Nordstrom plans ad expansion as retail media network generates $40 million

Nordstrom is sharing more details about its advertising program to pique the interest of brands as they adjust their strategies to account for the privacy winds that have shaken major platforms. Retail media has become increasingly competitive as premium data increases in value amid Google’s plan to phase out cookies, and Apple is making your mobile identification an optional feature. The latest change has already impacted the progress of the Facebook campaign.

Having both online and in-store stores gives brick-and-mortar businesses an advantage that once seemed second in the race for the digital dollar. While Nordstrom’s attempt to enter the market is recent, it already generates tens of millions in revenue and has developed close ties with marketers like L’Oréal’s Luxe group, which owns Lancôme and Kiehl’s brands. In a call earlier this week to discuss fourth-quarter results, the executives also asked for an opportunity to help new entrants scale.

“If you look at our digital business, it’s great,” CEO Erik Nordstrom said at the analyst conference. “This is one of the key features that allow us to be the software partner for many emerging brands, especially digital-native brands, allowing us to expose their brands to many people who would not otherwise see them.”

In the past, many direct-to-consumer brands built their reputation through performance-driven campaigns on Facebook and Instagram. But the social media giant’s ongoing battle with Apple’s tracking changes could encourage newcomers to spend elsewhere.

Nordstrom is building the Nordstrom Media Network as part of its larger mission Closer to You, which focuses on personalizing the customer experience. This effort involved an extensive advertising campaign and growth roadmap focused on improving services, expanding Nordstrom’s service partners and product portfolio, and better using technology to map a complete picture of customer behavior.

Nordstrom Media Network currently manages on-site media placements, such as sponsored product ads and branded pages, and off-site options, including paid social and display ads, YouTube video ads, search and store ads, and affiliate campaigns. . According to Nordstrom’s website, native display pages will be added to the bundle soon on site. Nordstrom recently launched new retail channels that seek to capitalize on the e-commerce boom and can be incorporated into the Nordstrom Media Network. Last March, it launched a live shopping portal, adding momentum to the virtual events that have become commonplace during the pandemic.

Nordstrom is launching its advertising products at a time when other retailers are seeing their advertising programs reach new levels of maturity. Walmart now generates $2 billion annually from advertising and implements its demand platform, which is a complex piece of advertising technology. Target, which also reported earnings this week, said it plans to expand its Roundel media network to a $2 billion business in the next few years.