Are Albertsons and Tesco too late for the retail media party?
Albertsons, the third-largest grocer in the U.S., and Tesco, the UK’s largest retailer, recently launched their own retail media networks to join the race against Amazon.com and other retail rivals.
Albertsons’ media program taps 27 million Just for U loyalty members. Media opportunities include advertising placements on Albertsons’ homepage, department, category, sub-category, email, search, app and pharmacy, as well as on off-site targeted ad placements.
Tesco’s media network, powered by dunnhumby, offers advertisers access to the U.K.-based supermarket chain’s 20 million Clubcard customer loyalty database for ad targeting and insights across everything from one-to-one personalization through to broader mass reach campaigns.
The acceleration in e-commerce caused by the pandemic subsequently led to a surge in ad placements on retailers’ e-commerce sites and apps in order to influence consumers at the increasingly omnichannel point of purchase.
EMarketer identified retail media as one of 2022’s top five retail trends, predicting that it will account for 17.2 percent of U.S. digital sales, up from 14.9 percent in 2021 and 13.4 percent in 2020.
“The low-hanging fruit of retail media has been bottom-funnel search ads. But various retail media networks are evolving their ad offerings to include more upper-funnel, awareness-driving formats like digital display and video,” eMarketer wrote in a report. “Several also have their own demand-side platforms (DSPs) or partner with other DSPs to deliver targeted ads beyond their owned and operated sites, including in ad-supported CTV.”
Forrester’s “Predictions 2022” report forecasts that retail media spend will outpace Netflix and YouTube this year. Forrester wrote, “As zero- and first-party data becomes mission-critical for marketers in 2022, data-rich retail media networks will rise to the occasion.”
Best Buy and Dollar Tree also garnered buzz in 2021 with media network launches, joining Walmart, Target, Kroger, CVS, Walgreens, Macy’s, Home Depot, Best Buy and others.
Amazon, however, remains far in the lead. According to eMarketer, Amazon’s share of U.S. digital media revenue was 77.7 percent in 2021, up from 76.6 percent in 2020 and is only expected to slip to 76.9 percent in 2022, despite the competition. Rounding out the top three for 2021 was Walmart, with a 5.4 percent share, and Instacart, 1.7 percent.
- Albertsons Companies Unveils New Retail Media Network – Albertsons
- Tesco launches the UK’s largest closed loop grocery Media and Insight platform, powered by dunnhumby – Tesco
- The rise of retail media is one of 2022’s top 5 retail trends – eMarketer
- Predictions 2022: Advertisers Lean Into Retail Media Momentum, New Modes, And, Yes, The Metaverse – Forrester
- Why More Retailers Have Media Networks And What The Rise Means For Agencies – Advertising Age
- What Does the Ideal Retail Media Network Look Like? – Adweek
- Family Dollar joins a crowded retail media marketplace – RetailWire
DISCUSSION QUESTIONS: Can newer entrants such as Albertsons and Tesco find significant success in the retail media space against other retailers who have a head start? What’s your overall outlook for retail media spend in the years ahead?
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10 Comments on "Are Albertsons and Tesco too late for the retail media party?"
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Retail Industry Strategy, Esri
They will be successful. These are both huge brands with strong customer bases that will attract marketing spend from across their vendor community. I believe that these platforms have tremendous upside to companies interested in targeted messaging that will reach customers when they’re most likely to be in buy mode and more open to promotional messaging. I also believe using these networks is an effective way to reach consumers who otherwise avoid ads and tracking technology.
Managing Director, GlobalData
Tesco is definitely not too late. Despite the growth of Amazon, it remains the UK’s leading grocer and has way more customers than any other supermarket player. On top of that, because it was a first mover with its Clubcard – which was developed with dunnhumby – it has masses of customer data which can be used to target advertising and marketing. Albertsons does not have quite so many advantages, but it is a big firm with a large audience and that’s enough to make this work.
President, Spieckerman Retail
Tesco and Albertsons aren’t too late, if only because both companies’ brand partners will want to tap into the data and scale that both retailers offer. Once retailers build in-house agencies, they generally expect their brand partners to utilize them. Retailers essentially have a captive audience for their ad forays, ensuring viability and revenue.
Senior Analyst, Bloomberg Intelligence
Loyal customer households drive insights, so Albertsons and Tesco, both of which have good loyalty programs, should be able to generate some higher-margin revenue with the service. There is a danger that retail media is becoming a more commoditized service as more retailers jump in. To be successful, some differentiation will be necessary – either in terms of customer base, aggregated data or history to drive use and revenue.
Industry Consulting, Retail, CPG and Hospitality
Neither are too late, as both have huge loyalty bases that will engage with the ads. Scale plays an important part in the success of these programs, but so does the ability to offer differentiated value that can’t be derived from other similar media offerings. For Albertsons and Tesco to be successful over the long term, they’ll have to continually innovate on their network, making the case for strong ROI for advertisers as well as engaging, utility-driven offers for shoppers.
Managing Editor, RetailWire
Here’s some more info on what’s driving retail media spend. According to a survey of U.S. CPG brands commissioned by Merkle last October, the leading reason to work with retail media networks was to gain access to retail’s first-party data, cited by 62 percent against 33 percent in the 2020 survey. Other top reasons for working with retail media included build a stronger relationship with the retailer, cited by 51 percent; better understand the retailer’s shopper, also 51 percent; leverage owned and operated retail inventory, 49 percent; open co-branding opportunities, 37 percent; and deliver more personalized communications, 34 percent.
President, SSR Retail LLC
Better too late than never. But in this case, there is ample opportunity to be part of the retail media space, especially with well-known brands like these.
VP of Strategy, Aptos
It’s not ever going to be too late for a large retailer to add a media opportunity to their offering to brands. I think where companies like Tesco and Albertsons can differentiate from Amazon is in the more collaborative approach they can take – that this is part of a whole package that meets mutual objectives, rather than just another transaction. And it seems like this kind of more collaborative relationship is more what the brands are looking for anyway.
SVP Global Marketing, Fluent Commerce
Definitely not too late. And a smart move. What will be even more interesting will be watching which brands take advantage of it best. Smart brands are looking at the performance of their ads across all their channels including DTC ecomm, marketplaces, paid search, retail partners, etc. and taking lessons from one to help optimize another.
Retail Transformation Thought Leader, Advisor, & Strategist
They are definitely not too late! I’ve been speaking about this across many podcasts and webinars, and it’s been part of my own retail prediction for 2022 since October. This isn’t about grabbing market share in total retail media ad dollars — it’s about two things: additional revenue source for the retailer, and gaining more data on your customers’ shopping habits, especially with cookies going away.
There are many incentives for retailers to do this, but you do need to be a large enough retailer with a meaningful marketplace to drive ad unit supply. Home Depot has been doing this successfully, Target is doing it well, Walmart, and so on. Even if Amazon is by far the market share leader, there is plenty of ad revenue to go around. Most of this comes at the expense of other ad sources; it’s not a zero-sum game. Google and Facebook may want to watch this trend closely!