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Jun 05, 2023

The Friday Checkout: As retail media moves into stores, grocers need to proceed with caution

There’s a vast opportunity for retailers to bring digital advertising inside

There's a vast opportunity for retailers to bring digital advertising inside grocery stores — but bombarding shoppers with offers as they walk the aisles could diminish the consumer experience.

The Friday Checkout is a weekly column providing more insight on the news, rounding up the announcements you may have missed and sharing what's to come.

It's no secret that retail media has become a burgeoning opportunity that grocers are eagerly maneuvering to take advantage of. By next year, banner ads, paid search, sponsored listings and other branded advertising with retailers are expected to bring in more than $55 billion, according to eMarketer.

E-commerce sites and apps have been the primary stomping grounds for retail media to date, and marketers see plenty of opportunities there for innovation. But there's also a vast, largely untapped opportunity to bring digital advertising inside grocery stores — and news over the past week or so has shown some of the ways that these physical sites are starting to plug in.

Kroger recently announced it's bringing smart screens from Cooler Screens, which can display advertisements and promotions and gather insights about shoppers, to 500 stores, while Walmart announced it's testing in-store radio ads and sampling that includes omnichannel features like QR codes.

Smart carts, which have struggled to provide a return on investment as a checkout solution, appear to be evolving into retail media hubs. Veeve CEO Shariq Siddiqui told Grocery Dive's Sam Silverstein that the tech company's latest version will push information and offers to shoppers depending on where they are in the store.

Grocers have also been adding TV screens to aisles, endcaps and service counters, where shoppers can watch branded content as they stroll by or wait for their order to get fulfilled.

As technology and consumer habits bring the worlds of online and offline shopping closer together, these in-store retail media services promise to seamlessly work with many of the other omnichannel updates retailers are making, like adding QR codes, ordering kiosks and self-checkout terminals.

In the digital-enabled grocery store, retail media integrations can push valuable product offers to consumers. A shopper strolling down the frozen food aisle could get a personalized offer on their app, in the cart or on a cooler door that spurs them to buy. A sampling station could interrupt another customer's mission-driven trip and introduce new items to their cart.

But like in the online world, retail media's in-store push also threatens to diminish the consumer experience if companies don't manage it right. Bombarding shoppers with branded offers while they stroll store aisles — effectively turning the experience into a series of pop-up ads in real life — could be a major turn-off. Poorly considered integrations could also ding retailers’ carefully cultivated brand images.

Cooler Screens’ technology is slick, but it's also putting a digital wall between shoppers and their bottles of soda and pints of ice cream. Consumers have complained that the screens are unnecessary, and that they could aggravate people if the products that appear on those displays aren't available for purchase. Walgreens, the pharmacy chain that helped launch Cooler Screens, had second thoughts, and now the two companies are locked in a contentious legal battle.

Are in-store retail media features benefiting the shopper or just the retailer? That's the key question companies have to consider as they size up this growing opportunity.

Canadian Asian grocery chain coming to Seattle area

Loblaw-owned T&T Supermarkets is celebrating 30 years of operating in Canada by opening a store in the U.S. and creating a regional office in the greater Los Angeles area. The upcoming flagship location will be located in Bellevue, Washington, and is expected to open next summer. T&T claims the 76,000-square-foot store will be the "largest Asian supermarket in the state." Once it opens, customers can expect to find more than 300 private label items, a sushi counter, hot food bar, noodle station, in-store kitchen and bakery.

Harris Teeter delivery rolls into Baltimore and Frederick, Maryland

The Kroger-owned chain has expanded its delivery service, allowing the grocer to reach new geographic locations it did not previously serve by stores, Bill Rhyne, senior director of operations support for Harris Teeter, said in a Thursday statement. The grocer said it will expand delivery through June into more ZIP codes.

Customers can select from more than 30,000 items including fresh produce, meats and seafood. Orders are delivered in temperature-controlled Harris Teeter Delivery vans by uniformed associates. The grocer said it uses unspecified technology to help drivers go the fastest route and minimize drive time.

Hy-Vee opening a new superstore

The grocer on Tuesday plans to hold a grand opening for the store in Gretna, Nebraska, which features the retailer's "reimagined grocery store concept."

At 135,000 square feet, the location will have "several newer departments and partnerships" and carry roughly 120,000 items including more than 6,300 specialty items and more than 8,000 HealthMarket products, the grocer said in an emailed press release. A 6,300-square-foot Aisles Online grocery delivery and pickup service and an adjacent 4,250-square-foot Hy-Vee Fast & Fresh accompany the store.

That is the percent United Natural Foods, Inc.'s (UNFI) net income and earnings per diluted share dropped compared with the same period in 2022, according to the company's Wednesday earnings report. The company has lowered its financial guidance for the rest of the fiscal year, expecting net income to fall between $11 million and $41 million compared to the range of between $90 million and $142 million it previously outlined in Q2.

Inflation figures due

The latest Consumer Price Index data from the U.S. Bureau of Labor Statistics is set to be announced Tuesday. The figures will indicate whether the slowdown in inflation that began last fall continued into May.

Retail sales data released

The U.S. Census Bureau is scheduled to release retail sales data for May on Thursday. The data will provide a look into how inflation and other factors affected sales for the grocery industry during the month.

Kroger earnings

The grocery company plans to announce its earnings for the first quarter on Thursday.