The rise of retailer media and DTC models are making a mess of commerce and marketers risk ending up neck deep. But there is huge value for marketers that unlock their owned media assets, an average of $34.5m per brand provided they get the foundations right. Which is where Sonder’s four-point roadmap, honed via supermarkets, telcos and retailers, comes in.

The dynamics of commerce have changed to such a point now that marketers need to reassess their roadmap for success. Commerce was once a relatively straightforward flow of money, product and influence between the product manufacturers (brands), consumers and the businesses that connect them (retailers and media). Brands advertised products via paid media to consumers, who then bought the brand via a retailer. Everyone in the value chain (including consumers) knew what they had to do and the rules of engagement were established. And then it all changed.

The recent advent of retail media has turned the practice of commerce into a convoluted mess that marketers find themselves neck-deep in. Further exacerbating the complexity are the evolving Direct-to-Consumer models, commerce media solutions from traditional publishers which fuse display advertising with the ability to purchase product and retail media providers incorporating offsite (paid) media into their offerings.

— Angus Frazer, Founding Partner, Sonder

The visual below illustrates how these changes are affecting the way businesses sell products to consumers at a macro level.

The hidden opportunity

Marketers are now faced with a far more challenging and nuanced landscape. Relationships between the constituents of commerce are multilayered, the roles they play in the value chain have evolved and the lines of responsibility are blurred. The flow of money, product and influence is now omnidirectional and contains myriad hidden currents that are muddying the waters of commerce. Yet, within this complexity lies opportunity in the form of sophisticated, professionally run retail media offerings.

The growth of retail media as a subset of the wider media landscape requires marketers to embrace media within the organisation, not just the paid media outside of the organisation. It also requires retail media to be viewed in relation to the full potential of owned media touchpoints. Retail media can never thrive if it is restricted to just sponsored product or paid search placements on a website.

Having worked with businesses (both retail and non-retail) over the last seven years to leverage the value of owned media within their organisations, Sonder has identified the fundamental four steps to roadmap a successful outcome from leveraging owned media. This roadmap is equally relevant to non-retail businesses who are looking at value extraction as it is to a retailer looking to develop a media monetisation program.

1. Ambition
The first step is to quantify and qualify the ambition in relation to leveraging the business’s owned media assets.

• Key requirements:
  Clarity on the complete media ecosystem of the business. An understanding of the real-world commercial potential (size of the prize) and benchmarking against other similar businesses.
• Outcome:
  A business-wide agreement and clearly defined intention regarding a retail media program.

2. Model
With the ambition defined, the business should have a north star that is quantified and qualified, the next thing to do is model the solution required to achieve the ambition.

• Key requirements:
  Formalise and agree the guardrails and rules of engagement in relation to the owned media ecosystem. What media is sacrosanct and what is to be commercialised. Balancing cash income and indirect income. Onsite versus offsite media offering… All of these considerations and more must be formalised in the model.
• Outcome:
  A well defined operating model that is fit for purpose and aligned with the ambition.

3. Capability
All the best intention in the world can’t overcome a deficiency in capability. Having an honest and accurate appraisal of the business’ capability to deliver the required model is essential.

• Key requirements:
  The capability gaps we often see in businesses include data, technology, skills and operations. Each of these areas are important to deliver on the defined model efficiently.
• Outcome:
  The outcome at this stage should provide clear imperatives that need to be addressed in order to deliver a compelling and efficient retail media offering to the market.

4. Activation
This is the exciting part – time to go to market! With the confidence that the business is onboard, a clearly defined model that is well understood and the right capabilities embedded, it’s time to introduce this exciting retail media solution to the market. The stakes are high at this stage because if the offering is not launched well, all the hard work in the previous steps could be diminished.

• Key requirements:
  The team in place, the positioning clearly articulated and the collateral to share with the market.
• Outcome:
  Ultimately, the outcome is an actionable go-to-market plan that is endorsed and supported by the business.

A program, not a project  
Becoming a professional retail media provider is about more than simply sponsored products and paid search placements on a website. For retail media to achieve its full potential as a subset of the wider media landscape, retailers must unlock their omnichannel ecosystem of touchpoints. They need to provide retail media solutions and sales service that is as good or better than the traditional media sales world. And there needs to be a professional approach to creating and managing retail media in the longer term. As one retailer we work with recently pointed out: it is a program, not a project.

Is the juice worth the squeeze?
A marketer might look at this roadmap and ask if it’s worth the effort… is the juice worth the squeeze? Two things suggest it is worth the effort. Firstly, there’s the triple win involved in a well executed retail media solution: 1) improved customer experience; 2) improved vendor relationships and; 3) highly profitable revenue to the business. The second thing is that, based on Sonder’s 2023 Owned Media Report, the average retailer has a commercial potential of $34.5m per annum, per business. It’s time to start squeezing.