Since the pandemic, the way customers shop has changed. Contactless shopping has become a norm, and brand loyalty has taken a hit, forcing brands to think of new ways to engage with customers. Due to this recent shift, an increasing number of businesses are working with retail media platforms and using digital tools to boost their sales and profitability. Industry reports also back this trend and predict that the global advertising market is expected to register a 4.6% growth in 2024, reaching an impressive valuation of $752.8 billion. This growth points toward the evolving advertising dynamics and highlights the need for brands to adapt according to the latest retail advertising trends.
As an advertiser, it is crucial for you to understand the expected shifts in retail advertising to stay ahead in the game. To help you with this process, we will discuss every important advertising prediction for 2024 on this blog. This will offer you actionable strategies to navigate the ever-changing world of retail advertising effectively.
First-Party Data: The New Pillar of Retail Advertising
Earlier, advertisers used data from other websites (third-party data) to understand user behavior and show them targeted ads. However, with new data privacy rules like the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the USA, this method is changing. These laws focus on promoting privacy and giving users better control over their data, due to which advertisers are now focusing on leveraging first-party data in their strategies.
An important advertising prediction for 2024 is that there will be a growing focus on using first-party data, which is collected directly from the existing customers of an enterprise. The required information will now be sourced from multiple platforms like the company’s websites, apps, and customer records.
For retail advertising, first-party data is highly valuable as it helps advertisers understand what their customers like, what they buy, and how they browse online. This means they can offer creative solutions backed by personalization. To unlock the full potential of this data, companies are finding new ways to win consumer trust and get the desired information. Businesses are making their websites and apps highly engaging to get the target audience to interact more. They are also using subscription models to collect email addresses and are offering loyalty programs to encourage customers to share information.
Partnership with Self-Serve Retail Media Network Platforms Will Surge
Retail Media Networks (RMNs) are becoming increasingly important in online advertising as they allow brands to showcase their products on retailer websites and apps. In the past, retailers controlled these networks, so brands didn’t have much freedom with their ads. But as per the latest retail media trends, there is more interest in self-serve RMNs that let brands run ad campaigns themselves, giving better control and more options to customize. This control makes it easier to reach the right audience and understand how well the ads are performing, helping them make better decisions and use their ad budgets wisely.
These self-serve platforms also help retailers make money by selling ad space, as brands can use their platforms independently. This flexibility not only brings in more money for retailers but also improves the process of advertising by giving brands more ways to reach customers by using first-party data.
Marketers Will Become More Cautious About Spending
Retail marketers are being careful about their ad spending due to different geopolitical uncertainties affecting the markets. Marketers are hesitant to spend money on new technologies that haven’t proven a valuable return on investment. The goal is to reduce financial risks while making each ad campaign as effective as possible. Going by a crucial advertising prediction, this careful approach to spending is expected to continue in 2024 as marketers are likely to rely more on data-driven decision-making. They will prefer using retail media platforms that are good at targeting the right customers and can clearly show the benefits of the money being spent on ads.
Marketers are also starting to prefer using all-in-one platforms that let them handle everything about their ads, from planning to measuring results, in one place. This flexibility helps them have better control over their advertisements, be highly efficient, and have a well-rounded digital advertising strategy. This transition is part of a bigger trend for 2024, where advertising is streamlined, focused on data, and concerned with ROI.
Brands Focusing on Omnichannel Experience
In 2024, brands are likely to focus on creating an omnichannel experience where customers can smoothly interact with them, through both online and offline channels. This shift is being driven by customers’ preference for a seamless experience, whether they’re shopping online on a mobile app or in a physical store. To make this happen, brands are using new retail technologies to keep track of customer interactions across different channels.
A great example of this is Disney, which has an app to improve the experiences in its theme parks. This app helps visitors plan their day, uses features like Disney Genie for schedules and bookings, and offers a personalized experience based on the visitor’s interests or family. This mix of digital and physical experiences shows Disney’s commitment to an omnichannel strategy, making visits more enjoyable and tailored to each visitor.
Crate & Barrel, a home goods store, is also doing well with omnichannel experiences. They now accept digital wallets and Buy Now Pay Later (BNPL) services. They also continue to offer Buy Online Pickup In-Store (BOPIS) services, showcasing their focus on giving customers convenience and flexibility across different shopping methods.
