3 Major Players Leveraging In-Store Media Networks in Digital Grocery
At a Glance
- Brick-and-mortar stores continue to be the prime source of revenue for many grocers
- Store sales accounted for 86.1% of overall grocery sales in Q1 2023 versus 13.9% of digital sales.
- In-store media network opportunities have returned at scale
- Grocery retailers are looking to appeal to more customers with innovations like interactive displays
- This article looks at how some of the key players, like Walmart, Kroger, and Ahold Delhaize, are leveraging in-store media networks
Brick-and-mortar stores continue to be the prime source of revenue for many grocers despite the substantial amount of investments that have been made in digital platforms, including retail media networks, in recent years. As per the recent Grocery Doppio Performance Scorecard, store sales accounted for 86.1% of overall grocery sales in the first quarter of 2023 versus 13.9% of digital sales.
While the popularity of online retail media networks soared during the pandemic, in-store media network opportunities have returned at scale as well. What is interesting is that the in-store media networks are coming back with a little more vigor than before. Grocery retailers are looking to appeal to more customers with innovations like interactive displays.
Previous articles in this series have explored the benefits and challenges of in-store media networks; below we look at how some of the major players are leveraging these media opportunities:
Walmart Media Group was renamed Walmart Connect in early 2021 with a goal to rank among the world’s top advertising platforms within five years. Walmart Connect is a retail media network that gives advertisers a chance to engage with Walmart customers across its online and offline (brick-and-mortar) channels. Walmart Connect witnessed 40% growth during Q4 2022. With 4,700 stores across the U.S., Walmart Connect has an excellent opportunity to maximize its benefits from its in-store media formats.
Nearly 170,000 screens have been placed across its stores, enabling Walmart Connect to offer brands a place to engage with customers as they shop in physical stores. Walmart uses self-checkout screens and TV walls to showcase display advertisements. “The majority of sales happen in-store, making it crucial for Walmart to have value propositions that can reach customers in that mode,” according to Walmart Connect’s Senior Vice President and General Manager, Rich Lehrfeld.
Kroger’s retail media arm, Kroger Precision Marketing (KPM), allows brands to run display ads and sponsored searches directly on its channels. Last year, Kroger decided to expand its retail media offerings through video offerings and CTV, along with additional programmatic abilities. Advertisers gain access to audience intelligence via sales data, can tailor video inventory and CTV in a centralized marketplace, and measure campaign metrics like household penetration and attributable retail sales.
“Streaming is the number-one way people consume TV today,” said KPM’s Senior Vice President, Cara Pratt. “That means the majority of TV viewing hours can now be optimized in the programmatic environment. Our retail data precisely reaches households — such as lapsed or infrequent brand buyers — and then matches advertising exposure to store sales to measure brand impact.” Additionally, the KPM-Disney Media partnership was announced recently to enable brands to target customers through streaming media. Through Kroger’s 84.51° analytics subsidiary, Kroger’s vast customer database and KPM’s data science will be leveraged under a limited beta test to connect Disney’s premium content inventory with high-value streaming program audiences in order to expand the reach of the advertisers.
Ahold Delhaize’s Peapod Digital Lab decided to completely transition the retail media operations in-house last year. Its retail media wing will expand its current team through this year, tripling to more than 70 individuals. Ahold Delhaize will launch a new data collaboration tool for brands, a unified off-site and onsite advertising platform, and a single dashboard for monitoring campaign performance.
“We launched our new platform with Citrus Ad and Epsilon with a unified onsite/offsite platform. This provides one platform for buying media and for measurement. The other thing that we're focused on is continuing to build out our ad tech ecosystem,” said Head of AD Retail Media, Bobby Watts, in an interview. “We are starting to bring all these endpoints into one ad-serving solution so that we can understand all the touchpoints. This means we will be able to serve a social post or onsite posts to customers on a path to purchase. We will also be able to hit them with a programmatic billboard on their way to the store or via in-store digital screens.”