These days, shopping online is synonymous with better prices, convenience, more selection, and access to peer to peer ratings and reviews. eRetailer websites have become the go-to places not only for online shopping but also for product information. These days, 55% of online shoppers start their product searches on eRetailer pages, while only 28% start on search engines. As a consequence, top eRetailers have become powerful search engines, and most reach a massive audience: over two thirds of the entire U.S. population visit an eRetailer website every month.
A few years ago, eRetailers started leveraging advertising on their websites to drive impulse purchase of their product assortment and increase basket size among their shoppers. As online shopping became more popular and their audience grew, eRetailers recognized the potential of Retail Digital Media for manufacturers and for themselves. Retailers started to push manufacturers to buy digital media space to support the commercial initiatives heroeing their brands and increase conversion into online sales. Thus, Retail Digital Media has become an additional revenue stream for eRetailers and has increased their negotiating power with manufacturers.
In this post, we define Retail Digital Media (RDM), a new vehicle of growth for eRetailers and brands who want to accelerate their eBusiness.
WHAT IS RDM?
RDM is a type of digital advertising that supports brands and their trade activities at a specific eRetailer. It targets shoppers with the objective of increasing sales at the eRetailer. It can support several types of commercial initiatives such as announcing new product launches or supporting the existing business. Unlike traditional digital advertising, Retail Digital Media always involves a specific eRetailer and ultimately aims at driving conversion on their platform.
The most basic form of Retail Digital Media is a banner on the Retailer.com, but it can also be a Facebook ad that drives traffic to the product detail page in the eRetailer.
RDM IS DIGITAL ADVERTISING’S BEST KEPT SECRET
Retail Digital Media serves the same purpose as offline point of sales material does in retail stores, to increase visibility and sales of the promoted brand. For this reason, RDM is also referred to as online Point of Sale material.
RDM has proven its worth as an enabler for driving online sales. First, it can reach a massive audience. Second, it can positively impact purchase intent. Research has shown that shoppers who view an ad in an eRetailer.com are more likely to make a purchase than if they saw the same ad somewhere else, like on a news website. Third, it also impacts offline sales, as over 56% of total sales in-store are influenced by online search and 2/3 of shoppers initiate this research on retail websites, not Google .
RDM works because it targets shoppers in the right context and when they are most receptive, during their online shopping trip. Moreover, advertisers can create a slate of customized RDM ads to deliver the right message to the customer depending on where they are along the path to purchase, making RDM even more effective.
For the shopper, it provides a more personalized and rewarding shopping experience, as eRetailers have the capability to target ads based on previous shopping trips.
FACING RDM’S CHALLENGES HEAD ON
Despite its upside, RDM is nevertheless an under-utilized tool in the advertiser’s arsenal. For manufacturers, executing a successful RDM campaign requires a multi-prong approach. Some of the challenges include:
- Having an effective governance process that clearly outlines roles and responsibilities for each function in the organization.
- Engaging in strategic negotiations with eRetailers with a clear understanding of best practices and how to choose the most promising top eRetailer to partner with.
- Understanding the fundamentals of building an RDM communication strategy and how to select the most effective placements and formats to bring it to life.
- Understanding how to create assets that succeed in the crowded eRetailing environment.
- Defining the relevant key performance indicators and being able to convince eRetailers to adopt media sales houses’ standards to track and share data.
Implementing RDM requires a strategic approach, insight into buying behavior and a deep understanding of shopper needs. Nevertheless, investing resources and capability in RDM is worthwhile, as it can be a game changer for both brands and eRetailers. Armed with that knowledge, RDM assets can be a high ROI investment vehicle for many brands.
Many manufacturers have started realizing this, and the firsts ones to know how to combine sales, marketing and media skills will be able to fully embrace this opportunity and gain a competitive advantage over time.
Authors: Niloo Farmand, Alexia André
 Recode.net, “55 percent of online shoppers start their product searches on Amazon”; 27 September 2016
 Statista, monthly unique visitors to US retail websites, July 2016
 According to a BaazarVoice Wakefield study, 21% of shoppers are more likely to buy a product after being exposed to an ad on an eRetailer site versus the same ad on a content-provider website; 23 October 2013
 Forrester, 2016
 Deloitte, “New Digital Divide: The Future of Digital Influence in Retail” September 2016
 market tree research 2015, on 600 shoppers