Co-op’s Retail Media Journey
British retailer Co-op in January debuted Co-op Media Network, creating the first retailer media network in the convenience store sector in the U.K. We caught up with Dean Harris, head of Co-op Media Network for Co-op, to discuss the retailer’s journey up to this point, its unique position in the market and its focus for the future.
P2PI: Can you tell us a bit about Co-op and its typical shopper?
Harris: Co-op is a leader in the U.K. grocery convenience sector, with about 2,400 stores across the U.K., making it the most geographically widespread retailer with a store in every postal code area. A significant strength of Co-op is its proximity to customers, with 82% of the U.K. population living within two miles of a Co-op store.
The typical Co-op shopper demographic includes both older “empty nesters” and younger “pre-family” customers. Our shoppers prioritize ease and speed, with around 50% of shopping trips aimed at “topping up” essentials.
P2PI: How do people shop in the convenience channel in the U.K.?
Harris: U.K. convenience shopping is characterized by high trip frequency and a variety of shopping missions ranging from top-ups and distress purchases to “meals for tonight.” (Co-op is particularly strong in the “meals for tonight” category, being the No. 1 grocer in the U.K. for these missions).
Co-op stands out for its convenience, with most stores being visited for quick, impulsive decisions facilitated by their proximity to shoppers’ homes or workplaces. Quoting Andy Murray, shoppers have three budgets that must be catered for: money, time and frustration. In convenience, the demands on all these are exacerbated.
P2PI: When did Co-op launch its home delivery service? Was it a result of the pandemic or just fulfilling a shopper need for more convenience?
Harris: We launched our own rapid delivery grocery service before the pandemic in 2019 (www.shop.coop.co.uk), as it aligns with our convenience-focused grocery strategy.
Once we were happy with the shopper experience, we launched advertising opportunities with brands at the start of summer 2020 when the channel was witnessing rapid growth in user numbers because of COVID.
As well as our own online delivery proposition, we also utilize quick commerce partnerships where Co-op has "online stores" within Deliveroo, Just Eat, Uber Eats and Amazon. This allowed us to expand quickly. Co-op is now the most used grocer on delivery apps.
P2PI: You’ve been at Co-op for more than 10 years. What has Co-op’s retail media journey looked like?
Harris: Co-op’s retail media offer has evolved significantly. In 2016, we had a limited in-store only toolkit. Back then, media investment was perceived as a cost of doing business with a retailer, as opposed to a channel advertisers could grow their brands through. And retailers didn’t invest in innovating their media products or operational excellence.
Appointing Threefold (part of the SMG agency network) that year sparked a revolution in our products and services from 2017 onward. We expanded our toolkit, improved compliance and enhanced service levels with brands. As a result, shopper execution was better, which drove higher sales uplifts, creating stronger ROIs for brands. This led to a 2.5 times increase in Co-op’s retail media revenue between 2017 and 2023.
The years 2016-2020 was “intervene & fix,” 2020-2022 was “improve & innovate” and 2023 onward represents our “transform and revolutionize” into a retail media network with a strong brand, clear positioning and meaningful proposition. I’m in my ninth role at Co-op across 11 years, and I’ve never been so excited and grateful for the position I’m in now. We have a unique opportunity, an incredible network of partners, great brand clients and a fantastic team of 30 dedicated Co-op Media Network colleagues. The next few years is going to be an amazing adventure for us all. We’re enjoying every day of it.
P2PI: How long was Co-op Media Network in the works? Can you explain the role of the retailer’s long-term agency partner Threefold in the launch?
Harris: Co-op Media Network is powered by Threefold, and having recently renewed that partnership until 2028, we have had one of the longest strategic collaborations in the industry — surpassing over a decade together.
The decision to evolve from a de-branded sales house model toward a Co-op branded retail media network began early last year. Kenyatte Nelson joined the business as chief marketing and customer officer (CMCO), and he endorsed the prioritization of retail media as an opportunity to capitalize on three existing strategies:
- Growing our membership base
- Fully focusing our grocery business to convenience
- Extending Co-op’s income opportunities into new markets
This gave us license to review our strategy and look at our convenience grocery business through the lens of a media owner, as opposed to a grocery retailer. When we did that, we started crafting a revised strategy around our role as a convenience-focused retail media network. And executing plans to align our brand, marketing, operations, products, and people to that strategy — which is an ongoing, three-year roadmap.
P2PI: Did any shopper insights influence the network and its solutions?
Harris: The development of Co-op Media Network and our solutions has been significantly influenced by shopper insights, focusing on the value of convenience, and leveraging Co-op’s unique positioning in the market.
The strategy emphasizes tailoring advertising to meet the distinctive needs of the convenience shopper. Convenience store shopping is different than large grocery stores. Trips tend to be unplanned, spontaneous, impatient, quick, few items without a shopping list. Often the purchase is close to the consumption (buy now, use now/soon). Whereas larger grocery store trips are more planned, routine, longer, against a shopping list with many items (buy now, use later).
P2PI: What are some of Co-op Media Network’s solutions?
Harris: We provide various data and media solutions, including in-store advertising (print, radio and digital), onsite e-commerce advertising, offsite media using both third-party (e.g., geo-targeting) and first-party data (shopper data), as well as tailored in-app activations for specific member cohorts. We also provide robust planning and measurement capabilities, utilizing both our PlanApps (via Threefold) and Circana partnerships.
