As more retailers enter the space and as forecasts for its size grow, one retail operator has its own big target for making money from retail media.

Stop & Shop owner Ahold Delhaize is a global grocery supermarket chain, with a goal of making a billion euros from non-grocery revenue like advertising and data by 2025.

In this video interview with Beet.TV, Bobby Watts, SVP, Executive Lead, AD Retail Media, Peapod Digital Labs – Ahold Delaize’s retail media arm – explains the strategy.

The Omni-Channel Imperative

“It’s been a journey,” Watts admits when discussing the development of their retail media practice.

The quest for the right talent to navigate an omni-channel retail landscape has been paramount. “It’s important to have folks that understand a multi-channel environment,” Watts says, highlighting the need for a diverse skill set that transcends traditional domain expertise.

Watts sees the current tech fragmentation as more of an opportunity than a challenge. “The evolution of retail media started with sponsored search, but looking to the future, it’s about having that omni-channel environment,” he explains. The goal is to ensure that “our customers can receive a consistent message across the full funnel path to purchase.”

Selecting the right technology partner is critical to achieving this vision, Watts says. “We chose Epsilon Retail Media because they brought a unified platform for onsite sponsored search and offsite.”

Big Retail Target

Peapod Digital Labs is a subsidiary of Ahold Delhaize USA, operating as an ecommerce engine and digital innovation unit. The company’s focus revolves around transforming the digital and ecommerce capabilities of Ahold Delhaize’s east-coast local brands – Food Lion, Giant Food, The GIANT Company, Hannaford and Stop & Shop – enhancing the customer experience through technology.

They provide digital solutions, online grocery shopping services, and drive marketing strategies. Peapod Digital Labs also delivers media partnership opportunities, where brands can advertise and promote products within their digital grocery space.

Globally, Ahold Delhaize made half a billion euros from ad revenue in its last financial year, which the company said was helping it keep prices down. But that is just half the company’s target for revenue from non-grocery lines.

The Future of Retail Media

Watts emphasizes that a successful retail media network hinges on delivering more than just ads—it’s about creating “meaningful connections” that lead to consumer engagement. “You can’t do it without a great customer experience,” he asserts.

By working closely with data scientists and engineering teams, Watts and his team are probing how new ad units interact with overall customer experience and how they can enhance personalization and targeting capabilities.

Watts predicts a not-so-distant future where the retail media landscape experiences contraction, driven by advertisers, agencies, and CPGs desiring fewer, more impactful partnerships. “I think there’ll be some consolidation or aggregation,” he suggests, foreseeing a shift from retail media being perceived as a tax towards more strategic joint business planning.

You’re watching “Retail Media: Let’s Talk Shop,” a Beet.TV Leadership Series at Shoptalk 2024, presented by Epsilon. For more videos from this series, please visit this page.