What can we learn from Village's Zitcha/retail media deal?
Full disclosure - I think Zitcha is a great business.
Jack Byrne, who founded the agency Hatched, is a friend. The idea I think is a good one.
But I think the Village / Zitcha deal (which you can read about here: https://www.mi-3.com.au/05-07-2023/village-set-launch-retail-media-play-signs-zitcha) is an interesting one for what it signals is possible, and what Zitcha may be doing as a business. It seems to be to be the early signals of trying to get all brands to sell media, rather than just one.
That could spell trouble for conventional media, particularly in a world where brands control a lot of consumer-facing real estate via apps, websites, email lists and more. I suspect a lot of media owners would be reviewing the Zitcha deal with some nerves as a result.
Recap on retail media and Zitcha
Retail media, to me, is a simple thing to understand. Personally I think it’s mostly a rebranding of existing media assets to help media buyers better understand what to buy, and brands understand that they can sell media near their transactions. Both are as much about market education in B2B as the product itself.
After all, billboards have been around shopping malls for years. It’s only today we’re calling them retail media.
Zitcha is a play to expand this thinking in my view. With Zitcha, you can basically empower most businesses that have space for media assets to sell media. Most businesses, particularly those with foot traffic or web traffic on the regular, will have the ability to show media to that traffic. The real question then becomes how do they set the infrastructure up to do this at scale.
This is where the retail media plays come in.
The Village deal - is it even retail media?
There’s an argument to say the Village deal is the first symptom of this trend. I mean, is Village even a ‘retailer’ in the way we’ve understood that landscape? I’d say many people would say no. But in a sense, they’re selling products on floorspace. People are buying things on floorspace. And those products can be varied and amongst lots of vendors.
It broadens the scope of retail to anyone who sells multiple product lines on their floor that’s not theirs. In the longer term, I think this goes beyond that. Anywhere that someone is transacting, where another related product can exist, may be fair game for setting up a retail media play.
This might make the asset and market play of retail media much bigger than anyone thought.
Consequences of such a deal
The deal itself isn’t revolutionary, but if I take it to the extreme, it likely means we see a lot more deals in places where consumers are transacting. Off the top of my head, I can see a range of examples where we may see ‘retail media’, or a version of it, rollout if my assumptions on Zitcha are correct:
Bank branches. Loads of people go into banks to get car loans or holiday loans. You could see extreme value in Qantas, Ford or others advertising in a bank branch just as someone got their loan approved.
Telco stores. Definitely huge scope to sell media, accessories or other key elements quickly. I can see lots of apps, headphone companies and so on advertising in that kind of environment (new phone, new accessories).
Car dealerships. You can see all sorts of things coming up as you buy a new car - travel advertising, maybe car accessories.
Real estate agents. I find this one fascinating. People buying a new home are in-market for all sorts of things, and I can see this being a huge place to drop advertising to drive transactions.
In short, there could be a whole wave of new assets unlocked if the Zitcha business model gets going. Which is hugely exciting, given how much advertising inventory has been degraded by the likes of Netflix, Stan and other vendors.
The future of retail media Zitcha might be pursuing is media and brand partnerships everywhere…
Long-term, the play for retail media might morph into brands selling media. And if that’s true, I think there’s a huge shift to unlock the potential of brands selling ad inventory. It’s a huge opportunity, and I for one am excited to watch it play out on the sidelines.