In-store retail media is exploding, opening up a new high-margin revenue stream

Retail media is on track to become the fastest growing media category globally, and the biggest change is happening not online but in-store. According to a new report from EMARKETER, the area is now growing at over 24 percent per year and is expected to surpass $1 billion before the end of the decade. Christian Bönnelyche, senior advisor at BizLab, believes that this is the biggest shift in physical retail in over twenty years.

Retail media is changing the playing field for physical retail

Traditionally, physical retail has focused on selling products, space and promotions in stores. Now the playing field is changing rapidly. Retail media in stores is no longer about exposing products, but about selling reach, target groups and measurable conversion. This creates a new type of business model where margins are significantly higher than in classic retail.

Christian Bönnelyche explains that advertisers are ready to shift large parts of their investments from Google, Meta and traditional media if physical retail can offer the same type of data quality, transparency and measurability. He highlights that retail now has a unique opportunity to position itself as a modern media channel with great advantages.

Retail media is growing fastest in physical stores

The report from EMARKETER shows that retail media is now growing faster in physical stores than online. What was previously seen as a static environment is now evolving into a data-driven communication platform. The growth is driven by retail chains investing in digital displays, audience-driven content and customer activation based on real-time data.

Physical retail today can offer something that many digital channels lack, namely proximity to the purchase opportunity. A customer who is reached by a message in a store is already in an active purchasing journey and the conversion rate is therefore high.

AI makes in-store retail media measurable and scalable

The major technological developments are taking place through AI and advanced analysis platforms such as BizLab FLOW. For the first time, stores can measure which target groups are moving around the store environment in real time. This includes gender, age category, behavioral reactions and interaction with messages on digital surfaces.

Christian highlights that it is precisely this type of data-driven insights that makes in-store retail media so attractive to advertisers. If physical retail can deliver the same type of precision and measurability as digital platforms, they become a natural complement and in many cases a more effective channel.

Advertisers want to buy entire buying journeys, not individual channels

One of the most important the insights in EMARKETER's report is that advertisers no longer want to buy individual channels. Instead, they want to buy entire buying journeys, where digital and physical touchpoints are integrated into a cohesive strategy.

To succeed, retailers must coordinate

• Digital touchpoints such as e-commerce, apps, CRM and social media
• Physical touchpoints such as digital screens, targeted messages and activation areas in stores

It is the combination of these two worlds that makes retail media powerful and attractive for brands that want to reach the right target audience at the right time.

Physical retail gains a competitive advantage for the first time in 20 years

Many years ago, physical retail lost significant ground to e-commerce, mainly due to a lack of data. Now the trend is turning. Stores have something that digital platforms cannot offer, namely proximity to the customer's final decision.

Christian believes that the conditions are in place

• Many relevant visitors in store
• Local trust and strong customer relationships
• Direct proximity to the moment of purchase
• Data insights that were previously missing

Together, this creates an opportunity for retail to take back the initiative and build a new business model with very high profitability.

Retailers need to start thinking like modern media houses

To succeed, a new mindset is required. Retailers must stop selling space and instead sell target groups, reach and contacts. Christian Bönnelyche emphasizes that the technology already exists and that it is a matter of which players take the first step.

The retailers that establish a professional media product the fastest will not only strengthen their position but also open up a whole new revenue stream with very high margins.

Retail media is the next big opportunity for Swedish and Nordic retail

In-store retail media will grow rapidly in the Nordics in the coming years. Chains that invest early in technology, data collection and integrated media solutions will gain a significant advantage and be able to compete directly with the largest digital players.