Supermarkets need to collaborate with suppliers more on the rollout of their digital in-store media networks and realise that fmcg companies hold the power in a shifting dynamic in their relationship, a new study has found.
The findings from advertising body ISBA’s Retail Media Study, the first such qualitative study of the emerging networks, calls for retailers and fmcg companies to work towards establishing shared standards of governance and invest more money in specialists to run the networks.
The study, funded by major advertisers including the likes of Arla, Heineken and Nestlé, covered retail media offerings of retailers including those of Tesco, Sainsbury’s, Ocado and John Lewis.
It quoted IAB Europe forecasts that UK digital would be worth £5bn by the end of this year, but said that with rising spend would come increased scrutiny,
To achieve the growth potential, it urged retailers to break down the silos between commercial and marketing teams to maximise the opportunities in digital retail media.
It also found there needed to be more data available to advertisers so they could truly understand the reasons for investing in digital retail media.
Retailers were also urged to be selective about retail media partners and contract with them in a way that recognised their new role as a media owner, independent of them as a retail customer.
Shift in power
Dan Larden, head of media at ISBA said: “For the first time these fmcg companies are the client and for the first time they have the power in the relationship with the likes of Tesco and Sainsbury’s. It is a very interesting shift in power.
“Sudently there is a different dymnamic. If you are in the sales team in fmcg you come to Tesco and Sainsbury’s bowing down to themn saying ’whatever you like sir’, whereas actually if you are media person or marketing person and are suddenly in charge of retail media you are saying ’OK, well, how am I going to measure this’, and you are really questioning every part of that media plan.
“I think that is why retail media is a really interesting opportunity for structural change within fmcg.”
PepsiCo commercial sales transformation senior manager Thomas Gosschalk said: ”There is so much unexplored data in there, if we were really sharing data transparently, we could definitely do more and grow together… hence the need for a mindset shift.”
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