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What is retail media?
It’s when retailers use their customers’ purchase data to target ads across the internet. If you buy peanut butter, your grocery store might start hitting you with peanut butter ads when you visit websites, social media platforms, and even while watching TV.
Wait, stores are selling my purchase data to advertisers?
Technically, they aren’t selling it — they’re selling the ad space. They are using the data themselves to make sure a brand’s ad gets in front of the people most likely to be interested in their products.
How did they even get that data?
You agree to let online retailers like Amazon collect that info when you use their services. For real-world purchases, a big source of that data is loyalty programs — members turn over info on what they buy every time their membership card gets scanned, which is used not just to personalize the discounts they get, but the ads they see the next time they are looking for a recipe.
Who is running these networks?
Chains in the U.S. — like Target, Kroeger, and Walmart — began following Amazon’s lead once they realized they also have a ton of customer data. Retail media is less developed in Canada, where Loblaw is far and away the leader, but Canadian Tire has been growing its Triangle Retail Media team, while Walmart Canada frequently imports best practices from its U.S. parent company.
Why are they doing this?
There’s big demand from advertisers. They are expected to spend $3.15 billion on retail media in Canada this year, since actual buying behaviour is a better sign of what ads might work on someone than guessing based on browsing history and third-party cookies (which are going away anyway). Also, adding high-margin digital advertising to a retailer’s slim margin business will keep investors happy.