Retail Media, WhatsApp, and AI: Redefining Predictive Retail
We are witnessing an unprecedented transformation in the retail industry, a shift that is redefining the rules of the game. Driven by the emerging force of Retail Media and the innovative combination of Artificial Intelligence (AI), this revolution is reshaping the landscape of Brazilian retail in extraordinary ways. I invite you to explore with us how these innovations are creating new opportunities and challenges in the market. But before we dive into these transformative trends, it is essential to address a crucial topic for Digital Marketing: the end of Cookies and the third wave of advertising. Follow the evolution of these concepts in the chart below and get ready for an in-depth analysis that will equip you with essential insights to navigate this ever-evolving landscape.
The End of Cookies and the Third Wave of Digital Advertising
Impact on Digital Marketing
Google's elimination of "third-party cookies" in Chrome by the end of 2024 represents a significant milestone in digital marketing. This change will directly affect marketing strategies such as remarketing, lookalike filters, and multi-touch attribution. The immediate consequence will be an increase in CPM (cost per thousand impressions) in paid media. McKinsey estimates that publishers could face a loss of up to USD 11 billion in advertising revenue. Furthermore, ad targeting will become less precise, impacting the effectiveness of advertising campaigns.
Scope of Impact
With Chrome being used by 65% of the internet and Google controlling platforms like Android, Gmail, and YouTube, the impact of this cookie change will be even more pronounced. This transition challenges marketers to innovate in their strategies, adapting to a cookieless landscape.
The Rise of Retail Media
Global Context and Market Potential
The Retail Media sector is experiencing significant growth. According to Warc Media, global revenues in the sector are expected to surpass USD 140 billion by 2024. Giants like Amazon and Alibaba are leading this growth, with projected advertising revenues of USD 52.7 billion and USD 42.1 billion, respectively.
Emerging Trends
At NRF's Retail Big Show 2024, with Andrew Lipsman from Insider Intelligence, Jonathan Lustig from Walgreens Advertising Group, and Ryan Mayward from Walmart Connect, the integration of offsite and physical retail was highlighted as key factors in unlocking the potential of Retail Media. The importance of omnichannel was emphasized, combining primary data with offsite and physical retail assets to create a competitive advantage in Retail Media 2.0.
Impact in Latin America
In Brazil, Retail Media is experiencing rapid growth. According to IAB Brazil, the segment generated R$2.6 billion in advertising investment in 2023. Mercado Livre, through its Mercado Ads segment, has a significant presence in this emerging market.
Retail Media on a Global Scale
China leads global investment in Retail Media, with projections of USD 64.43 billion by 2025, according to Statista. In the United States, eMarketer reports that digital advertising spending has doubled in the past two years, reaching USD 41 billion. It is projected that one in every five dollars spent on digital advertising will be in Retail Media. Europe follows this growth trend, with revenues of €12 billion in 2022 and an expectation that this figure could double in the next two years.
Brazilian Retail: The Rise of Retail Media as a Catalyst for Change
Transforming Data into Media Strategies
Companies like Mercado Livre and Grupo Pão de Açúcar (GPA) are at the forefront of a significant shift in retail, harnessing the power of consumer data. Amidst millions of daily transactions in stores and digital platforms, both companies are exploring how to use this information to boost their businesses.
GPA, for example, recognized the potential of the vast amount of data available, both from its loyalty program, Cliente+, and its online users. With over 20 million registered users, seven million of whom are active, the group saw a golden opportunity to start its journey into retail media, using this vast database to target the audience and offer direct connections between brands and consumers.
Monetization Opportunities and Direct Customer Engagement
The concept of retail media allows companies like GPA to offer personalized offers to consumers with specific interests, increasing conversion rates and providing a more relevant shopping experience. At the same time, brands have the chance to establish direct contact with a highly segmented target audience. For retailers, this represents an additional source of revenue through advertising in their physical and digital channels.
The Growth and Future of Retail Media
The relevance of retail media is only beginning to be explored. Fernando Yunes, Senior VP of Mercado Livre in Brazil, highlights the potential of this sector in both Brazil and other Latin American markets. With the prediction that 70% of advertising investments in the world will focus on digital media next year, a significant portion of this investment, around 25%, is expected to be allocated to retail media.
This landscape underscores the growing importance of retail media as a revolutionary element in the advertising market. Companies adopting this trend are not only enhancing their retail operations but also paving new paths to engage consumers and expand their revenue sources. However, for this strategy to be effective, efficient data management is essential, coupled with intensive use of Artificial Intelligence to humanize communication. These technologies are crucial to refine the customer journey with a focus on 'Customer Attention' and 'Ultra-Segmentation.' Next, we will explore how these approaches can be implemented in practice, turning theory into effective action.
The Revolution of Artificial Intelligence in Retail
During NRF's Retail Big Show 2024, Artificial Intelligence (AI) was recognized as a revolutionary force in the retail sector. Christian Beckner, Vice President of Retail Technology and Cybersecurity at NRF, emphasized the need to effectively communicate the role of AI in the industry and establish strong connections with stakeholders to showcase its positive impact on consumers. The practical integration of these innovative technologies requires close collaboration between different areas of the company. Specifically in the context of Retail Media, this approach promotes synergy between Digital Marketing and Trade teams, aligning them with common objectives related to increased sales (Sell-out) and generating new revenue through advertising. The implementation of AI in retail goes beyond process automation and optimization, representing a fundamental transformation in how companies interact with their customers and shape exceptional shopping experiences.
