Artificial intelligence (AI) is helping brands and retailers to reap the benefits of the retail media boom in a way that was not possible before.
Retailers and brands previously had no option but to work with large ‘Big Tech’ players like Amazon and Google, which offered closed ‘walled garden’ ecosystems, meaning that retailers missed out and brands had too little visibility into how ads were performing. Today, AI-driven retail media infrastructure is offering brands and advertisers unheard of levels of efficiency and return on investment (ROI) with AI-driven ad auctions and seamless media buying allowing retailers of all shapes and sizes to enjoy the retail media boom.
So why is AI so important? AI-driven ad platforms are helping to boost transparency and offer improved attribution, and simply ensure that ads come in at the right time and in the right place. AI is already delivering results in making ad buying more efficient, automating campaign optimization and improving reporting and attribution.
AI is transforming retail media by matching ads with the highest likelihood to perform, using real-time signals like page context, shopper behavior and historical performance to drive smarter, more efficient campaigns. In ad auctions, AI ensures that ads are not only placed where they will deliver the most value for advertisers, while also being transparent for brands and advertisers.
Across the industry, artificial intelligence is helping smaller players compete, and making retail media make sense for all, rather than a chosen view. AI is removing the historical barriers to entry and increasing ROI for retailers of any size. Companies are no longer forced to rely on expensive in-house ad tech stacks and legacy systems, with new AI-driven retail media systems offering brands and agencies a transparent way to scale alongside their customers.
AI is transforming retail media from little more than a static ad channel into an automated and AI-powered system. Rather than relying on manual bidding, AI models analyze shopping intent in real time to personalize content and optimize ad placements – enabling retailers to monetize and brands to enjoy real-time attribution that drives sales.
Solving Problems with AI
In the past, advertisers and brands have faced issues within retail media that are extremely difficult to solve without the help of artificial intelligence. For example, if you’re a brand wanting to target multiple retail media networks, you might find that a single stock keeping unit (SKU) is labelled differently across each one.
In fact, it’s entirely possible that a single product can be labelled in thousands of different ways across self-service catalogues, distributors and networks. AI can intelligently boost labelling, cutting the need for manual intervention. This in turn offers brands an easier way to scale their media offering across retail media surfaces.
Improving Transparency
Across the industry, AI-powered platforms are allowing advertisers a new way to measure ROAS and monetize directly without relying on middlemen. AI is helping retailers to launch their own retail media business within days and helping to reduce fragmentation and simplify advertising. It’s also offering increased transparency and attribution, helping brands understand what is working in real time, how and why decisions are made, improving trust, and empowering smarter media buying.
Forward-thinking players in this sector are realizing that most retailers are no longer shopping for their first retail media platform, and offering AI-enhanced platforms which can evolve with them and offer incremental value. Retailers have an enormous amount of first-party data at their fingertips. Data science is helping retailers to take advantage of this, and offering a space where they can break down and exhaustively test what they are doing in everything from auto-bidding to quality scoring.
The Omnichannel Experience
For retailers, artificial intelligence is also helping to truly blend the worlds of physical shopping and e-commerce, making sense of in-store data to deliver a truly omnichannel shopping experience for customers whether they are online or offline. While it’s been traditional to think that e-commerce is the future of retail, research by PwC has shown that nearly half of shoppers (46%) still value the opportunity to see and touch products.
Previously, in-store retail media technology often focused simply on getting the right advert to the right screen at the right time, whereas the truly important part is collecting data from inside the stores. By (for example) collecting Bluetooth signals via beacons to work out foot traffic, retailers can then use machine learning to virtualize those aisles, turning them into categories and make predictions.
In stores, AI is also helping retailers to personalize promotions and modernize inventory management, enabling innovative ideas such as AI-powered shopping carts which further blend the online and offline shopping experience. Retailer ALDI is testing these in Austrian stores, allowing shoppers to use these ‘Caper Carts’ to scan items, track how much they have spent and check out in a seamless and frictionless way.
The Shop of the Future
Artificial intelligence is reshaping the whole landscape for retail media and helping to build the shop of the future. AI is breaking down the barriers for smaller retailers, giving them the option to monetize their rich stores of first-party data without relying on middlemen. More than this, AI is helping retailers to tap into the data within their stores, blending physical and digital shopping to deliver a new and unparalleled shopping experience.
