The news: Best Buy launched an in-house media company, Best Buy Ads, per a company announcement on Tuesday.
What this means: Best Buy joins several other major retailers, like Amazon, Walmart, Kroger, CVS, and Instacart, in hopping on the retail media network bandwagon. While ads on retailer sites aren’t anything new, the twin tailwinds of rising ecommerce sales and the increasing importance of first-party data have kicked the trend into high gear.
Large retailers are finding that ad networks are a win-win: They gain an extra revenue stream to help offset inflation and other cost pressures, while brands can leverage retailers’ treasure trove of customer data and get as close to the point of purchase as possible.
Why it matters to marketers: Best Buy’s electronics focus makes it an especially attractive offering for brands, as many of the top retailers with media networks specialize in grocery and home goods. In terms of electronics sales, the chain is only beaten by Amazon—but as Amazon’s ad prices rise, Best Buy offers a more specialized (and potentially cheaper) option.
Key stats: Last year, Best Buy’s US retail ecommerce sales actually fell by 9.9%. However, that was likely a normalization from 2020, when the company’s sales increased by 144.5% to $18.68 billion as consumers loaded up on electronics early in the pandemic.
For more on this topic, check out our “Retail Media Advertising 2021” report.