What Is Retail Media? A New Business Model Revolutionizing the Retail Industry

Retail media is revolutionizing the retail industry. Starting with Walmart’s success story, interest is growing in Japan as well in “retail media,” which uses customer data to deliver effective promotions. From an explanation of retail media to use cases leveraging Lazuli PDP, we will introduce it all.

What Is Retail Media

Retail media refers to “advertising media provided by retailers,” but it does not mean the traditional mass approach; rather, it refers to ad delivery optimized for each individual customer by leveraging data.

In response to population decline and the digital shift in consumer lifestyles, new business opportunities beyond simply “selling products” are being explored, and the retail industry urgently needs to adapt to the digital shift as well.

The following two points are important for retail companies to understand retail media.

・Using customer purchase data: Retail companies connect the vast amount of purchase data they hold with customer management tools such as CRM and CDP, and deliver ads based on that data. This enables retailers to improve the quality of the customer experience through more 1-to-1 communication.

・A new business model for manufacturers: By providing and selling advertising menus that leverage their own data to manufacturers, retail companies create a new revenue source. The advertising industry and manufacturers face the challenge that customer purchasing behavior is difficult to see, making customer understanding less precise. Retail media enables highly accurate ad delivery based on purchasing behavior, allowing effective joint promotions for manufacturers and the advertising industry.

Retail media can build a win-win-win relationship for retailers, manufacturers, and customers. Retail companies can make effective use of their own data, manufacturers can improve targeting accuracy, and consumers can receive information that suits them.

Retail media is a key element shaping the future of data utilization and advertising in the retail industry.

How Will the Retail Industry Change Specifically?

The retail industry’s business model is changing significantly due to advances in digitalization and data utilization.

Let’s look at those specific changes through the following three points.

・Acceleration of omnichannel strategy: By integrating customer data held by retail companies and centrally managing all kinds of data such as purchase data, log data, attributes, and hobbies/preferences, the boundaries between online and offline are removed and a seamless shopping experience is provided. This improves customer convenience and increases loyalty.

・Retail media as a new revenue source: By leveraging their own customer data to provide advertising space to manufacturers, retail companies can develop an advertising business for manufacturers as a new revenue source. New revenue streams beyond traditional customer purchases contribute to greater business stability for retail companies.

・Introducing cutting-edge technology: By utilizing the latest technologies such as AI, big data, and IoT, companies aim to improve inventory management and customer experience. In a world where sustainability-oriented management is required, reducing waste products and managing inventory efficiently are essential. Optimizing product management by leveraging the latest technology is increasingly important.

These changes are driving the retail industry toward a technology-driven, customer-centric business model.

Retail Media Using Lazuli PDP

Lazuli PDP is a product information platform that holds more than 14 million product data records. It can also process and generate product information using AI, supporting data-driven decision-making for retail companies.

Below are specific use cases of Lazuli PDP that are useful for building retail media.

・Integrating product master data: Lazuli PDP integrates internal product masters as a product information platform that centrally manages all data related to products. This makes it possible to analyze purchase behavior and preference data tied to customer IDs on a single platform, enabling real-time and accurate understanding of the market and customers.

・Advanced POS data analysis: By using AI to enhance POS data analysis, it becomes possible to understand not only customers’ purchase histories but also their purchasing patterns, and to develop advertising strategies tailored to target audiences. By using Lazuli PDP, vast amounts of POS data can be instantly converted into an analyzable format. For retail companies that hold massive POS data, it is necessary to prepare POS as big data and use it for proposals to manufacturers from various angles.

・EC optimization: By providing product data optimized for EC platforms, it improves the online shopping experience. By leveraging AI to deliver personalized advertising tailored to customers’ interests and needs, advertising effectiveness is maximized.

By using Lazuli PDP, retailers can deploy more effective retail media strategies and achieve improved customer satisfaction and increased sales.

Summary

The evolution of retail media is driving the transformation of business models in the retail industry. A shift toward innovative customer-centric business models is progressing, including data-driven approaches, omnichannel strategies, and attention to sustainability.

Retail media leveraging Lazuli PDP is accelerating digital transformation in the retail industry through functions such as product data integration, processing, and generation. This enables retailers to better understand customer needs and provide personalized shopping experiences.

At Lazuli, we develop and provide “Lazuli PDP,” a product data platform that supplies and generates product data needed for organizing and processing product masters required for corporate data utilization, such as customer information provision and data analysis. If you are struggling with optimizing product masters, which are indispensable for building retail media, or with utilizing internal data, please contact us from here.

Learn more about Lazuli PDP here: https://corporate.lazuli.ninja/feature/