Retail Media: The Future of Advertising in South African Ecommerce
By Alasdair Fey, Digital Campaign Manager at midnight, the innovation agency of iqbusiness
Retail media has become a game-changer in the global advertising landscape, with giants like Amazon reaping massive profits from this strategy. In South Africa, online retailers such as Takealot, Checkers Sixty60, Makro, and Woolworths are following suit, leveraging retail media to drive revenue and engage shoppers.
Marketers need to take note of this trend as it presents a new and exciting opportunity for performance marketing. Leading brands are already exploring retail media platforms, harnessing the power of artificial intelligence (AI) to personalize ads and enhance targeting.
So, what exactly is retail media and why is it gaining traction in the South African ecommerce scene?
Retail media is a form of advertising that allows companies to utilize a retailer’s digital properties, such as websites, apps, and in-store displays, to target consumers actively shopping or considering a purchase. While offline formats like point of sale displays have been around for decades, online retail media offers a more targeted, measurable, and immediate approach.
South African brands are embracing online retail media as a way to connect with shoppers at the moment they are ready to make a purchase. Similar to programmatic platforms like META apps or Google, retail media provides marketers with powerful tools to segment audiences and deliver targeted ads to customers in a retailer’s digital space when they are most likely to buy.
The explosive growth of ecommerce has paved the way for the rise of retail media. Data indicates a significant increase in online shopping in South Africa, with online retail sales reaching R71 billion in 2023. As online shopping continues to gain popularity, leading retailers are seizing the opportunity to monetize their platforms by allowing third parties to advertise and trade on their sites.
Retail media platforms like Rainmaker Media and Takealot Ads are enabling brands to target specific audiences with precision. These platforms are leveraging AI to enhance ad placements, provide personalized product suggestions, and optimize pricing to deliver better results for brands.
Why should brands consider incorporating retail media into their marketing mix?
One of the key advantages of retail media is its ability to connect with high-intent shoppers in real-time. By placing your brand in front of customers who are actively shopping or ready to make a purchase, you increase the likelihood of conversion. Additionally, access to the retailer’s first-party data allows for the creation of more relevant and impactful ads that resonate with shoppers at critical moments in their buying journey.
Moreover, retail media offers a level of accountability and measurability that is unmatched. With closed-loop reporting, brands can track how ads drive sales, providing a comprehensive view from ad click to purchase. AI and machine learning tools further enhance the accuracy and effectiveness of ads, enabling brands to optimize their campaigns in a dynamic market.
Retail media seamlessly integrates with other digital marketing channels, ensuring consistent messaging and reinforcing brand presence across platforms. It presents a powerful opportunity to build stronger connections with shoppers, make data-driven decisions, and drive sales in a competitive digital landscape. In the future, retail media is poised to become an essential component of many brands’ digital marketing strategies.
Best practices for maximizing retail media with AI:
– Combine first-party data with retailer insights to create precise audience segments.
– Utilize AI to automate and optimize ads, identify top-performing ad variants, and allocate budgets effectively.
– Personalize product recommendations based on shoppers’ browsing and purchase history.
– Deploy chatbots and AI assistants to enhance the shopping experience and guide customers towards making a purchase.
– Refine targeting and ad placements using AI to maximize results and save time.
As online shopping continues to grow in South Africa, retail media will play an increasingly significant role in the advertising landscape. Brands that leverage AI to personalize ads, integrate retail media into their overall marketing strategies, and collaborate closely with retailers will achieve the best results. Retail media isn’t just another advertising channel—it’s a strategic partnership where data, technology, and creativity converge to drive superior conversion performance.
Article by Alasdair Fey, Digital Campaign Manager at midnight, the innovation agency of iqbusiness, Africa’s future-focused management and digital growth enabler.
About iqbusiness:
iqbusiness is Africa’s leading management and digital growth enabler, boasting over 26 years of experience. Our purpose is simple: to grow people, businesses, and Africa as a whole. With a comprehensive suite of digital, cloud, and security services, managed services, consulting, media, end-user computing, unified communications, and software development, we unlock exponential value and global growth for our clients. Our commitment to excellence and innovation has earned us recognition as a level 1 B-BEE contributor and accolades such as B-Corp, Conscious Companies, and Top Employer status. For more information, visit www.iqbusiness.net.
