example, tasks such as data synchronization or reporting often belong to this category. Given this, they can be processed in the background. Systems can deal with non-critical functions in parallel with real-time operations. Thanks to this, improving overall performance and avoiding delaying real-time tasks like ad serving or user interactions is possible.
Data Management and Analytics
Data management and analytics drive the decision-making processes behind ad targeting, performance optimization, and customer insights.
Custom-built networks can offer advanced capabilities for working with massive amounts of data from various sources and transforming them into insightful reports based on your needs.
What needs to be done for efficient management of your RMN’s analytics:
Data collection. Retail media networks need to aggregate data from multiple sources. The required data can come from customer interactions, advertising platforms, third-party data providers, product inventory systems, etc. APIs and direct database connections allow data from various places and sources to flow seamlessly into a central data warehouse or data lake.
Real-time data processing. The ability to process data in real-time enables instant ad delivery and personalization. Real-time analytics also allow advertisers to adjust their strategies on the fly.
Data storage. Modern RMNs should be designed to store vast amounts of data of different types. Such data must be kept securely and should be easily accessible for analytics. Very often, custom solutions today rely on distributed databases or data lakes for large-scale data storage.
Use of customer data platforms (CDPs). For efficient ad targeting, it is necessary to understand individual customer behavior and preferences. A CDP can collect, unify, and organize customer data from various sources to provide a 360-degree view of each customer.
Data privacy and security. Retail media networks handle sensitive customer data. That’s why maintaining data privacy and security is a top priority, as well as compliance with regulations like GDPR and CCPA. It is recommended that retailers introduce role-based data access control. This can ensure that only authorized employees or systems can access it.
Personalization and Omnichannel Engagement
Personalization is essential for capturing customer attention and improving the relevance of ads. Only when people see that the ad corresponds to their interests you can expect to see their high engagement and conversion rates.
A custom RMN can have everything necessary to ensure a proper level of ad personalization.
Advanced customer segmentation. Effective personalization starts with understanding different customer segments and delivering relevant messaging. AI-powered segmentation can automatically identify hidden patterns and create segments that might not be obvious through traditional analysis. Such a granular approach enables advertisers to tailor their content to particular customer groups. For example, they can address first-time buyers, repeat customers, or people interested in specific product categories.
Highly personalized ad experience. Custom retail media networks can work with data such as past purchase history, browsing behavior, demographics, and location to deliver real-time customized ads. ML algorithms and AI models analyze such data to predict customer preferences and recommend products or services most likely to appeal to each individual.
Cross-channel personalization. Customers interact with brands across various touchpoints. Delivering personalized and consistent messaging across all these channels enhances engagement. For example, suppose people browse a product on a website but haven’t purchased it. In that case, they may receive a retargeting ad on social media, a personalized email offer, or a push notification via a mobile app.
Omnichannel engagement. This is achieved through real-time data synchronization and marketing automation platforms. For instance, if customers receive some particular offers via email, the exact offers should be visible when they log into the retailer’s app or website.
Customer loyalty programs. Such an approach to building loyalty programs helps establish deeper relationships with customers and drive online and in-store engagement. Custom retail media solutions can analyze a customer’s purchase history to provide relevant loyalty points, discounts, or exclusive offers, which can be redeemed online or in physical stores.
See our bespoke software development approach in action. With a wealth of experience in retail media and AdTech we are fully equipped to meet your unique needs.
Custom RMN development brings higher ROI. Such software is less expensive to maintain even though it requires significant investment at first compared to off-the-shelf products.
With all the features and correspondence to retailers’ needs, custom solutions can consistently demonstrate high efficiency and let you get significant profit.
They provide a more flexible and scalable approach. You’ll get deeper integration with business systems, better control over the collected data, and higher performance compared to off-the-shelf options.
The quality, security, reliability, and functionality of your retail media platform will be among the key factors that advertisers and brands will evaluate when choosing a retailer to cooperate with.
The launch of such a solution will help you create a successful complementary service on your marketplace that will generate steady revenue and strengthen your business reputation.
For complete success, you need to have seasoned professionals like Geomotiv to leverage all the advantages of custom development. Our specialists have a deep understanding of the retail media market, solid technical skills, and high-level expertise in the AdTech domain.
