Marketer's Toolkit: The rise of retail media and what it means

Retail media is now the fourth-largest advertising medium with ad spend forecast to reach $121.9bn globally in 2023, according to a new WARC report, The Marketer’s Toolkit 2023: Future of Digital Commerce. 

Why it matters

Based on exclusive data from WARC and findings from a global survey of 1,700+ marketers, the report is a guide to focus, survive and thrive in e-commerce during the year ahead when this channel will not just be a section of the retail picture, but a defining element of its composition. 

The Future of Digital Commerce report, part of WARC’s annual Marketer’s Toolkit, explores the intersection of marketing and commerce by examining the future of digital commerce as it relates to brand marketers, their agencies and their retail partners. 

Takeaways 

• A step change in retail media is coming 

Retail media is now the fourth-largest advertising media: ad spend has more than doubled during 2019-2022, overtaking audio, OOH & cinema, publishing and OTT/streaming, according to WARC survey data. By 2025, if the retail media industry follows its current path, it will become more valuable to advertisers than linear TV.

In doing so, it will be playing an outsized role in the shaping of Digital Commerce: the growth of retail media is positioned to do for the 2020s what search-powered digital advertising growth did for the 2000s and social media did for 2010s. Brands will need to go beyond understanding the platforms, to mastering how they can use them to connect with consumers.

• Retail media is altering organizational structures 

Brand owners are breaking down silos and evolving legacy staffing models to reflect the expertise, experience and flexibility needed to win in the dynamic, ultra-competitive digital commerce space. We’re seeing a more “decentralized” approach to organizational structure, as e-commerce is incorporated across businesses, rather than remaining a separate, siloed section. 

Now, as brand and trade budgets pour into retail media, there is an increased need for alignment between e-commerce and marketing teams. However, the challenge is not just bringing people together, it’s ensuring the metrics and KPIs they share are correct and optimized.

• TikTok is driving social commerce 

In Southeast Asia, where social media is the primary channel for new product discovery, consideration, set building and product research, social commerce already accounts for nearly half of e-commerce sales. Globally, high rates of mobile penetration and demographics with an affinity for social media will help social commerce reach $660bn globally by 2025, more than double the current figure, according to data from SJC Marketing. 

Brands are increasing their spend on on platforms such as TikTok, Amazon and Instagram; 76% of respondents to WARC’s Marketer’s Toolkit survey, indicated they intended to increase investment in TikTok in 2023, compared to only 44% who intended to increase investment in Amazon.com.

Key quote

“Heading into next year, we’ll see retail media networks becoming an essential part of marketing strategies and heightened experimentation in social commerce” – Gregory Grudzinski, Head of Content, WARC Digital Commerce. 

Future of Digital Commerce is the second report of a must-read series of four that makes up The Marketer’s Toolkit 2023. A sample report is available to read here. 

The first chapter of the Toolkit’s Global Trends report, the first module to be released, is available to read in full here. A further two modules will be released next year: The Future of Media (5 January) and The China Marketer’s Toolkit 2023 (31 January). The reports are complemented by a series of podcasts.