Retail media is one among the fastest-growing promoting channels that helps brands reach shoppers right at the purpose of purchase with highly relevant ads, and in turn, retailers can leverage the channel as a brand new revenue stream. Retailers have mastered the channel online, but extending it into their in-store experience has include challenges. Nonetheless, AI is emerging as a strong tool to assist retailers with a brick-and-mortar presence extend their retail media networks without sacrificing relevancy, reach and customer experience.
Major retailers and convenience stores like 7-Eleven are tapping into the large potential of physical retail media, and it’s clear that the shift is accelerating. In actual fact, in-store retail media is predicted to grow at an accelerated rate through 2025. This shift presents a possibility to achieve customers on the crucial point of purchase (and closer to the underside of the funnel).
With 85% of sales still occurring in physical stores, retailers must develop strategies that drive sales and have interaction in-store audiences effectively to stay competitive, and AI is already showing promise in these areas in addition to measurement and efficiency.
Aiming AI at Retail Media Outcomes
For retail media strategies to succeed, they should prioritize each driving sales and customer experience. Retailers exist to sell products, and retail media can boost sales by leveraging first-party data to deliver relevant content that leads shoppers toward a purchase order. While online retailers have already seen the transformative power of AI, physical retailers are actually wanting to achieve the identical success in-store.
Listed below are three key areas where AI is being deployed to enhance customer engagement and boost sales:
1. Content Creation & Ad Placement at Scale
For retailers operating multiple locations, establishing the suitable retail media mix is just step one. The true challenge is scaling it effectively across a broad network while tailoring it to the needs of shoppers. AI can streamline the means of content creation and ad placement across a retailer’s network of stores.
By analyzing data in real time, AI can discover which products resonate with local shoppers and adjust ad content to match these preferences. Recent data has found that 52% of marketers predict that AI will enable highly personalized shopper experiences, demonstrating the growing impact of AI in delivering tailored content.
AI-powered algorithms also help retailers determine essentially the most effective in-store promoting locations. These systems can then reach customers using data similar to shopping behavior, time of day and inventory levels to deliver the suitable message at the suitable time for essentially the most impact. For instance, if a store experiences a spike in foot traffic as a result of a neighborhood sports game, AI can adjust the content in real time to advertise related products or special offers, maximizing the sales opportunity. Businesses that leverage AI and machine learning (ML) to personalize ads see a 1.3 increase in incremental return on ad spend.
2. Measurement and Attribution
In-store retail media presents a novel challenge: accurately measuring and attributing the impact of ads on sales. While tracking online customer journeys from ad exposure to buy is comparatively straightforward, the measure of success for campaigns and in-store sales may be more complex. While the industry is making moves to standardize in-store retail media measurement, AI can bridge this gap by combining and analyzing data from various sources, similar to point-of-sale systems, loyalty programs and in-store sensors.
Using AI, retailers can track how customers interact with in-store media and understand how these interactions influence purchasing decisions. For instance, a digital display may show an ad for a particular product, and AI can assist determine whether there was a corresponding increase in sales for that item inside a certain timeframe.
AI also helps improve transparency in retail media measurement by detecting patterns of fraudulent activity with unmatched speed and precision. This is especially vital for in-store audio promoting, which is gaining momentum as a top-three channel for retailers. Once considered a secondary channel as a result of its intangible nature, audio promoting is quickly becoming a useful investment for each online and brick-and-mortar retailers.
But one challenge with in-store audio is ensuring that ads are literally played and heard. In busy retail environments, employees may unplug legacy media players to play personal music or turn off the sound entirely. In high-traffic or noisy locations, manual adjustments to volume could be nearly not possible to administer, leading ads to be drowned out. AI can prevent any such audio ad fraud by routinely adjusting the amount based on ambient noise levels, ensuring that the audio is evident and audible to customers. AI also can time-stamp the ads, providing additional validation and improving the accuracy of measurement.
3. Continuous Learning and Optimization of In-Store
 By leveraging AI, retailers can constantly refine their strategies to create simpler promoting campaigns in physical stores. AI-powered solutions evolve with every customer interaction, gathering data that allows them to discover patterns and preferences that inform future campaigns. For example, AI might help retailers discover that a specific energy drink performs higher when promoted within the afternoon or that certain messaging resonates more with specific demographic groups.
This means of ongoing optimization goes beyond individual campaigns. As more data is collected on purchasing behavior and in-store dwell time, retailers can gain deeper insights into customer engagement to then inform key decisions around store layout, product placement and promotional strategies.
With these data-driven insights, retailers can fine-tune their overall in-store media strategy, reallocating resources to essentially the most successful tactics. The result’s a dynamic, adaptive approach that not only enhances customer experiences but additionally drives sustained sales growth. A recent study by GroceryTV found that in-store retail media campaigns consistently drive double-digit sales uplift in brick-and-mortar stores.
The Way forward for In-Store Retail Media with AI
Because the retail industry recognizes the necessity to activate and standardize retail media inside physical stores, AI’s ability to scale content, measure results and constantly optimize strategies positions it as a serious ally in the long run of in-store retail. By embracing AI-driven solutions, retailers can have an edge in an increasingly competitive landscape and rediscover the facility of in-store engagement for driving each customer satisfaction and revenue growth.
Retail media’s expansion into physical stores marks a brand new chapter within the evolution of customer experience. With the assistance of AI, retailers have the tools to show every in-store visit into a possibility to deliver tailored experiences that result in sales lifts. Because the line between digital and physical continues to blur, the retailers that harness AI to mix these worlds will likely be on the forefront of retail innovation.
