The Digital Circular Gap: Smaller Grocers Struggle to Modernize Foundational Shopper Touchpoint
As grocery moves deeper into digital commerce, retail media and first-party data activation, one legacy element of the shopper journey is still undergoing its transformation: the weekly circular.
While larger chains have spent years modernizing the format through integrated personalization, richer media, off-site distribution and performance measurement, many regional and independent grocers remain reliant upon circulars stuck in an earlier era, according to Adam Zimmerman, co-founder of Ideal by Design House, which partners with CPGs and retailers to build digital ecosystems.
It's a format that carries sway: 20% of shoppers in P2PI's Evolution of In-Store Experience Study said a product being advertised in a store flyer or weekly ad influenced a spontaneous purchase, which means a gap in capabilities can impact brands and retailers alike.
Print Pressures Mount
The shift away from the weekly print circular has been driven by both consumer behavior and economics. Print costs have climbed sharply, distribution coverage has shrunk, and many shared-mail programs now feature “dark weeks,” where certain ZIP codes simply go unserved, Zimmerman said to the Path to Purchase Institute at Groceryshop last month.
At the same time, household mailboxes have lost their central role in consumer communication as younger shoppers pay bills online.
Perhaps interestingly, the company has found that most early users of a new digital circular ecosystem are older than 65.
"We would assume that it would be the younger demographic that would jump in in the beginning. But 65-plus know what a weekly ad is [and] that the grocery stores have them," he said. "If you're 30 years old, you don't know. You've never taken the time to take it out of your mailbox and read it."
Over the first 12-18 months of launching a new digital circular, the company typically sees the average user age move from 65 to about 40. "We're literally teaching the younger audience what a weekly ad is through the distribution system," he said.
Where the Real Bottlenecks Begin
Much of today's friction isn’t about data collection but rather data activation, which is where smaller grocers hit a wall. Although digital circulars can function as hubs for promotions, content and retail media placements, they often lack the infrastructure or internal systems to activate these capabilities on their own, said Zimmerman.
For example, advanced digital circulars can leverage loyalty data to enable predictive modeling or personalization at the category or item level. They can also have off-site distribution designed to reach both loyal and new shoppers.
But even when independent grocers and regional chains can collect such data, it often sits untouched and disconnected in legacy back-end systems.
"Almost all retailers that we've ever talked to have the right data in a database, but they're not doing anything actionable with it," he noted.
Without the right external support, most independents or smaller chains can’t unlock the personalization, measurement or monetization that larger retailers are quickly mastering.
Retail Media Is Expanding Into the Circular
As retail media strategies mature, Ideal sees the weekly circular emerging as a potential monetizable surface. Larger retailers already treat it as a channel for sponsored content, paid placements and enhanced promotional storytelling, and this represents meaningful incremental revenue for smaller grocers.
Many independents have also historically been excluded from national brand media budgets. Without the digital infrastructure, they can't participate in the types of programs that drive media funding to major chains. The modernization of the circular may serve as a key on-ramp.
See also: Why the data language gap is undermining retail media growth
"We work with a lot of smaller regional retailers or independent retailers that have never gotten retail media and are never going to, but we aggregate them into a large group and we have a national presence, so we really do tap into national brand dollars," said Zimmerman.
"We can take national brand dollars and allow it to flow down to [retailers] that wouldn't have otherwise gotten it by collecting them in this aggregated group. … It truly is pulling from a totally different bucket of spending using the weekly ad ecosystem to fulfill it or to be the conduit to the customer, but it's true incremental investment."
