蘑菇AV

It may be a new year, but 2023 shopping habits aren鈥檛 going anywhere, according to Barbara Connors, vice president of strategy and acceleration at 84.51, a retail data company under The Kroger Co. Customers are still motivated by price and value, still expecting the shopping experience to seamlessly shift between online and offline channels, and still interested in buying private label goods.

Cara Pratt, SVP of Kroger Precision Media, is right when she says that 鈥渞etail media is media.鈥� While the fast-rising ad format may draw its unique power from retail鈥攕pecifically the first-party consumer purchase data used for high-octane targeting and closed-loop measurement鈥攊t鈥檚 not a physical product sold on store shelves and shouldn鈥檛 be treated as such.

Google put ads in its Search Generative Experience. YouTube has a new unskippable 30-second ad spot. HBO Max relaunched as Max. And The Kroger Co. is paving the way with in-store retail media. Here are what updates from these companies and more mean for advertisers.

Retailers that aimed to be media giants are hitting headwinds as ad growth slows. To stay competitive, retail media networks must rethink org structure, sharpen media skills, and plan smartly to thrive in a more challenging landscape.

Amazon and Walmart dominate the landscape, but the other half of US ecommerce sales is still up for grabs.

The long-delayed merger between Kroger and Albertsons finally ended in December after multiple judges鈥攐ne state, one federal鈥攂locked it. Meanwhile, advertising holding companies Omnicom and Interpublic Group announced in December that they would merge, in effect creating the world's largest ad agency.

Retail media鈥檚 rapid growth has spurred nonretail verticals to harness their first-party data to fuel their own commerce media networks. Retail media spending still dominates the commerce media landscape, but distinct challenger cohorts are finding their footing.

Walmart, Costco, and Kroger ecommerce sales will grow faster than average, since most food, beverage, and household essentials are sourced domestically. Consumers will continue to prioritize spending on these categories even as they cut back in other areas.

The brand is among the top three cosmetics brands sold at Kroger and recently expanded into 1,200 Target stores. Target also scored a success with its private label perfume line, Fine鈥檙y, which offers scents resembling fragrances from Tom Ford and Baccarat at a fraction of the price. Our take: Addressing the dupe problem is a never-ending, often frustrating process.

Growth rates will decline, but digital grocery will remain a key focus for retailers looking to drive incremental sales dollars in ecommerce.

The company has previously partnered with Walmart Connect and Kroger Precision Marketing on streaming solutions. This was originally featured in the Retail Media Weekly newsletter. For more marketing insights, statistics, and trends, subscribe here.

The lack of concern could be because most of these players鈥攊ncluding Walmart, Costco Wholesale, The Kroger Co., and Albertsons Companies鈥攁lso operate pharmacies. So any spending decline for groceries could be offset by more customers picking up GLP-1 prescriptions. Meanwhile, a slew of food sellers and CPG brands are developing product lines and reformulating items with GLP-1 users in mind.

Retail giants are stepping up as well: Amazon has contributed $10 million while deploying emergency supplies, Walmart and Kroger have pledged $2.5 million and $1 million, respectively, and Tyson Foods has dispatched its disaster relief team with meals and water.

Kroger: Retail media hasn鈥檛 peaked, personalization can be profitable, and more insights from the retailer鈥檚 2023 fiscal year. Why it mattered: As the number of retail media networks has risen, there鈥檚 concern that retail media ad spend could slow. But Kroger didn鈥檛 seem worried in its FY 2023 earnings call.

Nonalcoholic beer, wine, and spirits sales grew 28% between June 2023 and May 2024, per 84.51掳, a retail data company under The Kroger Co. Younger consumers play a significant role in that growth, as only 62% of US adults under 35 drink, down from 72% two decades ago, per Gallup Poll.

While Trump鈥檚 presidency will undoubtedly be friendlier to large mergers like the Kroger-Albertsons deal, that doesn鈥檛 mean retailers should expect a cakewalk given some of his more aggressive stances on antitrust during his first term and Vance鈥檚 potential influence on policy.

In 2024, Kroger also expanded its premium pet food offering, launching six new products. Department stores are looking to private label brands to help revive their fortunes. In March, Macy鈥檚 and Kohl鈥檚 each announced new brands for home goods in kitchenware, bedding, and housewares鈥攑art of their broader merchandising strategies to update their owned brands.

Leaning into value: Beyond private labels, Kroger has tried to beat back Walmart and others by leaning into value via loyalty discounts, personalized offers, and fuel rewards. The number of digital offer clips is up 5% this year, which has reportedly saved customers an additional 14%.