Loyalty vs Retail Media by Sakeb Rashid

In my head, I was getting annoyed seeing how Retail Media became the buzz word across the world of retail. Teams, and even businesses, have been born to operate in this space. Jumping on the bandwagon, I thought. 

Retail Media is just loyalty being leveraged in an alternative manner, a great way to charge suppliers access to my member database using loyalty data to target and personalise across our retail assets and touch points. 

But then I looked at this further, as clearly I was missing something. 

In basic terms, Retail Media is an opportunity to create an additional revenue stream, monetising your data and your touchpoints. 

ChatGPT suggests it is applied to things like Sponsored Products, Onsite Banners, In-store screens, Outdoor activations, and Brand activations. I’d argue you should obviously add CRM into this list. So, find a supplier, tell them you have X members, and find the right members to reach out to, and the right channel or activation, right? 

Still sounds like loyalty, so I kept digging. 

What would success look like? Members spending across the brands you put in front of them, with suppliers paying you for access to them. You could actually drive revenue from both angles as you may drive more sales through your stores, as well as the revenue generated made through selling the opportunity to said supplier. 

Now, if we are to break down loyalty programmes and think about it, then really what we have is a system to drive a desired behaviour.

Loyalty programme exists to influence how members act over time. End goal – loyalty should work as hard as it can to increase customer lifetime value. 

So, different goals and different KPIs. Retail Media is all about CPM, ROAS, revenue, and ‘slot fill’ rate, whereas Loyalty is very customer focused concerned with frequency, retention, and share of wallet, for example. 

Maybe the blurry view of the two then comes because they are both built on the same foundations of:

• First-party data.
• Customer ID and Unified profiles. 
• Shopper behaviour.

This is where the confusion lies. A strong loyalty programme creates the data, while a retail media network monetises it.

But I think this is where Loyalty wins! Loyalty is the fuel for Retail Media to be relevant. 

Without loyalty, you would see anonymous traffic or foot flow, random, weak targeting and segmentations, and a lower rate card (lower CPMs).

With loyalty, you unlock known profiles, known preferences, and predictable behaviour, meaning we can target people that we actually know. In Retail Media terms, your offering is now actually more valuable, meaning you can attract better and charge more. 

So, loyalty doesn’t compare with retail media. It empowers it. Yes, Retail Media does payback into Loyalty so it is not all just take take take, but I am left with the conclusion that Loyalty is still that key to the wider business beyond Marketing, and is foundational to the success of your Retail Media and further strengthening the commercial model of the business. You can also argue that without loyalty principles guiding Retail Media, you run the danger of impacting long-term trust for short-term gain. 

If we are honest, it is a closed loop fly wheel. For retail media to be successful, it needs loyalty. And for loyalty to justify its investment, retail media will play a huge part.