NRF Recap: Retailers Bolster Retail Media In-Store Solutions
There was no doubt — or surprise — that artificial intelligence (AI) would be the star at NRF’s annual Big Show, where technology giants and startup innovators alike jostled to convince retailers why their solutions were leveraging the buzz phrase of the past 12 months.
Yet the Big Show, which was held Jan. 13-16 in New York, also devoted a significant slate of its roster to retailer media networks, with retailers such as Walmart, 7-Eleven, Walgreens and Kroger explaining how they plan to monetize their assets, especially their stores.
In this special report, we round up some of the key sessions.
Reinventing Retail for the AI Generation
“Why was 2023 the year of hype?” wondered Anshu Bhardwaj, senior vice president and chief operating officer, Walmart Global Technology and Commerce Technologies, about the huge retail interest in AI. Her view was that the technology emerging in the hands of customers and the speed of computing had captured the wider imagination.
“Meanwhile, AI is allowing us to become an adaptive retailer, meaning I can intercept you at a point to get you what you want. It’s about taking the next step,” she said. “We have to start with the customer first. Think about someone coming to your site searching for, say, unicorn-themed merchandise. It’s very cognitive, but can I shave some time off? It is also enabling the customer to find other things, helping their customer experience.”
She insisted that Walmart was looking at the technology as a way of keeping store workers “on the frontline” and added that “the more we can make their life less stressful, the better.” That included the Ask Sam employee assistance voice technology, which helps staff do things such as locate items, access store maps, look up prices and view sales information. Walmart has been experimenting, investing and scaling this, with the AI solution having all the retailer’s back-end information — including accurate inventory — but with added layers of nuance in its interpretations, including better understanding substitutions.
“At CES [which was held Jan. 9-12 in Las Vegas], we announced generative shopping services, such as users being about to type in ‘Plan Super Bowl party’ and lots of ideas on what they may need coming up,” Bhardwaj said. “My advice to retailers is to experiment, start with the needs of the customer, figure out the right partners and remain robust about privacy.”
Brainfreeze! How 7-Eleven is Redefining Retail Media with ICE
“Know your what [the problem], be customer obsessed and participate in agile collaborations,” Marissa Jarratt, EVP, chief marketing and sustainability officer, 7-Eleven, told NRF delegates during a session on the convenience retailer’s “immediate consumption ecosystem.”
Jarratt said that the company had set out to create Gulp Media, which debuted in October 2022, from its insights from the proprietary “Brain Freeze Collective” of 250,000 loyalty members, enabling it to carry out quantitative and qualitative research at scale. The retailer tests initiatives at so-called lab stores, real operational stores testing real products with customers.
“Gulp Media is the activation part, to leverage 7-Eleven’s 90 million loyalty members, providing advertisers with opportunities to reach consumers all along the funnel and link that through to sales via our analytics platform,” Jarratt added. “Our most loyal shoppers visit more than once a day — that's a high degree of engagement and commitment to the brand.”
The c-store retail giant has collaborated with multiple brands, from emerging brands such as C4 Energy to established ones like Dr Pepper, and has leveraged relationships with a variety of artists and creators, including streetwear and accessories designer King Ice for a Slurpee jewelry collaboration last summer.
“We start with the analytics to understand the dynamics and to tease opportunities to accelerate or improve growth, which are tested with the Brain Freeze Collective before implementation,” she said. “While smaller companies are more agile, as we moved up the curve to larger and more complex decision-making organizations, we're potentially talking to a wide range of people and agency partners. So, we’ve learned to identify how we approach and meet the needs of different types of advertisers.”
The retailer is also planning for a full roll-out of in-store radio, up from its current 2,000-strong portfolio.
“Gulp Radio will become the biggest radio station in the U.S.," Jarratt said. "Bringing this into the stores will unleash a new level of growth for us and our partners. There are two key factors: Firstly the trip mission is quite different from a large shop, with a different mindset. Secondly, the format of our stores, with an intimate size environment means you can hear the music and advertising while you are looking at the products."
