How do you get ahead of the game when the rules are still being written? For anyone looking to master the fast-moving world of retail media, that question will feel all too familiar. The good news is that constant change also makes for great opportunity.
Welcome to Shape What Britain Buys, our look at the retail media trends we believe will define the rest of 2024 and beyond. From an evolution in the way that brands approach the Connected Store, to integrating new team structures, we’ll explore some of the key trends, issues and opportunities to look out for.
Not all of these trends are new. Many have been in motion for some time already. This year, we feel they’ll reach a tipping point – one at which consumer-packaged goods (CPG) brands and media agencies will need to evolve the way they work.
We can't entirely predict the future, but with insight into more than 22 million Clubcard households and their shopping behaviours across the UK, as well as deep connections with hundreds of brands, we can at least make some well-informed predictions about what comes next.
August 2024 Update
Here we are, nearly 8 months on. With the first half of 2024 in the rear-view mirror, we thought it was time to check in to see how our predictions were faring.
What trends were we on the money with and where have we been a little off the mark? To find out, we caught up with Jamie Howett and Ed Sellier - Client Strategy Managers at Tesco Media and Insight Platform—to get their views.
Below, Ed and Jamie share their observations on our five key trends - there’s still plenty of time for things to change yet, of course, and some trends might take a little more time to develop and scale than we originally thought but let’s see how the trends are trending!
Tash Whitmey
Managing Director,
Tesco Media and Insight Platform
The five trends.
Setting the scene.
Before we get into our trends, let’s talk about the world in which they’re taking place. How have recent events shaped the thoughts of Britain’s grocery shoppers – and what does that mean for the brands that want to engage them?
Inflation
The rate of inflation on food is beginning to fall, having reached a 45-year high in March 20231.
At 9.2%, though, it still remains much higher than it was just a few years ago2.
1Cost of living insights: Food – Office of National Statistics, 4th December 2023
2Food and Non-alocoholic Beverages, Office of National Statics, November 2023
Economising
8 in 10 Tesco customers say they’ve changed their behaviours as a result of rising costs.
Basket analysis shows them trading down to own-brand and switching to cheaper ingredients3.
3dunnhumby Shopper Thoughts, June 2023
Value
Ultimately, this makes for a more challenging environment for CPG brands.
As a result, many are using retail media to communicate the added value they bring to customers.
The connected store.
In a more competitive environment, innovative brands will increasingly use store media to build deeper connections with customers.
The connected store offers brands the opportunity to tell a cohesive story, one that speaks to customers at every point on their journey. They can inspire at the entrance, inform between the aisles, and influence near the shelf. And while every channel serves its own specific role, they are more powerful combined – enabling brands to reinforce their value across a varied creative canvas.
In an average supermarket today, thousands of products are on promotion at the same time. Shopping budgets are under pressure, and the popularity of own label continues to grow. “Sleep shopping” is commonplace. In short, competition is everywhere, and brands can’t rely on price alone to stand out.
That’s the promise of the connected store, a network of touchpoints that brings shopping to life through sight, sound, and taste. Whether it’s smart screens at the entrance, digital screens in-store, or scan-as-you-shop handsets, for customers it means more ways to explore and be inspired. For brands, it means more ways to create exciting experiences and meaningful relationships.
85% of Tesco shoppers make on-the-spot decisions about what to buy when shopping in-store4. 4Tesco media internal sales data 2023
Turn the trend to your advantage
In the 40 minutes that a Tesco customer typically spends on each visit, they’ll experience everything from Connected Display screens and experiential and sampling areas, through to in-store radio and ads delivered via Scan as you Shop devices. With every channel playing its own role, brands that identify their optimal mix will cut through the noise from brands competing on price alone.
Stores continue to be massively important to both customers and brands. Even with the recent growth of online a vast proportion of Tesco’s grocery sales still take place in-store, so its paramount that brands are connecting with customers where their mindset is aligned to purchase. The Connected Store provides a comprehensive range of media opportunities for brands to speak to customers and to deliver across a range of objectives, and is therefore unmissable for any truly connected, customer first media plan.