From Omnichannel to Adaptability
Anshu Bhardwaj, Senior VP of Walmart Global Technology, highlighted the transformation of retail, moving beyond the traditional omnichannel model toward an adaptive model, where AI plays a key role in more effectively and personally meeting customer demands. In this context, the importance of an ecosystem of integrated solutions across all channels is emphasized, aiming to eliminate any friction in the customer journey. Tools like Walmart's "Ask Sam" exemplify how AI is facilitating more humanized and efficient interactions, as well as personalizing the shopping experience.
WhatsApp with AI: Empowering Retail Media with Ultra-Segmentation
With approximately 197 million users in Brazil, WhatsApp is not just a messaging app but an innovation driver in e-commerce. The platform is at the heart of the c-Commerce (Conversational Commerce) revolution, transforming interactions between companies and consumers into a central experience in the purchasing journey.
Using artificial intelligence, WhatsApp AI enables customers to shop intuitively and interactively, combining humanized messages with purchasing features. Imagine sending an audio of your favorite dish to a supermarket and, through a friendly conversation, creating a shopping cart with all the items and completing the payment – all in real-time.
In this video, we demonstrate an efficient method to integrate Retail Media into WhatsApp conversations. The choice of who sponsors the initiative, whether the industry or the retailer, will be determined by the previously established business agreement. Check out the following demonstrative video that illustrates this strategy in action. (https://youtu.be/_CmyVauZOYM).
This ultra-segmentation approach combines Retail Media strategies with detailed customer behavior analysis. Additionally, it unveils the potential of influencer content, strategically and organically incorporating products into conversations, benefiting both consumers and the industry and retail.
WhatsApp's reach in Brazil is impressive: 99% of Brazilians have the app installed, 85% use it daily, and it is opened on average 72 times a day. This fusion of convenience, personalization, and interactivity is redefining how brands engage with consumers in the Brazilian retail, making WhatsApp a facilitator of memorable and effective shopping experiences.
Brazilian retail is undergoing a profound and accelerated metamorphosis on this path because they love a good conversation on Zap. With the strategic implementation of WhatsApp and Artificial Intelligence, the future landscape of retail in Brazil is shaping up to be revolutionary. This Super App is evolving into a direct and highly influential channel, redefining the shopping experience with unprecedented personalization and integration. Brazilian companies are quick to adopt WhatsApp to enhance their Retail Media strategies, paving the way for direct and effective communication with consumers. In this context, the architecture of system integration in Conversational Commerce plays a crucial role, addressing challenges and refining omnichannel strategies to provide a promising view of the future of Retail Media in Brazil.
The Importance of Architecture in Conversational Commerce
In the dynamic universe of Conversational Commerce, the synergy between data intelligence, artificial intelligence (AI), and Retail Media strategies is vital. A well-planned and executed system integration architecture is essential for this balance. Furthermore, specialized retail consulting, especially on platforms like WhatsApp Business, becomes indispensable. This integration requires a deep understanding of retail operations, including meticulous analysis to identify and optimize all critical points, ensuring successful flows and a seamless and uninterrupted customer journey.
Navigating Omnichannel Integration Challenges and Strategies
Integrating data from multiple sources - such as POS systems, e-commerce platforms, WhatsApp, loyalty programs, and others - presents a considerable complexity challenge. Overcoming these obstacles requires the implementation of robust platforms enriched with Artificial Intelligence, capable of effectively analyzing and unifying this information. A successful omnichannel strategy is intrinsically linked to the ability to merge data from various sources, resulting in a deeply personalized and perfectly integrated shopping experience. Therefore, a robust and flexible integration architecture becomes an essential pillar to enable retail companies to adapt with agility to changes in consumer behavior at every stage of their journey.
Given that Conversational Commerce with Artificial Intelligence is an emerging field, I have observed that many recent implementations are conducted unprofessionally. For example, a simple product swap test in the cart can completely disrupt the flow, resulting in a negative user experience. Therefore, it is crucial to pay great attention and care to this important communication channel. I strongly recommend testing the cases presented before making a decision.
Future Perspectives for Retail Media with WhatsApp and AI
The ongoing integration between Retail Media, WhatsApp, and Artificial Intelligence (AI) promises to unleash a wave of revolutionary innovations in the retail landscape, driven by the influential Super App of Latin America. Visualize this entire ecosystem enriched by the power of influencers in channels and the imminent arrival of Live Commerce on the platform. This evolution not only promises superior personalization and efficiency in retail operations but also reveals new horizons for engaging customers and generating revenue. The convergence of these technologies is paving the way for a fundamental transformation in how brands interact with their consumers, providing intuitive, engaging, and rewarding shopping experiences.
This promising future is characterized by the continuous evolution of Retail Media tools and strategies. As WhatsApp and AI increasingly integrate into the retail ecosystem, we anticipate increased audience targeting accuracy, marketing campaign effectiveness, and overall customer satisfaction. Companies that can harness these technologies and seamlessly incorporate them into their operations will be at the forefront of this third wave of advertising innovation, surpassing even investments in Social Media. Furthermore, they will open new revenue streams, where retail and industries mutually benefit from their business and advertising agreements, establishing a win-win scenario. Welcome to the third wave of advertising!
Sources: McKinsey, Warc Media, NRF's Retail Big Show, IAB Brazil, Statista, Marketer, The Goal.
Published on Ecommerce Brasil: https://www.ecommercebrasil.com.br/artigos/retail-media-whatsapp-e-ia-redefinindo-o-varejo-preditivo