The general “democratization” of data has accompanied the maturation of retail media over the past five years. But as store chains and their large marketing partners have recognized the value of first-party data, that promise of level playing field across all brands, verticals, and retailers has remained elusive.
Those smaller retail rivals and marketers that vie for consumer intelligence from the shelf-level and point-of-sale systems aren’t shut out. It just takes a bit more ingenuity to access and activate the waves of customer data that has become more widely, if not totally, available to all advertisers.
Still, it’s worth posing two questions: Is the promise of data democratization being fulfilled, or are we witnessing a widening gap between the data "haves" and "have-nots"? And how can retail rivals and marketers tap into the wider accessibility of consumer data?
The rise of retail media networks has undoubtedly transformed the way brands interact with consumers and access valuable purchase data. However, according to Laura McElhinney, chief data officer of product-focused consultancy MadTech, there's a clear power imbalance at play.
"When you look at large retailers versus smaller retailers, they have a wealth of first-party data and it can appear that they have monopoly power," McElhinney says. “But there are other signals available that allow other retailers and brands to keep pace with the retail media giants.”
In that sense, it's hard to say that retail media networks are necessarily tipping the scale one way or the other for established brands vs. challengers, says Fred Seddon, director and retail media lead at digital marketing consultancy Kepler Group. Yes, for truly startup-level brands, "it's very costly to break into retail media networks until you can pay for the tools and the marketing initiatives that let you compete," Seddon says.
Still, McElhinney and Seddon agree that while retail media networks aren't necessarily creating new disparities, they may be reinforcing existing ones. And the ability to leverage these networks effectively often comes down to resources — both financial and technological.
The divide isn't simply a matter of big versus small. McElhinney points out that even among brands, there's a significant disparity. “When you look at CPG brands, they don't have first-party data. All of their stuff goes through distributors,” she says. This puts CPG brands, regardless of size, at a disadvantage compared to retailers who have direct customer relationships.
Seddon elaborates on this point, noting that the reason for this is that the "haves" in this scenario are those with "their own sizable, actionable and most importantly well-curated first-party data asset." He adds that companies with high sales volumes are naturally positioned to own not just higher volumes of data, but also higher quality data.
The "have-nots," on the other hand, are sometimes smaller brands and sometimes larger brands that happen to be in commoditized categories. Seddon cites the example of batteries, where even big brands like Duracell and Energizer have struggled against Amazon's white-label offerings, demonstrating that size alone doesn't guarantee an advantage.
Interestingly, the divide extends beyond traditional retail. Seddon points out that non-commerce brands, particularly in sectors like financial services, can benefit significantly from retail media network data. "Very few first-party data owners are closer to customers' wallets than retail media networks," he explains, highlighting how this data can be crucial for audience targeting and expansion in sectors far removed from traditional retail.
Despite the challenges, smaller marketers can level the playing field in the retail media landscape.
For Seddon, focusing on niche markets is one solution. He advises smaller brands to identify their unique entry point, suggesting that targeting specific niches within the platforms rather than broad categories can be a more effective strategy. “There's a much clearer path to be ‘number one’ in scent-free laundry detergent pods with kid-proof packaging than there is to be ‘number 10’ in laundry detergent overall," Seddon says. This approach allows smaller players to compete more effectively by carving out their own space within larger markets.
McElhinney, on the other hand, encourages marketers to look beyond traditional first-party data sources and predicts a rise in the importance of second-party data.
To put that in context, where first-party data is the info a company collects directly from its own customers through its own channels — i.e., websites, apps, or in-store purchases — second-party data, on the other hand, is comes from another company’s first-party data that is shared directly through a partnership—such as opted-in, consented access to a consumer’s purchase data in transparently exchange for a service or product.
As demand for first- and second-party data rises, the role of data providers with consented consumer purchase panels are poised to see their relevance inevitably rise as well. These data partners offer their own purchase data across verticals, brands, and retailers and can fill gaps in a brand's ability to view and analyze the customer journey, especially for purchases made outside their own ecosystem.
For smaller marketers, leveraging second-party data can be a game-changer. It allows them to gain insights typically reserved for larger players with extensive first-party data resources. By partnering with data providers or other complementary brands, these marketers can access valuable purchase data that informs more targeted and effective retail media strategies.
It’s all part of the general expansion of alternative purchase data, and as McElhinney suggests, the future of retail media will likely see an increased emphasis on these data collaborations. Brands that can effectively harness second-party data and alternative purchase data will be better positioned to compete in the increasingly complex retail media ecosystem, regardless of their size or resources. These partnerships, McElhinney suggests, could help fill the gaps left by traditional first-party data, especially as privacy concerns continue to shape the industry.
Understanding audiences across retailers is going to be essential in filling in those gaps, adds Seddon. He notes that "Walmart shoppers will look different from Target shoppers, who will look different from Amazon shoppers."
By working with partners that have purchase data across retailers and verticals, marketers actually have a leg up as compared to traditional retail media, which is siloed and requires partnerships with many platforms to get the same level of insight. Plus, the majority of retailers do not have their own retail media networks.
Recognizing the nuances in customer behavior across different retailers can help marketers craft more effective, tailored strategies for each type of shopper. In a larger sense, marketers and the competitive retail landscape will always be shifting. Advantages today don’t necessarily lock in future dominance. So all players should expect new solutions to emerge to address disparities. "I honestly think there's going to be a new business that's going to come in to help fix these signals,” McElhinney says.