These innovations are designed to leverage Co-op’s strengths in convenience and customer proximity, and we have an innovation roadmap to continue our ability to make purchasing decisions easier for the convenience shopper.
P2PI: I understand you've just launched, but any insights so far, successful campaigns or feedback?
Harris: We’ve had an incredible response, from advertisers, media agencies, colleagues, industry peers, and with industry press.
I believe launching a B2B proposition comes with more risk than B2C. It’s harder to do upfront quantitative and qualitative research with your target audiences, to reassure yourself that your positioning and proposition is different, compelling, and meaningful. But everything we’ve seen and heard suggests we’ve ticked those three boxes. Another challenge with B2B vs B2C, is that the impact on your business isn’t immediate. Unlike a consumer product launch when you can quickly see sales and engagement impacts, within days.
So, it’s still early days to assess what the positive reception means for business growth. But initial signs have exceeded all our expectations. I think having a point of difference is important. I am an advocate of having a distinctive brand identity, unique market positioning and differentiated value proposition. We have all those. With convenience as our focus, we are giving brands an additional way to grow in retail media.
- Purpose: Elevate the value of convenience media in the advertising industry.
- Mission: Champion the scale of Co-op and unique advantages of convenience to grow brands.
- Brand Positioning: “Convenience-focused” retail media network.
- Value Proposition: “Unlock the power of convenience” to grow your brand, every day, everywhere.
P2PI: So much has changed and continues to change when it comes to retail media in the commerce marketing world. What has that looked like for you and how do you see retail media evolving in the U.K.? How do you see it evolving globally?
Harris: Due to data privacy regulations and geographical size, the U.S. and U.K. are at opposite ends of the journey. In the U.S., first-party data driven offsite media came after onsite e-commerce media, with in-store advertising to come next. In the U.K., we started with in-store advertising then onsite media became more of a focus with COVID, and only recently has the market invested in data-media collaborations to combine first-party data with offsite media.
Both markets are pursuing store digitization. And all digital media offerings (including the store) are moving away from tenancy and CPM models, toward programmatic buys, which allows more self-service and less managed service models. Once you get into automated buys in retail media, which rely on data to make decisions, you inevitably end up with AI opportunities to make those decisions as optimal as possible.
And of course, data-media collaborations will continue to be formed between agencies, publishers, retailers and the bigger brands — CTV being the recent focus. (I’m going to my first CTV dedicated retail media conference this year.)
P2PI: You mentioned AI. What impact do you think AI will have in the retail media and the broader commerce marketing industry?
Harris: Data drives decisions in advertising. Currently humans are sat in the middle, using data to make those decisions. Eventually AI will be sat in the middle. Not in every situation, but in a lot of them. Especially as the market shifts to be more programmatic and self-serve.
But I’m fairly confident that relationships between people (brands and retailers) will remain significant and navigating this media fast-changing landscape will require a lot of input from talented marketers for many years to come.
So, I see AI as a catalyst, removing the pain from processes, planning and executing tactical activity, allowing us, humans, to focus on the value-adding evolution of the industry within all our respective organizations.
P2PI: Some of the typical challenges we hear from brand marketers when it comes to retailer media networks is related to measurement, minimum spend requirements and lack of data/data sharing. What are some of the retail media challenges in the U.K. right now and how does Co-op approach them?
Harris: The challenges are similar, but the ones I’d call out from the U.K. market in particular are:
- Ease: Multiple RMNs, with various platforms, several teams and different processes makes it operationally difficult and complex to execute retail media at scale for brands. Brands want a more streamlined, consistent and efficient approach in planning, execution and measurement. RMNs need to work harder to make things easier for advertisers.
- Speed: Other non-retail media channels in advertising are quicker to activate against, for similar reasons to above. This is something media agencies mention a lot. RMNs need to invest in their people, processes and technology products to speed up the end-to-end experience for advertisers.
- Transparency: Measurement methodologies need greater clarity and to be communicated more openly. Similarly, investment ratios in offsite media between data and media need to be shared. RMNs need to close this trust gap and increase positive collaboration across the industry.
Co-op is a cooperative; doing the right things in the right way is in our DNA. Which is why we will be emphasizing our commitment to transparency, standardization and protecting the strong brand trust we have. This isn’t a light switch activity, it takes time and requires investment, but we are committing to delivering fair and transparent service for our clients.
P2PI: What advice do you have for brand marketers who want to work with Co-op Media Network?
Harris: Before focusing on Co-op Media Network specifically, my first piece of advice — especially for global brands, who have other convenience retail media networks to work with overseas — is to reset your assumptions about the value of convenience in retail media. Open your mind to the power of the channel, by evaluating convenience in terms of the media metrics that matter (reach, frequency, attention).
Advertising tends to put grocery into two buckets: online and offline. But it should be four, separating out convenience shopping (in-store baskets, and online mopeds). So, ask yourself, are you covering all four effectively and efficiently? Are you using each one in the same way or tailoring your approach to unlock the maximum benefit? The missions between these four boxes are very different, the experience is different, even the shoppers are different.
When that perception shifts (which we believe it will), things get exciting as it opens up discussions about different ways to collaborate, execute, and unlock those largely untapped, undervalued and underestimated media benefits.