Australian Retail Media Growth Needs Surgical Approach, Not Broad Strokes
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Australian retailers and brands are being urged to adopt a more precise, data-driven approach to retail media, moving away from traditional broad-stroke advertising. Experts from Omnicom and Flywheel Australia highlight that significant growth in the Australian market is often missed by conventional spending, which fails to identify specific products, shopper segments, and critical moments that drive compounding sales.
According to Mohammad Heidari Far, Managing Director of Flywheel Australia, the unit of precision required for effective retail media is much smaller than most current strategies allow. He emphasizes that treating diverse shopper groups, such as grocery, marketplace, and quick commerce customers, as a single audience is a misstep. Instead, surgical growth begins with identifying the initial product a customer buys, as this ‘point of market entry’ can predict their long-term value (CLTV) to the brand portfolio.
Targeting Hidden Growth Pockets
This refined approach relies on connecting product-level purchase data directly to a customer’s identity, transforming targeting from probabilistic guesswork into a near-deterministic process. An example cited involves a consumer health group with two related brands. Cross-purchase analysis revealed that 24 per cent of new-to-brand customers for the first brand bought a product from the second brand within three months, often on a different day, showing a sequential path that a single-brand view would not typically detect.
Such insights allow brands to deliberately engineer customer journeys rather than leaving them to chance. Other insights reveal that shoppers who convert more than a day after seeing an advertisement tend to have larger basket sizes, indicating that plans solely focused on same-day returns may undervalue their most valuable customers.
“The focus shifts from simply measuring sales volume to understanding customer entry points that can build sustained growth over several years.”
using Data and Automation
In Australia, precision data access varies significantly. While Amazon offers self-service access to product and customer signals, similar insights from other major retailers typically require collaboration with their internal media teams, introducing potential delays and interpretation layers. Far suggests that brands should utilize mature environments like Amazon to develop frameworks and ‘muscle memory’ for precise targeting, preparing them to exploit similar capabilities as other retail media networks in the region evolve.
Managing thousands of micro-segments manually would be overwhelming, so automation is key. Flywheel Commerce Cloud provides a standardized layer that handles repeatable decisions, freeing human teams to focus on critical judgement calls, such as identifying key ‘front door’ products or strategic cross-brand paths to fund. This blend of automation and human insight proved effective for the consumer health brand, which re-sequenced its plan around these signals for a major sales event. By retargeting first-brand buyers with the second brand at opportune moments and applying negative targeting at pharmacy retailers to ensure incremental sales, the brand saw new-to-brand sales rise by 47 per cent and return on ad spend more than doubled year-on-year. This precision also led to a fall in cost per click during peak trading due to hour-by-hour bidding adjustments.
The Australian retail market is highly concentrated, with five major retailers commanding roughly a third of all sales. In this environment, brands that can surgically identify and pursue growth opportunities will gain a competitive edge over those with broader, less targeted spending. The focus shifts from simply measuring sales volume to understanding customer entry points that can build sustained growth over several years.
Retailers across the Asia-Pacific region, many of whom are developing their own retail media networks, could benefit from similar data-driven strategies. As e-commerce penetration and digital advertising grow across markets like Southeast Asia and India, the ability to turn broad customer data into actionable, surgical campaigns will be a crucial differentiator for brands seeking to optimize their marketing spend and deepen customer relationships.
Questions & Answers
Q.What is meant by a 'surgical approach' to retail media?
What is meant by a 'surgical approach' to retail media?
A surgical approach means using precise, data-driven methods to identify specific products, shopper segments, and critical moments. This contrasts with traditional broad-stroke advertising and helps target hidden growth pockets more effectively.
Q.How does data access for precision targeting differ between Amazon and other major Australian retailers?
How does data access for precision targeting differ between Amazon and other major Australian retailers?
Amazon offers self-service access to product and customer signals for brands. However, obtaining similar insights from other major retailers typically requires collaborating with their internal media teams, which can introduce delays.
Q.What impact did applying these precision methods have for the consumer health group mentioned?
What impact did applying these precision methods have for the consumer health group mentioned?
By re-sequencing its plan around customer signals, the brand saw new-to-brand sales rise by 47 per cent. Its return on ad spend more than doubled year-on-year, and cost per click fell during peak trading periods.
Q.What is the significance of the initial product a customer buys?
What is the significance of the initial product a customer buys?
The initial product, or 'point of market entry,' can predict a customer's long-term value to the brand portfolio. Identifying this allows brands to engineer customer journeys deliberately, rather than leaving them to chance.
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