Leveraging Internal Retail Media Networks to Advertise Supplier Products

Introduction

A Retail Media Network is a platform that allows retailers to sell advertising opportunities on their digital assets—such as websites, mobile apps, email newsletters, and in-store digital displays—to brands (often their suppliers). Retail Media Networks (RMNs) have emerged as one of the most powerful tools in digital marketing, particularly for retailers seeking to unlock new revenue streams and boost customer engagement.

Traditionally, retailers have relied on external ad platforms, such as Google, Facebook, and Amazon. However, the growing accessibility of first-party data and shifts in privacy regulations have encouraged companies to develop internal RMNs to monetize their digital properties and promote supplier products directly to consumers.

Why internal RMNs are gaining traction

Several strategic advantages are driving the shift toward in-house RMNs:

• Control over customer experience: Internal RMNs allow companies to ensure that ad content aligns with their brand standards and customer experience.
• Monetization of first-party data: With cookies fading out, retailers' shopper data is becoming increasingly valuable for targeted advertising.
• Higher margins: By eliminating intermediaries, retailers can retain a greater share of ad revenue.
• Better targeting and attribution: Internal RMNs provide end-to-end visibility from ad exposure to the transaction, enabling closed-loop measurement.

How companies are using internal RMNs to promote supplier products

1. Personalized product placements on e-commerce sites

Retailers utilize real-time data to offer personalized products, serving supplier ads on search result pages, category pages, and product detail pages. These ads are often “sponsored” products that blend seamlessly with organic listings, providing high visibility for supplier goods. A grocery retailer’s website might feature a promoted listing for a specific cereal brand at the top of the breakfast foods category—paid for by the supplier.

Here's a breakdown of how personalized product placements typically work on e-commerce sites and associated challenges:

• Personalization begins with gathering data about the user. This can come from various sources, including browsing history, Purchase History, Demographic Information, Behavioral Data, Social Media Insights, Cookies, and tracking.
• E-commerce sites use machine learning algorithms and AI to process and analyze the collected data. Collaborative Filtering, Content-Based Filtering, and Predictive Analytics help them predict which products a customer will most likely purchase.
• Once the system understands the user’s preferences, it can place personalized products in several key areas of the website, including the Home Page, Search Results, Product Pages, Recommendations, Sidebar, Email Campaigns, and Retargeting Ads.
• Personalization isn’t just about showing the right products but also offering personalized deals through Discounts and Offers, Loyalty Programs, and Location-Based Pricing.
• Personalization extends beyond the website to mobile app installations, social media for personalized ads, and push notifications that alert customers to sales or products they’ve shown interest in.
• Some e-commerce platforms are starting to use visual search to enhance personalization. For instance, if a user uploads an image of a product they like, the website can find similar items from their inventory, creating a personalized experience based on visual preferences.
• Personalization is becoming more seamless across different devices. For instance, if a user browses on their phone, adds an item to the cart, and later logs into their account from another device, such as a desktop, the website will recognize the user's session and suggest products or offer discounts based on their previous behavior.

2. Onsite display advertising

Onsite display advertising refers to displaying advertisements directly on a website or web application in a visual format. These ads typically appear in various forms, such as banners, pop-ups, interstitials, or native ads, and are integrated into the website's content. The goal is to attract visitors' attention and generate revenue for the website owner (publisher) or drive specific actions, such as clicks, sign-ups, or purchases.

Benefits of onsite display advertising:

• Revenue generation: It helps website owners monetize their traffic by displaying ads that advertisers are willing to pay for.
• Targeted ads: The ability to target users based on their browsing behavior increases the chances of engagement and conversions (clicks, sales, etc.).
• Brand visibility: Display ads can increase brand awareness by being visible on high-traffic sites.
• Variety of formats: The flexibility of formats (static, animated, video, etc.) allows advertisers to choose the best way to deliver their message.

 3. Sponsored search results

Sponsored search results are paid advertisements that appear alongside or at the top of search engine results when users search. These ads are typically marked as "sponsored" or "ad" to distinguish them from organic (unpaid) search results. Sponsored search results are commonly found on search engines such as Google, Bing, and Yahoo, and they play a significant role in Pay-Per-Click (PPC) advertising.

Sponsored search results are a core part of Search Engine Marketing (SEM), where advertisers bid to display their ads when users search for specific keywords or phrases.

Benefits of sponsored search results:

• Immediate visibility: Ads appear immediately after being set up, unlike organic SEO efforts, which can take time to show results.
• Targeted: Ads are shown to users based on their search intent, making them highly relevant and increasing the chances of conversion.
• Measurable: Results are easily tracked in real-time, with advertisers able to view click-through rates, conversion rates, and other performance metrics.
• Control over budget: Advertisers can set daily or monthly budgets, making it a flexible and scalable form of advertising.
• Pay only for results: Advertisers only pay when a user clicks on the ad, making it performance-based rather than paying for impressions.

