Retail media has been making a lot of headlines this past year. As shopper behavior shifts, retail media has created new ways for brands to inspire shoppers and new ways for advertisers to measure ad performance.

The closed-loop reporting of retail media—the ability to compare advertising exposure to online and in-store sales—means greater accountability for performance. Brands no longer have to use guesswork to know what’s working. This new level of accountability is defining the future of digital marketing.

As we look ahead to 2023, here are five ways retail media will impact the broader marketing landscape.

Retailers can segment audiences in ways that traditional media can’t: think of loyal buyers, lapsed brand buyers, people who buy in complementary categories, people with a high propensity to try to new products, people with scent, form or flavor preferences – to name a few. Moreover, retailers with deep datasets and machine-learning can now look across thousands of variables to predict which households are most likely to convert against a particular ad campaign.

In 2023, advertisers will increasingly tap these insights to inform decisions from product innovation to audience targeting. Marketers will start audience planning with the buying behaviors that matter most – and demographics will become peripheral. The old days of demographic targeting – which was never a great proxy for purchase - will be gone.

The walls around walled gardens are important for guarding consumer data. But that doesn’t prevent retail media networks—and the rest of the digital ad industry—from aligning on common definitions and standards.

Keep your eyes peeled. Driving this alignment has been a recent focus for the IAB’s Retail Media Network Committee, comprised of leaders in the retail media space, representing buyers, sellers, and ad tech solutions. The group’s mission is to align on advertising business needs, requirements, and standards to reduce friction in the buying and selling process, and to allow for growth, creativity, and innovation. Kroger Precision Marketing looks forward to continuing our influence shaping the future.

Audience fragmentation is making the traditional TV ad model less sustainable, and the pace of change in consumer media habits has never been faster. As people live, shop, and consume media differently, brands must find new ways to connect with them.

Connected TV makes this possible, but marketers also need the ability to reach the right people and accurately gauge the impact of their advertising. Retailers have the first-party data to provide precision ad-targeting and to measure sales impact.

Last summer, streaming usage surpassed cable to become the largest share of TV viewing for the first time. 2023 will be a pivotal year as brands shift TV budgets to leverage the combined impact of retail data and CTV.

The digital ad industry is grappling with carbon footprints. As retail media drives precision targeting, watch for retailers to play an important role in reducing ad waste – and thus reducing energy needs.

Advertisers are rightfully demanding more transparency and visibility throughout the media supply chain. They're asking: How can we be more intentionally strategic with our investments AND do better for the environment? Retail media will be an important part of the conversation.

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