After 4 years of advertiser growth, The Home Depot Inc. relaunched its retail media network in March as Orange Apron Media. The brand new changes offer a glimpse at how the corporate is positioning itself in a maturing landscape for retailers.
In making the updates, the house improvement store desires to help differentiate its offerings from those of retail media networks, said Melanie Babcock, The Home Depot’s vp of Orange Apron Media and monetization.
The Home Depot selected “orange” due to its strong association with its brand. It selected the word “apron” to symbolize the service its associates provide to its suppliers, she explained.
Currently, The Home Depot has just a few thousand suppliers that publicize in its retail media network. Over the following few years, the retail chain has the goal of doubling that number by adding just a few thousand more, Babcock said.
The Orange Apron Media network allows suppliers to purchase ads on several places on HomeDepot.com. Those spots include top-of-the-page banners, sponsored product carousels and within the filtering grid. Suppliers also can buy ad spots in promotional emails The Home Depot sends. Plus, in 100 Home Depot Stores, suppliers should buy ads and display content on TV screens positioned within the aisles and endcaps. Home Depot operates greater than 2,300 stores, in line with its website.
Home Depot says its retail network advertisers receive not less than a two-times return on their ad spend. And on average, shoppers spend 28% more per visit and are 26% more prone to convert after clicking on an ad within the Home Depot retail media network.
Why Home Depot says its retail media ads profit suppliers
These ads can bring traction to products which will otherwise be hard to seek out inside its thousands and thousands of online SKUs. Home Depot’s search results are built off an algorithm with many attributes, including incessantly bought, Babcock said.
“Should you are a brand new product and also you don’t have incessantly bought, and also you don’t have that history, then possibly you come up on the second or third page of search results. Promoting helps to interrupt through to the front page,” Babcock said. “So these are situations where promoting does help the supplier who may not have the preferred products or they’re a brand new product — it helps them get noticed and purchased at Home Depot.”
Home Depot says this is very important when considering its shoppers. In some cases, they could be doing a selected home project for the primary time. In others, they won’t have tackled the project in greater than five years. Consequently, shoppers may have to be reminded of what related products they should get when buying something — like paint, as an example. In those cases, ads can assist showcase a relevant product on the suitable product page.
For instance, if a consumer is replacing her faucet, she may have information in regards to the recent technologies in faucets which have modified because the last time she replaced one.
“Ads tell that story and convey that innovation to you quicker than possibly organic results,” she said.
Adding utility for shoppers
While these ads may help suppliers, Paula Rosenblum, co-founder and managing partner at retail consulting firm RSR Research, said they could be annoying for shoppers.
“I don’t think the client loves sponsored ads online,” she said. “I used to be just reading a few of Amazon’s story of retail network promoting and was reminded how irritating it’s to me as I work my way through the ads to the actual product listings.”
“It’s hard to stop once you begin down this road and it finally ends up watering down credibility,” Rosenblum adds.
As a substitute, Rosenblum suggests that ads on Home Depot that could possibly be more helpful could be people who linked to videos about install products or use the product.
Improving attribution for ads
With this rebrand, The Home Depot is emphasizing a few of the features its retail media network offers to assist smaller suppliers that don’t have as much media savvy. For them, the retail chain offers webinars, newsletters, product content help and an individual to call to assist the effectiveness of their ads, Babcock said.
Plus, suppliers can leverage the first-party data from the retail media network. That may enable them to retarget shoppers on other channels, resembling social media.
Babcock says promoting on retail media networks is just like the last mile of promoting. She likens it to the last mile in success. The latter is widely often known as the shortest but most costly and demanding a part of the ecommerce delivery process.
“I consider the CMO or the top of selling continues to be under pressure around driving value within the business,” Babcock said.
It’s hard for marketing executives to know whether their commercial on TV or in a catalog to extend brand awareness actually drove a consumer to buy, Babcock said. With retail media ads, a consumer is clicking on the ad at the purpose where conversion is prone to occur. Thus, marketers can have a option to measure if their ads drove sales in that last mile of promoting.
Strengthening the supplier relationship
Some retail media networks can drive incremental revenue for brands. Meanwhile, Amazon generated $46.9 billion from promoting sales in 2023. The Home Depot says its program’s goal is to offer a profit for its suppliers.
“We’re in a fortunate situation where The Home Depot is healthy all by itself, and we see this program not as [a] big P&L driver — but we see it as a supplier stickiness program. How can we get [them] to like Home Depot and spend money on Home Depot?” Babcock said.
Suppliers have many facets to their relationship with a retailer, resembling supply chain investment, merchandising and design services. Babcock hopes the Orange Apron Media network might be one other prong of a supplier’s relationship with Home Depot.
The Home Depot is No. 4 within the Top 1000. The database is Digital Commerce 360’s rating of the biggest North American online retailers.
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