North American Grocery Retail Trends for 2024
Leaning into retail media early with the launch of Kroger Precision Marketing in 2017, Kroger has had time to mature and evolve its network, according to Kroger SVP and CIO Yael Cosset.
“[The retail media network] evolution is coming from the realization that it's a very important model for a retailer,” Cosset said. “The opportunity is there to take advantage of some of the assets, which are relevant for the consumer, good for the brands, and generate better returns on engagement,” he said. “We create better quality experiences for the customer and a better advertising platform, monetizing the data.”
For Cosset, the emphasis is on “making the platform available with precision,” hence its name, though he cautioned that development was “not for the faint of heart.”
He pointed to the complexity, with trillions of data interactions across multiple channels, and he described the requirement for sophistication for customers in order for them to feel confident as “critical.”
He said that customer experience was the area that Kroger had made the biggest investment in so far, with a focus on making sure that users experience no compromise for online orders, in freshness for example, without compromising on price.
“E-commerce will grow dramatically, double digits. M-commerce adoption and penetration has been higher than predicted, but these are only possible when you have all the touchpoints,” he said. “By leveraging the data across everything, we can double down on driving digital transformation.”
The Golden Age of Retail Media Networks
Ryan Mayward, SVP retail media sales, Walmart Connect, stressed that the last 18 months at the retail giant had seen the company focus on display ads moving onto the Walmart platform, but the next six months would see acceleration of the programmatic business.
“Our approach has allowed us to build in-store ads and new touchpoints, on the web, social, etc. It starts with what is most convenient for the shopper, which is the app, which has become a marketplace, with third-party sellers,” he said. “It’s highly profitable and we're plowing that back into the retail business. With media partnerships [and] working with broadcasters/social media, we see a lot of headroom to partner for years to come.”
On attribution, he said that suppliers want to know iterations between online and in-store and said that Walmart can build a “high fidelity model” to show how all touchpoints can show incremental sales uplifts.
“But we want a lighter touch system, which we’ll be introducing. This will be a big year for investment in accurate measurement,” he stressed. “We are seeing money flowing into in-store advertising. Video and audio via in-store radio, also deli and bakery screens. Ads on self-checkouts. Touchpoints throughout the store, trying to shape marketers’ ad experience for the customer, how each touchpoint drives performance.”
Jonathan Lustig, head of revenue for Walgreens, added that with around 9,000 stores, the footprint of its physical assets has become incredibly valuable.
“We took a unique route with offsite via loyalty programs with 100 million users, built on the web and then leveraged through in-store assets to leverage both physical and digital,” he said. “Data has allowed us to build depth and breadth, additive to the consumer experience. There is no one way to interact with the customer.”
Lustig said that Walgreens views its retailer media network as another channel to engage and that the retailer had tested myriad of in-store models, looking at ways to include media networks as a core part of the store.
Making the Shift to Consumer Obsession
With BJ’s Wholesale Club celebrating its 40th anniversary, the company is currently opening around 10 stores annually, and moving into the Midwest. While chairman and CEO Bob Eddy said that the past few years had been challenging, especially for consumers, for 2024 his key point was that “value always wins.”
“The personalization of offers has become very important, also as a way of interacting with club members,” he said, in a session where he was joined by Anton Vincent, president, Mars Wrigley, North America & Global Ice Cream.
BJ’s spends considerable time look at its consumer data, Eddy said, and BJ’s and Mars have had a “tremendous partnership” in working out how to engage consumers in the way that they want to be engaged. That has included, for example, a dedicated Halloween microsite.
“It isn’t just handing anyone a coupon any longer,” Eddy said. “It really is understanding how to interact one-on-one with members. That’s been an incredibly powerful movement over the past few years.”
The goal, Vincent added, is to avoid a disjointed experience and become better at identifying complementary partners and working together within an omnichannel framework.
BJ’s and Mars have collaborated on retail media, “to understand what particular members want and interact with them on a one-to-one basis,” Eddy said.
