Retail data has taken over Europe. Now what?

Retail data’s ascent to the upper echelons of European advertising royalty is increasingly looking like fait accompli.

Just in the last three months, British retailer Sainsbury’s loyalty arm Nectar, last-mile delivery app Gopuff and German retailer REWE have announced retail data integrations with The Trade Desk, enabling advertisers to leverage shopper data for off-site targeting across the open internet.

They join the likes of Ocado, Glovo, Rossmann and Schwarz in opening up access to their shopper data to advertisers in a retail media wave that is sweeping Europe.

Recent estimates suggest that in the U.K., Germany and France, retail media ad spend is set to more than double by 2027, based on 2023 figures, outpacing all other digital channels in terms of growth. And that’s after it took only seven years for retail media to reach 3 billion pounds in spend in the U.K., compared to the 13 and 17 years it took social and search, respectively.

The reasons for this meteoric growth are well known by now — for one, retailers’ first-party shopper data is extra valuable for brands selling stuff on retailers’ sites. But the full potential of retail data may reside off-site, in helping brands find audiences across the internet as third-party cookies disappear.

Now that some of Europe’s biggest retailers have laid out their retail media ambitions, the channel’s real growth could still be ahead of us.

“The main thing I anticipate we’ll see in retail media in 2024 is more,” says Gil Sadeh, chief growth officer at Skai.

“More retailers still joining the bandwagon; more placements and options from existing retailers and commerce advertisers; more metrics and data points; more collaborations and partnerships between retailers, social and media outlets; and more connections that will start to form in the intersection of retail and media.”

Retail data goes mainstream in Europe

In the U.K., virtually all major grocers and retailers have now made their shopper data available to advertisers, whether through their own retail media platforms or via integrations with third parties. The most recent are The Co-Op and Currys, which announced retail media networks in January and last December, respectively. Tesco, Asda, Boots and Morrisons, among others, are already in the game.

The landscape is just as busy on the continent. In France, major retailers Auchan, E.Leclerc and even the glitzy Galeries Lafayette are active in the space. In Germany, domestic retailers like Otto, MediaMarkt and Douglas are taking on Amazon’s dominance in retail media. Retail giant Schwarz Group, owner of Lidl, made some of its retail data available via The Trade Desk last year.

Retailers Ahold Delhaize in the Netherlands, Allegro in Poland and Profi in Romania further complete the picture of retail data’s ascent in Europe.

Retail data beyond retailers

But advertisers are starting to realize that just being given access to shopper data isn’t enough, says Thorsten Decker, chief strategy officer at Omnicom Media Group Germany. “It’s not just about the product itself; it’s about crafting new consumer experiences that leave a lasting impression.”

“It’s time to move beyond the sheer number of providers and focus on the usability of data and insights, demanding a new level of holistic approaches,” says Decker.

To that end, some European retailers are experimenting with porting retail data into off-site environments, including in places where cookies never really worked to begin with, like connected TV (CTV). That means using retail data not just for conversions, but also to help build brand awareness.

“Retail media is quickly going full funnel,” says Skai’s Sadeh. A recent example is toilet paper brand Andrex’s campaign with online grocer Ocado in the U.K. Media agency PHD Media took Ocado’s shopper data and built audience segments based on Andrex buyers, featuring shoppers who typically purchase in similar categories, such as beauty and household products. They found incremental new customers on open-internet environments like CTV and podcasts, which resulted in a return on ad spend five times above expectations.

Advertisers are also looking past the “what” of a purchase and leveraging the “how” and “when,” thanks to integrations with last-mile delivery apps such as Gopuff and Glovo. “Gopuff’s ability to create bespoke audience cohorts has allowed brands to drive high levels of new-to-brand buyers by leveraging custom, real-time segments of category buyers who have yet to purchase their brand,” says Daniel Folkman, SVP of business at Gopuff, pointing to work done with a large confectionery conglomerate that saw it attain 30% better results on Gopuff compared to using traditional advertising channels.

But some argue that creativity may be the missing ingredient to fully unlock retail data’s potential in off-site environments.

“We have yet to push beyond media placement and targeting and combine it with a more creative approach,” says Tina Allan, global chief data and intelligence officer at FCB. “We can bring the voice of the brand into the placement by weaving that narrative and brand story through performance channels creatively.”

It may not be far-fetched, then, to think that we may start seeing some winners leveraging retail data insights at this year’s Cannes Lions.

“I’m excited for creative innovation, increased personalization, augmented reality, the emergence of voice commerce, and CTV experiences that will evolve in these places,” says Allan.

What’s next for retail data in Europe

As we eagerly await the first retail-data-powered Cannes Lions winner, a lack of standardization — an issue that was also raised with The Current by IAB Europe chief economist Daniel Knapp last year — could be holding back advertisers from investing even more in the space.

In Skai’s 2024 state of retail media study, respondents placed standardization as a minor factor among the critical challenges that might drive less investment in retail media. But Sadeh thinks marketers may be misdirecting their worries.

“Topping the charts were ‘analytics and reporting limitations,’ ‘lower ROI compared to other channels’ and ‘difficulty proving investment incrementality’ — issues that could be considered symptoms of a lack of standards in the first place,” Sadeh says.

“With a rise in standardization and attribution in retail media, we expect to see the industry start to take a more serious approach toward performance metrics such as iROAS [incremental return on ad spend] as advertisers seek greater transparency and uniformity in evaluating the effectiveness of their spend,” says Gopuff’s Folkman.

Ultimately, as the pool of retail data that European marketers can choose from grows ever larger, being able to achieve scale in a privacy-conscious way will likely become a key consideration for advertisers, with third-party cookies deprecating and European privacy laws evolving.

“Two things will factor into who will raise above the pack: reach and impact,” says Sadeh. “The more data and information you have, the more placements, opportunities and audiences you reach, the broader this one remaining source of data can have an impact.”

The Current is owned and operated by The Trade Desk, Inc. This information is provided solely for background and is not a representation or guarantee of any future performance.