By Alasdair Fey, Digital Campaign Manager at midnight, the innovation agency of iqbusiness
Retail media has emerged as an advertising powerhouse in the international market, becoming a major revenue generator for players such as Amazon over the past few years. Now, the trend is catching on in South Africa as leading online retailers such as Takealot, Checkers Sixty60, Makro, and Woolworths adopt retail media to boost their revenues and shopper engagement.
Marketers should be paying close attention to how these platforms evolve because they offer an exciting new performance marketing opportunity. Indeed, many leading brands are already investigating and exploring retail media platforms to get a competitive edge, including leveraging artificial intelligence (AI) to personalise ads and enhance targeting.
So, what is retail media and why is it taking off in South African ecommerce?
Retail media is a form of advertising that allows companies to use a retailer’s properties, such as websites, apps, and in-store displays, to target consumers who are shopping actively or considering purchases. It has existed in offline formats like point of sale displays and print catalogues for decades, but online platforms make retail media far more targeted, measurable and immediate.
South African brands are starting to embrace online retail media as a powerful new way to connect with shoppers at the moment they ready to buy. Much like programmatic platforms like the META apps or Google, retail media offers marketers powerful tools to segment audiences and target their ads. They can reach their customers in a retailer’s digital space, at the very instant they are researching or considering a purchase.
Big growth, big opportunity
The rapid rise of ecommerce is the factor that has set the stage for the boom in retail media. Data from platforms like DataReportal confirms that growing numbers of people are shopping online, making digital platforms a big part of how customers buy today. World Wide Worx data shows that South African online retail surged 29% to R71 billion in 2023. Online accounts for 6% of total retail spend, and is forecast to touch about 10% by 2026.
Beyond driving their own direct retail sales, leading retailers have spotted an opportunity to monetise their audiences by allowing third parties to trade from and advertise on their platforms. Retail media platforms like Rainmaker Media (owned by Massmart) and Takealot Ads are helping brands to target their audiences with adverts. These platforms are investing in AI features to improve ad placements, product suggestions, and pricing to help brands get better results.
Why retail media matters for your brand
Given that many brands have found online advertising formulas that work well for them, why should they add yet another option to the proven mix of display, search and social ads? A compelling reason lies in the fact that retail media is new and growing fast – starting early is an opportunity to learn about the environment while is still relatively uncluttered.
One of the strong advantages of retail media, as I alluded to earlier, is the immediacy of the connection it offers to high-intent shoppers. Retail media puts your brand or product in front of customers who are already shopping or ready to buy, boosting your chances of conversion. In many cases, you will have access to the retailer’s first party data to create more precise, relevant ads that resonate with shoppers at high-impact moments in the conversion journey.
Furthermore, retail media is an accountable medium with closed loop reporting. Retail media shows you exactly how ads lead to sales, giving you a complete view from ad click to purchase. The sophisticated AI and machine learning tools in some platforms enhances the accuracy and measurability of your ads, helping you to test, learn, and optimise to keep your ads effective in a fast-moving market.
Finally, retail media integrates well with your other digital marketing channels, ensuring consistent messaging and reinforcing your brand across different platforms. We see it as a powerful way to create stronger connections with shoppers, make smarter, data-driven decision and drive sales in a competitive digital space. In future, we could imagine it becoming an integral part of many consumer brands’ digital marketing plans.
Article by Alasdair Fey, Digital Campaign Manager at midnight, the innovation agency of iqbusiness, Africa’s future-focused management and digital growth enabler.
Alasdair has spent the past two years driving client-centric digital marketing initiatives, with a strong focus on campaign execution and digital platform management. He is passionate about delivering measurable results and continuously growing his expertise in the evolving digital media landscape.
About iqbusiness
iqbusiness is Africa’s future-focused management and digital growth enabler, founded with over 26 years’ experience. Led by some of the continent’s best thinkers and doers, our purpose is simple: to grow people, business and Africa as one.
Established in South Africa in 1998, IQbusiness integrated into Reunert ICT in 2023 and merged with +OneX in 2024. Together, we offer a full-service suite of digital, cloud and security services, managed services, digital and management consulting, digital media, end user computing, unified communications and software development across the continent.
Our scale and unique capabilities mean we unlock exponential value and global growth for our clients. Renowned for our tenacious GESHIDO ® energy, and determination to deliver projects of excellence and meaning, we are a proud level 1 B-BEE contributor and hold B-Corp, Conscious Companies and Top Employer status. For more information, visit www.iqbusiness.net.
