Source: lowes.com
Will advertisers benefit as Lowe’s brings its retail media sales and ops under one roof?
Lowe’s is bringing all of its One Roof Media Network ad sales and operations in-house.
The home improvement retailer yesterday said that the move, effective Jan. 31, will allow it to control all elements of its relationship with advertisers and partner with them in ways to achieve more meaningful interactions with the shoppers on lowes.com and in the chain’s stores.
“This is the next step in becoming a best-in-class media network and delivering white-glove customer service for our brand partners,” said Jen Wilson, Lowe’s senior vice president, enterprise brand and marketing, in a statement. “Managing these functions internally under one roof will enable us to build stronger, more compelling campaigns better aligned with our brands and customers’ interests and needs, which in turn will drive increased shopper engagement and greater ROI for our advertisers.”
Lowe’s launched its One Roof Media Network in 2021 and has made continued investments that it says improves the ability of advertisers to mine its first-party data for deeper insights into the chain’s customers. The company also said advertisers have access to “faster and more efficient” launches and management of campaigns on lowes.com. The retailer’s in-house experts are able to work with brands to help them scale, personalize and optimize search campaigns through in-house partnerships with Lowe’s merchandising, marketing and operations departments.
Lowe’s One Roof Media Network has more than 200 clients, including Moen, Stanley Black & Decker and Whirlpool, whose products are sold in the chain’s stores, through its app and online. The home improvement chain claims that many of its advertisers are achieving results that outpace their efforts on competing retail media networks.
“Retail media is among the fastest-growing segments of digital advertising globally,” said Abi Subramanian, vice president and general manager of Lowe’s One Roof Media Network. “As we continue to grow this business, we’ll remain laser-focused on evolving our advertising capabilities and technology to deliver the best marketing solutions for our brands in 2023 and beyond.”
Lowe’s reported a better-than-expected three percent same-store sales gain in the third quarter, ending Oct. 28. The chain’s performance was buoyed by sales to the professional market, which grew 16 percent year-over year, the tenth straight quarter of gains.
Discussion Questions
DISCUSSION QUESTIONS: Will advertisers benefit from Lowe’s decision to bring its retail media operations under one roof? Where do you see the biggest opportunities and challenges facing retailers looking to develop and scale their own digital ad networks?
Poll
Loading …BrainTrust
Camille P. Schuster, PhD.
President, Global Collaborations, Inc.
DeAnn Campbell
Head of Retail Insights, AAG Consulting Group
An outside firm like Criteo or CitrusAd:
An internal team:
This is pure margin business. The fact that Lowe’s needs to have that margin internally instead means that it may not be about margin at all. It’s possible the program is failing in some way and needs to be fixed before scaling again.
A lot of speculation without data!
RMNs can add income for the retailer, capitalizing on their traffic. The revenue can be very substantial. It also can be considered a distraction and cost center from a retailer’s core business which could be an issue.
Eliminating silos to converge decision making and manage results across all stakeholders is not just the best way, it’s the only way to run a successful retail media network. Because the industry is so new, many retailers aren’t clear where to place ownership. Some companies assign digital media to marketing, others to IT, with little cross departmental collaboration. Lowe’s, Target (Roundel) and Walmart are among the first to recognize the importance of a cross-functional dedicated team to manage the resulting outputs like data, customer experience or ad revenue.
Positioning Lowe’s media evolution as being a benefit to advertisers is a bit of a stretch. No doubt it will make it easier for advertisers to directly work with Lowe’s but the move clearly benefits the retailer primarily. Lowe’s is leaning into the highly-profitable retail media space for obvious reasons. Ideally, Lowe’s will build a dedicated, media-savvy team that will assess its current media ecosystem, set a clear vision, and align with merchandising and marketing teams both online and in-store. Centralization requires holistic thinking and the ability to align disparate teams, even if it means enlisting outside support to bring it all together initially.
While the opportunities that Lowe’s is expecting may happen, the new juggling act will be challenging. On the one hand, Lowe’s will need to have employees who excel at all creative forms and media. In addition to coordinating with all the various media outlets, Lowe’s will also have to manage relationships and creative approaches for the brands sold at their stores. This will definitely be an experiment to watch.
Consolidating retail media operations will help Lowe’s reduce costly redundancies and drive new growth. Advertisers will win as Lowe’s makes its media offerings more integrated, streamlined and measurable.
Retailers’ biggest opportunities include smashing media silos to work as a single, efficient team and making the entire media process more visible. Challenges include the initial large outlay of resources to build an attractive retail media infrastructure.
They’ve obviously learned a few things since launching One Roof if they are bringing this all together internally. Having worked in marketing for a major retailer as well as a brand manufacturer, I can see where this would create some friction between teams with a lack of integrated communication and processes. Eventually, their contacts on both sides (vendor and advertising) are going to see and feel this friction while growing frustrated with Lowe’s.
I’ve heard this many times at many companies — the competition is outside. But when you create your own competition (and on the outside!) eventually it will become an ugly issue. Bravo Lowe’s, for recognizing these ugly silos and awkward vendor/customer experiences, and pulling it together!
I expect Lowe’s to discover some unexpected downsides from this move. What isn’t clear is whether there are problems driving the move. If there aren’t, then it seems like a stretch to believe this will strengthen their operation.
Lowe’s will benefit, but the advertisers? Not necessarily so much. Done correctly, retail media has the potential to enhance retailers’ revenue streams, but it isn’t a level playing field. When retailers make more money it’s usually at somebody else’s expense.
Any vertical integration move will be one that saves money and maximizes efficiencies. This is a direction many large retailers are going, but the big question is, do they have the expertise a dedicated agency would have to accomplish this as successfully? As long as they’ve been building the right team internally and strengthening this muscle, I’d think it will work. The key is that this can’t be merely a cost-savings action, it has to be strategic as well based on knowing their strengths. Hopefully this is one of theirs!
Retail media — selling advertising — presents an important and growing revenue stream for retailers. Retailers have what companies selling consumer goods want — detailed knowledge of and a direct transactional relationship with the consumer — this makes retailer ability to target consumers very valuable.
Maximising value for the retailer revolves around providing a consistent and high-quality approach for the advertising companies using the service. This will become more important as more competition in advertising providers (i.e. retailers) seek to compete for advertising dollars. Consequently, bringing this together under a single entity to provide the necessary service makes huge amounts of sense — definitely something others can learn from.