As retail media grows, so does the the level of innovation taking place within Retail Media Networks.
RMNs are bringing new propositions to the market as stores digitise, onsite adtech evolves at pace and clean rooms and CDPs make it easy to understand and reach key audience segments.
What's moving at a much slower pace is innovative thinking within Brands and Agencies many of whom are stuck with a broken operating model.
Brands mostly understand that physical availability (distribution, shelf and off shelf presence) is a growth driver and that it goes hand in hand with mental availability (awareness, memorableness, distinctiveness) .
But they separate these tasks between Commercial teams (physical availability) and Marketing teams (mental availability).
The Commercial teams are given budgets to drive presence, promotions and short term sales and marketeers are given budgets to grow "brand".
Commercial teams mostly deal with retailers (and by default, RMNs), whereas marketers tend to focus on shoppers, consumers/customers. Marketeers delegate many key tasks to media agencies including when and where to spend the ad money.
This way of operating creates organisational complications and with that comes a loss of focus on what truly matters to drive growth.
The two key drivers of growth (physical and mental availability) must operate in sync and the key measure of growth, and the focus for the organisation, must be new customer acquisition.
Sales and market share growth is a function of existing customers buying more and new customers buying for the first time.
But it's the latter that drives the former whereas the reverse is not true.
It's not easy to acquire new customers but this must be the focus for Brand owners as the by product will be existing customers buying more (if you need scientific proof of this please read "How Brands Grow" by Byron Sharp)
Commercial teams focus on short term growth is very ofter misplaced or misdirected. Very few Commercial teams track penetration or first purchases/new customers and so they often spend, unknowingly on the wrong things.
Similarly for Marketeers/Agencies , they tend to focus on vague brand measures via media channels selected by outdated (marketing mix) models that ignore how and where first purchases occur and although they will typically measure penetration (new customer growth) this is very often only at a market level.
There is very little understanding of what combination of (physical and mental availability driving) activities contributed to penetration growth and very little attempt to understand first purchasers, their motivations and whereabouts.
But the whereabouts matter because almost always these whereabouts will be inside a shop or on a retailer's website.
And here's where retail media trumps all other media.
It uniquely combines whereabouts (physical availability) with an ability to impact mental availability.
It can also identify the first time someone buys a product and can measure the impact this has has on penetration growth.
It can track defecting customers and can identify why customers behaved as they did.
It can help Brands to understand and reach defecters, prospects and repeat purchasers with a variety of channels and messaging options.
No other media can do this.
Winning brands will be those who fully embrace this Growth Framework and adapt their Commercial and Marketing objectives /KPls/kras to focus on new customer acquisition not just at a market level but by channel and by retailer and then make the necessary organisational redesign to achieve it.
This means creating specialist retail media teams that understand how physical and mental availability operating in sync, combined with creative messaging aimed at key prospects and backed by insights into where and what drives first purchases, and empowering them to succeed.
Retail Media Networks that show Brands that they can deliver new customer/brand penetration growth will receive disproportionate investment.
If they can do this at scale both they and the Brands will win big time.
There is a place for campaign reports that focus on sales uplifts, for cpm and ctr comparisons, for roas and incremental roas.
But there is no substitute for focusing on and measuring new customer growth.
