Sweeping changes in supermarket-sales tactics

For savvy brands, retail media is shaping up to be something of a trolley dash, says Lee Roberts and Eoin Maguire, who head up Tesco’s retail media offering in the UK and Ireland respectively.

Now is the time for brands to make the most of what’s on offer, they tell dentsu’s Dave Winterlich.

Retail media isn’t new but the opportunity it can offer brands is growing apace. Though increasingly data-driven, at heart it refers to any advertising in a retail environment, from point-of-sale material to digital screens in-store.

It uses first-party consumer data gathered through online shopping and loyalty cards to provide forensically targeted campaigns for fast-moving consumer goods.

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Increasingly it interacts with consumers on an individual basis through connected TV ads, shown on devices such as mobile phones, smart TVs or gaming consoles, allowing brands to reach streaming audiences.

Though the concept has existed in store for decades, in the last 18 months advertisers have really started to grasp the benefits of customer-first media, says Roberts, who is head of sales for Tesco Media and Insight Platform in the UK.

Its ability to help them better understand an audience and then measure campaign activations “is incredibly powerful”, he says.

Golden age of retail media

“At a macro level, economic conditions are ensuring that brands are laser-focused on advertising accountability, to ensure they are achieving maximum return on investment,” says Roberts.

“In tandem with that you’ve got more practical issues, such as third-party cookie depreciation, which is impacting digital advertising’s access to data and leading to a shift in the digital ecosystem. Retail media sits at the top of privacy-compliant first-party data, offering closed loop solutions and accountability.”

It allows brands to build closer relationships with consumers as well as enabling them to use many channels at once.

“Sitting at the heart of that is the customer and how you speak to the customer. We’ve seen a huge proliferation of ad formats over the past 12 months, be that on-site, through connected store, or through off-site partnerships working with TV broadcasters or platforms like Meta and Pinterest, and all of that has really evolved the role that retail media can play,” he says.

While most of the focus to date has been on-site – stores’ own ecommerce websites – digital innovations have been taking place in-store too.

Tesco Ireland began introducing screens in its off-licence sections in 2018. “It was the first step into the space and has been a huge success,” says Maguire.

As head of sales for Tesco Media and Insight Platform in Ireland, he has seen appetite from out-of-home specialists grow significantly, helped by the fact that Tesco Ireland has roughly a 24 per cent grocery market share here, with 1.6 million active Clubcard users, in a total of 1.8 million households, giving it enormous penetration.

“With millions of transactions going through the store, you’re building a picture of scale to reach a huge audience with some very exciting creative opportunities in-store, whether that be digital screens in the off-licence section or convenience screens in Tesco Express and used in a way that is paired with data,” says Maguire.

It’s about where are shoppers more likely to be, he explains. “When do I want to reach them? How do I change my messaging before the weekend, say, or to capture some kind of occasion purchase?”

Building out the infrastructure

Increasingly agencies and out-of-home specialists are working together to elevate the experience of shoppers in-store. It’s less about simply linking to a trade plan or driving a promotion, and more about bringing creative brand expression into the store in a way that connects both above-the-line and below-the-line experiences together, he adds.

In the UK, Tesco Media and Insight Platform is working with a variety of connected TV partners, including Sky, Channel 4 and ITV, as well as sites such as Pinterest and Meta, and self-serve site The Trade Desk, which enables advertisers to use best available data to reach audiences on the open internet at every stage of the funnel, from awareness to engagement and conversion.

“What we are doing through those off-site partnerships is operating as a piece of infrastructure that is driven by our first-party data,” says Roberts.

“The opportunity for retail media is to bring a layer of infrastructure to what are the very disparate set of walled gardens that currently exist in the market. This is better than a walled garden. It is about sitting on top of all this first-party data, which ultimately comes back to actual sales data, which no other walled garden has a right to at this level of depth.”

Retail media provides brands with an opportunity to overlay all kinds of customer behaviour data gathered both in store and on-site, the kind that leads to sales. “That ability to measure in an omnichannel kind of way is incredibly powerful. What we are bringing to the table is the opportunity to deliver a level of infrastructure that advertisers haven’t had before,” says Roberts.

While Ireland has yet to capture all the opportunities currently being rolled out in retail media in the UK, it is on the way, says Maguire.

Last year Tesco Ireland became the first Irish retailer to offer consumer packaged goods brands auction-based campaigns to target high-intent audiences with ad slots, based on parameters such as budget, keyword and categories

Innovations apace

Last year Tesco Ireland became the first Irish retailer to offer consumer packaged goods brands auction-based campaigns to target high-intent audiences with ad slots, based on parameters such as budget, keyword and categories.

Relevant sponsored search, as it is called, allows brands to improve visibility by showcasing their products at the top of the tesco.ie online grocery shopping search results, on a self-service basis.

“That is really taking off for us now and we are seeing good competition being built across different brands and agencies within different categories,” says Maguire.

Agencies are increasingly looking to extend this to other display formats both on-site and in-store. They also want to use Tesco CRM to connect with customers in other relevant ways such as, for example, email marketing.

“We can line ourselves up with Tesco’s own CRM plan to see what opportunities there are for brands to layer in their own creative opportunities and ways to connect with customers in a really relevant way,” he says.

It’s about providing personalised offers to each customer with a degree of relevancy they don’t see elsewhere, he adds. Retail media can also use predictive modelling to identify the shoppers most likely to buy your brand if offered the right promotion, based on previous behaviours, with repeated follow-up activity to help such purchases become habitual.

“For brands, there are now lots of different ways to access data to target customers. Advertisers can identify customers who have never bought particular products, for example, or who are promo-buyers that don’t buy into the category, or heavy buyers, or those who have churned from their product,” and respond accordingly, he says.

Increasingly it will bring real-time flexibility to planning and buying as well as the ability to work with audiences more smartly, capturing measurement and results in a self-serve ecosystem, and in a way that enhances customer experience.

“The customer is sacred in all of this and we need to make sure that continues through all the advancements we bring to the media capabilities we have, whether on-site or in store,” says Roberts.

“It’s about offering real precision in the way we target and deliver to the customer, at all of the different touch points along the way, from sofa to store.”

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