Grocery Retail Media Networks Are Evolving – Here’s How And Why

When seemingly every industry has its own version of a retail media network (RMN), grocery chains stand out with unique customer data and insight into actual consumer buying behavior.

These are people who are willing to spend money, said Bobby Gibbs, head of the retail and consumer goods practice at consulting firm Oliver Wyman.

“It helps increase the appeal [to advertisers] compared to a more general platform,” he said.

Grocery stores, on the other hand, operate with very low margins and are always looking for ways to increase profits without raising prices. Consumer aversion to price increases has peaked in recent years as inflation has soared.

Retail chains therefore understand the value of their customer data and the potential of retail media.

RMN revenue in the U.S. alone is expected to reach $129.9 billion by 2028, according to the Mars United Retail Media Report Card, representing nearly one-quarter of all U.S. media spending by that time. Grocery retail media is projected to reach $8.5 billion last year, according to grocery research firm Grocery Doppio.

There is no easy button for retail media

In many ways, the rise of retail media networks represents an evolution of the established relationship between grocery chains and advertisers.

But now, grocers are offering a growing array of digital advertising and out-of-home opportunities, from in-store audio to in-app ads that can be targeted directly at consumers who frequently buy a competing brand.

However, there is no simple button for retail media, neither for advertisers nor for retailers themselves.

While large chains, for example, typically have the resources to invest in their own in-house technology, it can be difficult for ad buyers to reach their target audience through smaller chains with their nascent offerings.

Overall, however, the grocery media network space is becoming increasingly sophisticated.

The attractiveness and potential of RMN grocery stores

Grocery shoppers are loyal and consistent, often shopping twice a week. Their behavior is easy to understand and does not fluctuate significantly based on trends such as fashion. Grocer consumers visit a store or open a store chain’s app with the intention of making a purchase.

By working with grocery chains, “we have access to that first-party data,” said Andy Howard, senior director of trade media at Publicis-owned Mars United Commerce. “We can really determine who is buying and then who is actually buying.”

Retail media networks use this data, including location, purchasing behavior and demographics, to help advertisers reach consumers and attribute results.

RMNs put more information “in the hands of consumers so they can make educated decisions,” said Deborah Weinswig, CEO of Coresight Research, a research and advisory firm focused on retail and technology. “The consumer wins, the retailer wins and the brand wins because the brand then has more insight into what caused the conversion.”

By working with grocery store RMNs, Weinswig said, brands can also begin to answer the age-old question: “What does it take for a consumer to change their shopping habits?”

RMN grocery store goes through partnership

However, in this rapidly evolving space, brands and advertisers can have very different experiences depending on their retail technology partner.

A powerful grocery retail media network – think about it Kroger Precision MarketingHy-Vee RedMedia, Target’s Roundel or Albertsons Media Collective – includes various advertising opportunities in apps, on the web, out-of-home displays and in stores. These can be combined with more traditional methods, such as endcaps or retail displays.

While larger chains typically offer these options directly to advertisers, others grocery chains, often smaller or more regional, have partnered with suppliers to support their RMNs.

Save Mart, for example, a grocery chain with locations mostly in California, works with Quad and Swiftly for its RMN.

Swiftly, which primarily works with small and medium-sized chains—discount grocer Save A Lot is another example—is a retail media technology platform. And Quad, which also works mostly with small and regional chains (in addition to Save Mart, there’s Oklahoma-based Homeland Stores), is focused on in-store digital advertising assets.

In-store shopping remains an important part of grocery shopping, said Kevin Bridgewater, senior vice president of strategic retail solutions at Quad. “The [in-store] audiences are very important to get brands excited.”

Quad’s technology helps personalize ads at Save Marta stores in California based on factors like the weather, Bridgewater said. For example, Save Mart has locations in the Bay Area where it’s cold, foggy and 50 degrees in the summer, and also has stores 60 miles away in Modesto where it’s 110 at the same time of year.

“Being able to promote ready-to-eat soups in the Bay Area and something that’s a little refreshing in Modesto is key,” Bridgewater said. “The technology we have allows us to target the store and even the aisle if necessary.”

Joint work and focus on standardization

Meanwhile, grocery chains are pooling their resourcesincluding through initiatives like Ripple, which is a a retail data cooperative operated by Cardlytics-owned Bridg.

Giant Eagle, a regional chain with numerous locations in the Mid-Atlantic, joined Ripple last year.

Scale is something advertisers demand, said Joell Robinson, Giant Eagle’s senior director of retail media. And Robinson would know. She spent years in the paid media and digital advertising space, including as director of digital marketing at JPW Industries, which owns a portfolio of metalworking brands, before joining Giant Eagle in 2022.

“Planners and buyers are looking for an easier way to buy, and coming from that environment, I understand that — it’s already fragmented,” she said.

Robinson predicts that more chains will merge in the future and this consolidation will make it easier for advertisers to work with smaller chains.

Even grocery chains big enough to deserve a regular place on the media agenda want to work with other chains to standardize the space.

Kristi ArgylanWHO she recently left her job as senior vice president of retail media at Albertsons Media Collective to lead Uber’s advertising businessthey often hear from brands that the “complexity” of retail media is “too hard for them to navigate.”

“You can imagine how much CPG could potentially add to be able to run a unique campaign from each of us — it’s just not sustainable,” she said. “The purpose of standardization is really to eliminate a lot of that extra work.”

Albertsons is working with the IAB to establish standards for grocery store RMNs, and Argyilan plans to continue championing media standards for retail and commerce in his new role at Uber.

Trade RMNs are growing

Retail chains are also working to make it easier for advertisers to work with them by embracing programmatic, personalized and generative AI to help optimize campaigns.

Another area for growth in the space is non-endemic advertising. If a customer buys diapers, for example, chances are they’ll also be looking for baby products that the chain doesn’t carry, like baby clothes.

There are even options for grocery chains into connected TV. Argyilan believes that grocery media has an opportunity to “actually bring some order to that channel.”

While some hurdles clearly remain with grocery store RMNs, the cost-effectiveness is paying off for many advertisers, especially with new opportunities on the horizon.