The evolution of retail media has enabled grocery retailers to monetize their platforms like never before, transforming the advertising landscape and delivering highly targeted ads to shoppers.
Traditionally, this model mostly relied on digital ads displayed in apps and on websites; however, the approach is quickly evolving to encompass physical stores, creating more touchpoints to engage customers.
Megan Harbold, strategic advisor for the omnichannel media platform Skai, sat down with The Food Institute to share her insights regarding the growing trend that includes digital displays in aisles, AI product recommendations, digitized shopping carts, and more.
“Retail media networks have expanded from online banners to in-store digital displays, connecting advertisers with consumers in real time,” Harbold told FI.
“As an advertiser, I want to be able to leverage that rich first-party membership program in how I’m targeting in-store. Those types of experiences are being tested, and a lot of learnings are coming out.”
While retail media remains a significant focus, many grocery chains are now refocusing their attention on enhancing their membership programs.
Advances in technology, especially generative AI, are now making it much easier for retailers to customize offers based on individual shopping behaviors.
“Membership programs started as loyalty drivers, but now, they’re all about personalization,” Harbold said. “With advances in generative AI and other technologies, hyper-personalization is for sure a part of what makes these valuable.”
Retail giants like Kroger and Albertsons have largely led the charge, combining retail media efforts with enhanced membership perks like subscriptions to popular streaming platforms with great results.
The chains have invested in both in-store and digital ad networks while also leveraging their membership data to deliver highly specific offers – an approach that’s not only driving sales but also providing a wealth of first-party data that can be used for future marketing strategies.
“Membership programs provide a goldmine of first-party data that gives you a source to sell or to make attractive to an advertiser,” Harbold said.
“It allows advertisers to target the audience they now own in a very high-margin way.”
As more and more grocers continue to evolve their retail media strategies, it’s clear that the next frontier lies in creating an effective blend of highly targeted advertising and personalized membership programs.