Much like paid search on Google, retailers allow suppliers to bid on keywords within their site search engine. This ensures that their products appear at the top when customers search for related terms.

Example: A customer searching for "coffee" might first see a sponsored listing from a particular coffee brand.

4. Email marketing integration

Email Marketing Integration refers to connecting email marketing platforms (such as Mailchimp, SendGrid, or ActiveCampaign) with other tools or systems to streamline, automate, and enhance marketing efforts. This can include integration with:

• CRM (Customer Relationship Management) software (like Salesforce or HubSpot) to target and segment the audience better.
• E-commerce platforms (like Shopify or WooCommerce) send personalized product recommendations, cart abandonment reminders, or post-purchase follow-ups.
• Social media platforms (such as Facebook or Twitter) can be used to gather insights or retarget users.
• Website (via tracking tools, forms, or pop-ups) to collect subscriber data or trigger emails based on user behavior.
• Analytics tools (like Google Analytics) to track email performance, such as open rates, click-through rates, conversions, etc.

In short, email marketing integration aims to automate processes, improve personalization, enhance targeting, and increase efficiency by syncing data and insights between various platforms already in use. This approach enables the delivery of more relevant and timely messages to the audience, which can help enhance engagement and ultimately drive sales.

Retailers integrate supplier content into email campaigns, such as product recommendations, limited-time deals, or new arrivals, all based on consumer behavior.

Example: A sporting goods retailer could send a personalized email featuring running shoes from a supplier sponsoring the campaign. 

5. Offsite advertising with first-party data

Offsite advertising with first-party data refers to using data collected directly from audiences or customers to target and engage them with ads on external platforms, such as those outside one's website or app. Essentially, leveraging customer insights and interactions to drive more effective ad campaigns but executing them on third-party websites, social media platforms, or other external channels.

Key concepts are first-party data - This is data that is collected directly from audience or customers, such as through websites, apps, email sign-ups, purchase history, customer surveys, or CRM systems and Offsite Advertising -This refers to advertising that takes place outside of owned media channels (like company website or app).

It involves data collection: First, gather first-party data through various touchpoints, such as website interactions, transactions, or user registrations.

• Data segmentations: The next segment audience is based on various factors, including demographics, browsing behavior, past purchases, and engagement patterns.
• Targeted offsite advertising: After segmentation, this data will target users with relevant ads on external platforms, such as Facebook, Google Display Network, LinkedIn, or other programmatic ad exchanges. For example, if a user purchases a pair of shoes from a website, use this information to serve them a relevant ad for a matching pair of socks or a discount on their next purchase.
• Personalization: Since first-party data is precise to an audience, creating personalized ads that resonate with their interests or behaviors typically leads to better engagement and conversion rates.

Benefits:

• Increased relevance: Using first-party data helps ensure ads are highly relevant to the audience, improving the chances of conversion.
• Better ROI: By targeting people who have already shown interest in a specific brand or product, the advertising budget can be spent more efficiently.
• Control Over Data: Since it’s company-owned data, ensuring high-quality and compliance with privacy regulations, like GDPR or CCPA, becomes easier.
• Cross-Platform Retargeting: First-party data enables users to be retargeted across various platforms they may visit, resulting in a consistent and more cohesive user experience.

 Example:

• Retailers utilize anonymized first-party data to expand their reach to offsite channels, including social media, connected TV (CTV), and programmatic displays. Suppliers can target these high-intent audiences across the web. A fashion retailer collects first-party data on users who view or purchase specific types of clothing. The retailer can use this data to serve ads for complementary items (such as shoes or accessories) on social media platforms, Google, or other websites that users visit.

6. In-store digital media

 In-store digital media in retail marketing refers to the use of digital technology to engage customers and enhance their shopping experience within the physical retail environment. This kind of media blends traditional in-store advertising with digital tools, creating a more interactive, personalized, and dynamic way for retailers to market their products. There are various forms of digital media used within physical stores to engage shoppers, such as digital signage, which includes digital billboards, screens, or monitors placed in high-traffic areas of the store. These displays display dynamic content, including promotions, product recommendations, or brand messages.

• Interactive kiosks: Self-service digital kiosks enable customers to browse product catalogs, locate stores, check prices, or make purchases. 
• Shelf screens and digital price tags: Small or digital price tags attached to store shelves can display real-time pricing, product details, availability, or personalized offers.