By providing a connected experience across various channels, brands can greatly improve customer engagement and happiness. Studies have found that businesses with good omnichannel customer engagement see a 9.5% increase in their yearly income, while those with poor engagement only see a 3.4% increase.
Advertisers Will Leverage SKU's Data for Targeted Ads
Latest retail advertising trends indicate that advertisers are moving away from traditional methods that focus on general demographics and interests. Instead, they’re starting to use an accurate metric called Stock Keeping Unit (SKU) data as there is a growing need for ads to be precise and personal.
Earlier, ads were targeted based on broad groups of people and what they might like. This was a good way to reach a lot of people, but it was not very specific. SKU data, on the other hand, gives detailed information about what customers buy. This includes aspects like what kind of products they buy, their size, color, and other features. By looking at this data, advertisers can understand what customers like and buy. For instance, if someone often buys a certain type of product, ads can be made to show them similar or related items. This makes ads much more relevant and effective.
As per another advertising prediction for 2024, this shift to using SKU data is likely to start a bigger trend in digital marketing, where decisions will be based on detailed data. It also fits with wider trends in retail advertising, where enterprises are focusing on improving how customers feel about shopping.
Focus on AI Tech for Improved Ad-Delivery
As per the next advertising prediction, the retail advertising industry is set to make a huge leap forward with Artificial Intelligence (AI), by creating ads that are more focused, run automatically, and are tailored to each consumer.
At first, AI helped with simple tasks like sorting through big amounts of data to draw useful insights. Now, with improved technology, AI is used to get a deeper understanding of what customers want, predict trends, and create ads that grab people’s attention. Through predictive analytics, it can analyze huge volumes of data from browsing history, buying patterns, and different social media platforms like Facebook, Twitter, LinkedIn, TikTok, and Instagram to figure out what customers might like.
One big benefit of AI in advertising is making personalized ads on a large scale with precision. Advertisers can use this technology to make ad experiences that really connect with each user based on their interests and needs. This isn’t just about using someone’s name in an ad; it’s about showing them things they truly care about.
Instead of just using basic information like age or location, AI can predict who will be interested in certain products or services. This means ads are more effective, and people see fewer ads that don’t matter to them. AI is also making the process of buying ads easier and more efficient through programmatic advertising. Here, AI systems buy and place ads in real time based on certain rules. This saves time and makes sure ads are shown where they’ll work best.
The Emergence of Contextual Targeting in Digital Advertising
Another important advertising prediction for 2024 is focused on how contextual targeting is being used more. This is different from the old way of targeting ads based on personal data and cookies. Contextual targeting focuses on where the ad is shown, making sure it fits with what the user is reading or is interested in at that moment. For example, if there’s an ad for sports gear on a fitness blog or a sports news website, it’s more likely to catch the attention of people interested in sports. This ensures that ads lead to better results as more than 74% of users only want to see ads that are relevant and useful to them. For instance, services like YouTube, Netflix, TikTok, and news publishers are often built on recommendation engines that deliver personalized content.
As the use of third-party cookies decreases and advertisers seek methods to be effective without using personal data, contextual targeting makes for a viable solution since it focuses on the setting of the ad, not the person’s data. Advances in AI algorithms and machine learning are making contextual advertising even better as AI can look at the content for keywords, themes, and even the mood or pictures to find the best place for an ad.
How can Flipkart Commerce Cloud (FCC) help?
Flipkart Commerce Cloud (FCC) is well-positioned to assist businesses in leveraging the emerging trend of contextual targeting in advertising. FCC’s offerings are designed to enable retailers and brands to enhance their advertising strategies through advanced technological solutions. Let’s have a look at some of the key offerings from FCC:
- FCC Ads Manager: Think of it as your one-stop shop for all things advertising. It has everything you need to show off your products, whether you’re looking to display ads on your website, tailor ads that match what your customers are currently interested in, or highlight your products in listings.
- FCC Pricing Manager: The Pricing Optimizer and Dynamic Pricing Engine work together to adjust your prices smartly. They consider what’s trending, what’s in demand, and set your prices just right.
- FCC Assortment Manager: This tool is like having a bird’s-eye view of your product range. You can compare, manage, and optimize what you’re selling to make sure your merchandise is always on point. It’s all about selling smarter, not harder.
For businesses seeking to stay ahead in the competitive retail landscape, Flipkart Commerce Cloud offers a range of technology-driven solutions. For more detailed information about how FCC can help your business make the best of contemporary retail advertising trends, connect with the expert team now.