The Friday Checkout: As retail media moves into stores, grocers need to proceed with caution

The Friday Checkout: As retail media moves into stores, grocers need to proceed with caution

There exists a tremendous opportunity for retailers to integrate digital advertising within grocery stores. However, inundating shoppers with offers as they navigate the aisles has the potential to diminish the overall consumer experience.

In a recent column, “The Friday Checkout,” deeper insights are provided on this topic, highlighting noteworthy announcements and upcoming developments. It is no secret that retail media has emerged as a lucrative opportunity, with grocers eagerly seeking to capitalize on its potential. According to eMarketer, by next year, banner ads, paid search, sponsored listings, and other branded advertising with retailers are projected to generate over $55 billion in revenue.

Thus far, e-commerce sites and apps have been the primary focus for retail media initiatives, with marketers recognizing the ample room for innovation in this realm. However, there is also a vast and largely untapped potential to introduce digital advertising within physical grocery stores. Recent news has shed light on the various ways in which these brick-and-mortar locations are beginning to integrate such technologies.

Kroger, for instance, recently announced its partnership with Cooler Screens, a company that provides smart screens capable of displaying advertisements, promotions, and gathering shopper insights. The plan is to introduce these screens to 500 Kroger stores. Similarly, Walmart is testing in-store radio ads and sampling that incorporate omnichannel features like QR codes.

The evolution of smart carts, which have previously struggled to justify their investment as checkout solutions, is worth noting. Veeve CEO Shariq Siddiqui explained that the latest version of smart carts will deliver targeted information and offers to shoppers based on their location within the store.

Grocers have also started incorporating TV screens in various areas such as aisles, endcaps, and service counters. Shoppers can enjoy branded content as they casually stroll or wait for their orders to be fulfilled. As technology advances and consumer habits blur the lines between online and offline shopping, these in-store retail media services promise to seamlessly integrate with the omnichannel updates that retailers are implementing, including QR codes, ordering kiosks, and self-checkout terminals.

Within the digital-enabled grocery store, retail media integrations offer the opportunity to deliver valuable product offers to consumers. For example, as a shopper peruses the frozen food aisle, they could receive a personalized offer on their app, within their cart, or displayed on a cooler door, enticing them to make a purchase. Similarly, a sampling station could intercept a customer during their shopping journey and introduce them to new items.

However, as is the case in the online world, the in-store push of retail media also presents the risk of diminishing the consumer experience if not executed thoughtfully. Bombarding shoppers with branded offers as they navigate the store aisles, effectively turning the shopping experience into a series of intrusive real-life pop-up ads, could lead to a negative response. Careless integration of retail media may also tarnish retailers’ carefully cultivated brand images.

While Cooler Screens’ technology is undeniably impressive, it introduces a digital barrier between shoppers and the products they desire, such as bottles of soda or pints of ice cream. Some consumers have expressed dissatisfaction, deeming the screens unnecessary and potentially aggravating if the showcased products are not available for purchase. Walgreens, the pharmacy chain involved in the launch of Cooler Screens, had second thoughts and is now embroiled in a contentious legal battle with the technology provider.

As companies evaluate this burgeoning opportunity, a crucial question arises: are in-store retail media features truly beneficial to the shoppers or primarily advantageous to the retailers?

In case you missed it, one significant development in the grocery industry is the upcoming arrival of T&T Supermarkets, a Canadian Asian grocery chain, in the Seattle area. As part of their 30th anniversary celebrations, T&T Supermarkets is expanding its operations to the United States, establishing a flagship location in Bellevue, Washington. The store, expected to open next summer, will cover an impressive 76,000 square feet, making it the largest Asian supermarket in the state. Shoppers can anticipate over 300 private label items, a sushi counter, a hot food bar, a noodle station, an in-store kitchen, and a bakery.

Harris Teeter, a Kroger-owned chain, has expanded its delivery service to reach new geographic locations previously unserved by their physical stores. The grocer now offers delivery in Baltimore and Frederick, Maryland, enabling customers to choose from a wide selection of over 30,000 items, including fresh produce, meats, and seafood. Uniformed associates deliver orders in temperature-controlled Harris Teeter Delivery vans, utilizing technology to optimize route planning and minimize drive time.

Meanwhile, Hy-Vee is set to open a new superstore in Gretna, Nebraska. Boasting a reimagined grocery store concept, this expansive location spans 135,000 square feet and features several new departments and partnerships. With a comprehensive offering of approximately 120,000 items, including over 6,300 specialty products and more than 8,000 HealthMarket items, the store aims to provide a diverse and fulfilling shopping experience. Accompanying the superstore is a 6,300-square-foot Aisles Online grocery delivery and pickup service, as well as a neighboring 4,250-square-foot Hy-Vee Fast & Fresh establishment.

In the world of finance, United Natural Foods, Inc. (UNFI) reported a significant decline in net income and earnings per diluted share compared to the same period in 2022. According to the company’s earnings report released on Wednesday, their net income for the rest of the fiscal year is projected to fall between $11 million and $41 million, a notable decrease from the previous forecast range of $90 million to $142 million.

Looking ahead, market watchers can anticipate the release of the latest Consumer Price Index data from the U.S. Bureau of Labor Statistics, which will shed light on whether the slowdown in inflation observed since last fall continued into May. Additionally, the U.S. Census Bureau is scheduled to publish retail sales data for May, offering valuable insights into the impact of inflation and other factors on sales within the grocery industry. Lastly, Kroger is set to announce its earnings for the first quarter, providing further insights into the company’s financial performance.

As the landscape of retail media evolves, it is crucial for companies to strike a balance between benefiting both the shoppers and the retailers. By leveraging the potential of in-store digital advertising while maintaining a focus on enhancing the consumer experience, grocers can seize the opportunities presented by this growing trend.

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