What challenges do we face as e-retail media take off?
Virginie Chollois, marketing and communications manager at Lucky Cart, explains in an article for LSA how retailers can make the most of e-retail media, the advertising devices on and off their sites that are created and targeted using their data.
Faced with health risks, geopolitical tensions, unstable supply chains, ongoing inflation, a possible recession and a general decline in household spending, retail players have been going through a rather tough period for some time now, forcing them to reinvent the way they communicate. Innovation, among other things, has been the key response to these major changes. This disruption has also brought creativity, mainly through digital transformation, omnichannel experiences, artificial intelligence…
Digital marketing is becoming a key element in the development of e-retail for every manufacturer, retailer and brand, in order to optimize the shopper experience. And this is all the more true today with the announced end of the leaflet, a major change for supermarket chains since, let’s not forget, the leaflet is the leading medium for driving traffic to points of sale. The challenge today is considerable: to find the key alternative to paper leaflets that will, in the short and medium term, drive as much traffic and sales. E-retail media is a very serious alternative. The explosion of digital advertising has had a significant impact on e-retail. Online advertising expenditure now represents 43% of the total advertising budget, according to Fevad, which has led e-retailers to invest more in digital marketing to remain competitive.
Drive maximum consumer traffic to digital
In 2020, the drive-thru represented only 8.3% of the food trade. In other words, there is still a significant number of consumers who never come to the drive or home delivery. So the first challenge is to get as many consumers as possible to go digital. For some consumers, mobile applications require a great deal of effort, if only to download them. Yet this is one of the ways in which retailers will be able to communicate with their inserts in the short term. This is where retailers will issue their personalized addresses.
Unlike flyers, which reached out to everyone, e-retail media must address the digital shopper through ultra-personalized messages: they must now be able to adapt to what the customer wants and to their purchase history, to create a feeling of closeness between the retailer, the brand and the customer. For ultra-personalization to take place, the e-retailer needs to know the types of products consumed by the shopper, the frequency of his purchases and visits to the point of sale, etc. It’s a question of getting the customer to accept the message. It’s a question of getting the customer to accept that he’s giving data all the time, so as to be able to transmit ultra-relevant information in return. One of the main challenges is therefore to implement an educational approach, without being anxiety-provoking, in order to explain the need to collect this data and to highlight the resulting benefits.
The e-retail sector faces a number of challenges in the years ahead. First and foremost, data cybersecurity. Online security is a major challenge for e-retailers and consumers alike. Complying with European regulations and taking all the necessary steps to ensure that data is completely secure is a daily challenge for every market player.
The other challenge is competition. The multiplicity of players makes it difficult to synthesize the market and, as a result, the offer is undoubtedly a little too broad for the shopper. So we need to find ways of standing out from the crowd by offering a value proposition that is differentiating, enriching and modern.
Efficient store digitalization
Another major challenge is the digitalization of stores, especially in the retail sector. The two sales channels each provide a specific customer experience. The aim of omnichannel strategy and retail digitalization is therefore to reenchant the customer journey, both in-store and online. Retailers will be able to offer a unique experience thanks to digital tools that promote communication and complementarity between the two channels. The best example of this is the digitization of leaflets: as the /Bonial Barometer published at the start of 2023 shows, for 82% of retailers this is a priority issue.
AI, a major element in the future of e-retail
Current trends to watch out for in e-retail include the use of artificial intelligence to personalize the shopping experience in real time based on their buying behavior, augmented reality to make the shopping experience even more immersive and help customers visualize products, and the use of chatbots to improve customer service. E-retailers need to be on top of these trends to stay competitive. We’re not in a science-fiction movie, but in our world, in our everyday lives, and the innovations mentioned above are already just a click away.
More than just a trend, e-retail has become a real necessity for manufacturers and retailers. It enables brands and e-retailers to reach a wider audience than ever before, one that they would never have been able to reach otherwise. Over and above the economic advantages that e-retail offers, it enables us to maintain and strengthen the links between players and consumers, who are constantly evolving, and to gain a better understanding of their customers and their purchasing behavior, thanks to the data collected during past and current transactions.
About the author
With 20 years’ experience in the world of communications and marketing, Virginie Chollois has worked with such well-known names as EDF, Société Générale, Pizza Hut, Carrefour and the Ma vie en couleurs CRM program. She joined e-retail media specialist Lucky cart as Senior Marketing & Communication Manager in February 2022.