Benefits of in-store digital media in retail media marketing

• Enhanced customer engagement: Digital media are personalized promotions leveraged to increase customer interaction with products and brands.
• Real-time content updates: Digital media can be updated in real-time, ensuring the content is always current and relevant. Retailers can instantly change product promotions, stock levels, or store hours based on customer preferences, inventory, or external events.
• Personalization and targeting: Digital media can collect customer data (through loyalty programs, mobile apps, or sensors) and tailor content based on individual preferences or behaviors.
• Cross-channel integration: In-store digital media can seamlessly integrate with online and mobile channels. For instance, a customer browsing a product in the store can scan a QR code that takes them to the retailer's website for further information or to complete the purchase online. This creates a unified, omnichannel experience.
• Increased sales and conversion rates: Digital media can drive impulse purchases by providing timely promotions and product recommendations at the moment customers are making decisions. Research shows that digital signage can increase sales and the average basket size.
• Real-time analytics and performance tracking: With digital media, retailers can track the performance of their campaigns, gathering data on customer engagement, foot traffic, and purchasing patterns. This enables quicker adjustments to marketing strategies, thereby optimizing campaigns for improved results.

7. Benefits to retailers and suppliers

Retail network marketing (multi-level marketing or MLM in some contexts) can provide several key benefits for retailers and suppliers. Here’s a breakdown of those benefits:

7.1.  Benefits for Retailers:

• Increased earning potential: Retailers can earn money by selling products and recruiting others to do the same. This creates an opportunity for passive income through commissions on sales made by their recruits, which can accumulate as the network grows.
• Flexible business model: Retailers can operate on their own schedule. This type of business is often home-based, which reduces the overhead costs associated with running a traditional store or business.
• Low startup costs: Unlike opening a physical retail store, network marketing typically has low upfront costs. Retailers usually only need to invest in an initial product package or inventory and can begin selling almost immediately.
• Access to training and support: Many retail network marketing programs offer comprehensive training and mentoring to their retailers. This includes sales techniques, product knowledge, and marketing strategies, providing retailers with the tools they need to succeed.
• Ready-made product line: Retailers benefit from selling already developed, tested, and branded products. This allows them to focus on marketing and sales rather than product development and inventory management.
• Residual income: By building a team or network, retailers can generate residual income through commissions and bonuses from their recruits' sales. This creates an opportunity for ongoing earnings even when the retailer is not actively working.
• Community and networking: Retail network marketing fosters community and collaboration among members, providing retailers with networking opportunities that can motivate and help build business partnerships.

7.2.  Benefits for Suppliers:

• Broader market reach: Suppliers can quickly expand their market reach by leveraging a network of independent retailers with access to diverse customer bases. The network acts as an extended sales force, helping suppliers reach more consumers without requiring them to invest heavily in traditional advertising or retail distribution.
• Lower distribution costs: Suppliers often reduce their expenses on logistics, warehousing, and distribution. Since the product moves through the network rather than a centralized retailer or wholesaler, suppliers can reduce many overhead costs.
• Scalability: By utilizing a network marketing model, suppliers can scale their operations more easily as their retailers expand their sales teams. This can lead to exponential growth, enabling suppliers to increase sales without corresponding increases in operational costs.
• Customer loyalty and brand advocacy: Retail network marketing often fosters personal relationships and trust-building between retailers and customers. Retailers are more invested in selling products they believe in, which can help promote long-term customer loyalty and create brand advocates.
• Feedback and market insights: Suppliers can gather valuable insights about customer preferences, sales trends, and market demands from their retailers. This feedback loop can help suppliers improve their products and marketing strategies.
• Lower risk of stock unsold: Network marketing often operates on a just-in-time model, where retailers are not required to maintain a large inventory. Suppliers can minimize the risks of overproduction or unsold stock, a major concern for traditional retailers.
• Incentive programs: Suppliers can create incentive programs that encourage retailers to achieve higher sales volumes or expand their networks. These incentives can increase motivation and performance among the sales force, benefiting the supplier’s overall sales.
• Brand awareness and word-of-mouth marketing: Since retailers are motivated to recruit others and promote products, suppliers often benefit from significant word-of-mouth marketing. This can help build brand awareness cost-effectively, especially if the network marketing model leverages social media and online platforms.

8. Notable retailers with internal RMNs

• Walmart Connect: Offers robust onsite and offsite advertising powered by Walmart's shopper data.
• Target’s Roundel: Target’s customer insights drive supplier advertising.
• Kroger Precision Marketing: Focused on closed-loop measurement tied to grocery transactions.
• Best Buy Ads: Provides media placements across Best Buy digital and physical platforms.
• CVS Media Exchange (CMX): Offers Omni channel advertising for health and wellness suppliers.

Conclusion

Retail network marketing creates an environment where retailers and suppliers can thrive through greater flexibility, lower costs, and higher earning potential. It offers a scalable and mutually beneficial relationship that relies on a network’s strength but requires commitment, ethical practices, and consistent effort to succeed.