UK and US retail media – what can we learn from each other?
If the UK and the US are two countries divided by a common language, as the old saying goes, then what does each country mean when it talks about retail media?
The sector is booming in both markets, for a simple reason: Retail Media Networks (RMNs) work. Investment is growing on both sides of the Atlantic because these networks tangibly drive measurable customer, sales, and brand outcomes.
On a global level, both the UK and US are leaders in the space. But given our differing sizes, cultures, market players, legislation and consumer habits, inevitably the respective retail media landscapes look a little different: the US is heavily sophisticated on the digital front, with the UK closing the gap quickly, while the UK is often more evolved in terms of in-store retail media and using insights to integrate campaigns across in-store, onsite, and offsite.
Having worked extensively in both the US and UK, I’ve seen first-hand that while there are many similarities, there are real differences that shape the ways people shop and retailers operate. So, what can we learn from each other, and which achievements can we be especially proud of here in the UK?
Relative scale
The US obviously has size on its side. Retail media spend will reach almost $130 billion there by 2028, up from $54 billion this year. If those projections play out, retail media will account for almost a quarter of all US ad spend.
The achievement of North America’s leading retailers has been to turn their huge physical and online presence into first-party data-powered targeting and engagement media owners. The greater population of the US, of course, means a greater engagement pool for the largest networks. For instance, retail giants such as Walmart have shown what sophisticated retail media strategies can deliver.
In the UK, retail media is on track to generate £4 billion this year, rising to nearly $8 billion in 2027 – well ahead of Germany and France. Without a doubt, UK retail media has a powerful momentum of its own, and operators like Nectar360, which operates the UK’s largest and coalition loyalty programme in Nectar (over 22 million members), as well as a sophisticated Retail Media Network across Sainsbury’s and Argos – brings its own unique offering to the market.
The UK’s strength: the abiding pull of the physical store
The US is generally revered by countries such as the UK for their sheer rate of innovation and scale of operations across the pond. However, in this case, simply comparing the relative size of the US and UK may be the wrong lens through which to view the effectiveness and sophistication of RMNs. It is more instructive, perhaps, to focus on the outcomes that will make a sustained difference for each market.
While the rise of ecommerce in the UK was significant during Covid, we have seen this trend plateau in more traditional verticals like food. This means an omnichannel approach to Retail Media is essential, engaging and connecting customers with their favourite brands however they choose to shop – in-store and online.
In the UK, the majority of customer spend goes through physical stores, but omnichannel has become a key method in engaging customers, however they choose to shop. Our aim at Nectar360 has always been to ensure the campaigns we run are additive to the customer experience, enhancing customer journeys and ensuring customer satisfaction remains high across omnichannel experience.
And let’s not forget customers want to be inspired within stores, which creates a huge opportunity for creative activations – aided by our fast-growing connected digital screen network. Loyalty schemes such as Nectar help brands close the loop between ad spend and sales performance. The integrated omnichannel campaigns they enable online and in-store are a key differentiator in the power of retail media, which sees marketing drive performance and build brands.
A new kind of relationship
Much has been said about the challenges of silos and the fact that retail media requires brands to break down their internal walls to make the most of an opportunity that spans a number of client teams. Easily the number one discussion and debate with senior clients in my first six months at Nectar360 has been the question of how to establish the right team to deliver on retail media internally.
What we are increasingly finding is that the cooperative work of retail buying teams, FMCG brands and retail media networks is something you genuinely don’t see anywhere else. This level of collaboration is the unlock to truly unique customer moments, a good example of this was our Nectar Purple Diet Coke Can activation which resonated brilliantly with customers through a 360 omnichannel retail media campaign.
What we hear over and over again from brands is that client service excellence wins out. They ask us to bring innovation, show up as a media partner, join the dots across their organisation and with the retailer, and make it really easy for them to do business – and that is what we are doing.
Retail media in the UK might never be as big as in the US in simple revenue terms, but for brands and for customers, we can certainly aim to be better.
Also published in: Modern Retail
