Beyond Groceries: How Supermarkets Are Changing the Advertising Game
Supermarkets have long used customer loyalty schemes to gather data about shopping habits. But as retail media expands its horizons, supermarkets need to tread carefully when using customer data for advertising purposes. It’s a tricky balance between profiting from media campaigns and maintaining crucial relationships with suppliers. And with the rise of non-endemic advertising, where supermarkets advertise products not sold by them, such as cars or credit cards, investors are left wondering how much media profit is being reinvested to compete on food.
In this article, we’ll explore why supermarkets need to be cautious with customer data and how non-endemic advertising is changing the retail landscape. We’ll also discuss the delicate balance between traditional trade budgets and newfangled retail media campaigns, and how this affects supermarkets’ relationship with suppliers.
Supermarkets are in the business of selling groceries, not advertising. Yet, in recent years, they have expanded their offerings to include media campaigns that capitalize on their customer data. With loyalty schemes, supermarkets can track the buying habits of their customers, and use this information to offer targeted advertising to brands. This advertising can be in-store, on the supermarket’s website, or on third-party websites.
But the next frontier in retail media is non-endemic advertising. Non-endemic advertising allows supermarkets to use their rich customer data sets to advertise products not sold by them, such as cars or credit cards. The idea is that supermarkets have a better understanding of their customers than anyone else, and can use this knowledge to offer personalized advertising to other brands.
However, non-endemic advertising is not without its risks. For one, it blurs the line between traditional trade budgets and retail media campaigns. Traditional trade budgets are used for product promotions, while retail media campaigns are used for wider advertising and marketing purposes. If supermarkets start to focus more on retail media campaigns, it could affect their relationships with suppliers.
Moreover, supermarkets need to be careful about how they use customer data. They need to ensure that they have the proper permissions from customers before using their data for advertising purposes. As more and more data breaches make headlines, customers are becoming increasingly aware of the value of their personal information. Supermarkets need to make it clear that they value their customers’ privacy and won’t misuse their data.
Another issue with non-endemic advertising is the potential effect on profits. Retail media campaigns can be expensive, and supermarkets need to ensure that they are getting a good return on investment. If the profits from media campaigns aren’t reinvested into competing on food, investors might start to question the strategy.
Supermarkets have a wealth of customer data at their fingertips, but they need to use it responsibly. Non-endemic advertising presents exciting opportunities for supermarkets to expand their media offerings, but they need to ensure that they are not sacrificing their relationships with suppliers or their customers’ privacy. It’s a delicate balance between profiting from media campaigns and remaining true to their core business of selling groceries. As the retail landscape continues to evolve, it will be interesting to see how supermarkets navigate this tricky terrain.