The new thing from 1958, Retail Media

I moderated a panel in February, at the SEA CONTAINERS a number of CPGs at an SMG and LiveRamp hosted the event. 

The event focussed on Inside Retail Media, and there were a few poignant points made throughout, none more apt than "who's buying lunch" by Colin Lewis, Founder, Retail Media Works and Marketing Week columnist, who delivered a fabulous KeyNote. 

Back to the title, I started the panel with a short snippet that followed the lines of Retail Media isn't anything new; we saw the birth of loyalty-based marketing from Retailers in the UK back in 1958 with the Green Shield Stamp following the collapse of stamps after a fierce stamp war between retailers Tesco dunnhubmy launched in 1995, literally almost (2) two decades ago, this was the actual birth of retail media as we know it. 

"Green Shield Stamps was a British sales promotion scheme that rewarded shoppers with stamps that could be used to buy gifts from a catalogue or from any affiliated retailer. The scheme was introduced in 1958 by Richard Tompkins, who had noticed the success of the long-established Sperry & Hutchinson Green Stamps in America." ref Wiki - Interesting to note its collapse was partly due to Tesco withdrawing support of using it with all stamps being withdrawn in 1991. Fun fact, Argos was born from The Green Shield Stamp following Tesco's withdrawal, and years later, Tesco's biggest rival, Sainsbury's, ended up acquiring Argos ... interesting read here The Argos story: from Green Shield Stamps via Tesco and now Sainsbury's?

So why all the hype? What has changed?

This is all about data and the accessibility and addressability of data. Data that is collected, analysed, and used for offers, promotions, shopping habits and a whole lot more both in-store (traditional shopper marketing) and now online. Perhaps more importantly, CPGs can now also collect, combine and collaborate more with retailers. 

The financial gain is also now quantifiable, and the convergence of a traditional offline discipline, one driven in-store and through vouchers/coupons through direct mail, has bled into a new ecosystem .. the WWW, ooo showing my age Worl Wide Web!

Retail media is forecast to hit 25% growth in 2023, according to GroupM analysis. The sector grew 28% to £2.7bn in the UK in 2022, and the WPP media-buying arm estimates it will grow to £6.5bn by 2027, making up 16% of total digital ad revenue in the UK. Article Link

But what does this mean? Well, in short, you have (2) two departments in a CPG, shopper trade marketing (who have been working with retailers for years) and online marketing, a new department at the table trying to discern and understand how to move through the funnel and leverage the wealth of data available. 

Trade marketing has spent years cultivating trade deals with retailers on in-store promotion, product placement, supply chain and stocking. However, online marketing is the department that has traditionally managed advertising at the top of the funnel, brand awareness, and driving interest - with seemingly no contact with the end consumer as the customer journey was fragmented and broken. 

In walks Retail Media, or should we say the advent of addressable marketing to direct consumers inside retailers offering CPGs the ability to target in-market customers and understand more about their ICP …. Imagine a world now where CPG selling products inside a retailer can match Online Advertising with In-store purchase, "Saw ad on Saturday on META and then bought product in-store on Wednesday" - closing that gap, and historically broken customer journey.

I tabled this point to J&J, Unilever, Hagen Dazs and Accolade Wines at the Inside Retail Media event, my question was focussed on:

 "Have you seen a convergence of both these departments"?

It was an un-resounding yes, but the path hasn't been defined, and the ways of working are still very much being defined, we really are at the birth of a new discipline both in terms of rules of engagement, band width and capability. 

But the course is set as, after all, both CPGs and Retailers are starting to realise that not only does a retailer drive demand for a CPG, but the CPG also drives footfall, demand and growth for a retailer; both are more successful when working together, this relationship has been very one-sided for a long time.

Back to Colin's comment on who's buying lunch, historically, it was the CPGs. Still, the tide is turning as intrinsic value is being shown in collaboration, more budgets are being unlocked, and new capabilities are unlocking new ways of working; trade marketing no longer sits at the on-site end of aisle promotion, OOO or in-store posters with offers, this is now online and tied to consumer data. 

More and more retailers are setting up ecosystems to capture and utilise opted-in data points through loyalty-based marketing (all starting with the Green Shield Stamp in 1958). 

We see in the UK a discipline closely spearheaded by Tesco Dunnhumby and Nectar, but new players to the party like Boots with BMG and Morrisons with MMG, not to mention Carrefour in 11 Markets across the globe.

Walmart Connect's success proves this discipline is not only set to grow but is here to stay. Walmart Connect exec dishes on retail media gains.

Rich Lehrfeld, Senior Vice president and General Manager at Walmart Connect, said during the virtual summit on March 3.

“In the second quarter of 2022, Walmart enhanced the search relevancy of Walmart Connect and switched to a second-price auction model.

These updates led to a 41% growth in Walmart Connect's business in Q4 and helped Walmart's global ad revenues reach $2.7 billion in 2022. They also helped Walmart Connect grow its US advertiser base by 136% YoY.”

I can't think of many more industries (UK) that are forecasted to grow 25% in 2023.

Exciting times!