Connor Chappell
Media Strategy & Partnerships Manager,
Tesco Media and Insight Platform
August 2024 Update
For evidence of this trend in effect, we don’t need to look much further than the amazing work done by our partners at Mondelez. For Cadbury’s Easter 2024 activation—which also happened to coincide with its 200th birthday—the brand used almost every store channel available to create a truly connected campaign.
Fully branded power aisles. In-store digital signage. Scan as you Shop ads, and 12-week mod placements. Sampling across 60 stores, allowing shoppers to get a taste for themselves. Awareness-raising radio capable of reaching everyone in the store. And Point-of-Sale shelf talkers featuring a recipe for (the Tesco exclusive) Mini Eggs Orange rocky road—impacting decisions at the shelf edge. “Connected” doesn’t really do this campaign justice.
It worked, too. Mondelez’ all-encompassing approach to store media drove Cadbury’s to its best ever Easter performance with Tesco—and broke through a bunch of our own benchmarks, too.
The verdict:
One example doesn’t make a trend, but this was just one of many campaigns to use the store in this way over the past few months. What’s more, the success of this campaign exemplifies what can be achieved when brands lean into the idea of the store as a connected creative canvas. We’re going to mark this up as a firm hit.
Ed Sellier
Client Strategy Manager,
Tesco Media and Insight Platform
Continuous commerce.
As the way people shop continues to evolve, retail media will power the continual conversations that brands need to have.
Shopping is changing, with customers mashing up missions and fitting in visits wherever they can. “Big shops” still happen, but so do midweek top-ups, on-the-go drop-ins, and deliveries direct to the door. In this world of continuous commerce, baskets are always being built, shoppers consciously and subconsciously deciding what they’ll add next.
This shifting behaviour creates a clear opportunity for brands. As well as engaging shoppers around promotions, events, and seasonal periods, they can continue the conversation in the spaces in between, too. Retail media gives brands the chance to be ever-present in customers’ lives, helping them be part of their thinking on a more consistent basis.
To make that a reality, advertisers will need the help of media partners with cookie-less solutions, helping them to influence in-market and high propensity shoppers across the year. Rather than relying solely on transient promotional periods, always-on retail media will help them stay front of mind all year long – with personalised, app-based product recommendations proving to be particularly effective.
advertisers will need the help of media partners with cookie-less solutions
Turn the trend to your advantage
“Always-on” doesn’t mean “unlimited budget”. Through data science, brands can generate powerful insights, helping them find their most relevant audiences and focus investments strategically. Even the smallest nudge can deliver big returns when it’s both well-placed and well-timed.
The ‘Always-on’ opportunity can be illustrated when observing a category with a relatively stable annual sales index like Pizza (fresh and frozen):
Over half of the year, in-store Pizza sales aren’t supported by Point-of-Sale campaigns5.
Circa 50% drop-off rate between first and second purchases from new to brand customers in the pizza category5.
5Tesco media internal sales data 2023
Continuous commerce isn't just about transactions, it's about seamless interactions across a customer's journey whether they are in-store or online. Brands are exploring more sophisticated targeting capabilities based on historical and predictive purchase behaviours across social, connected TV and the open web, stimulating continuous commerce and allowing brands to reach appropriate customers in a suitable context and need state. By applying this approach over the immediate and long-term, brands ensure they are influencing as many in-market and future customers as possible
Ciara Schmidt
Media Strategy and Partnerships Manager,
Tesco Media and Insight Platform
August 2024 Update
The traditional approach to retail media is to use it in short bursts, typically aligned to specific promotional periods. Can this be effective? Yes—but it’s also one that leads to huge gaps in a brand’s overall engagement strategy.
2024 was the year in which we thought we’d see real movement in this area, with brands shifting towards more of an “always-on” approach. When we look at bookings from the past year, however, it’s clear that most activity is still focused squarely on high-impact, short-term spikes.
What does that mean? Simply, that brands with relatively consistent annual sales are still missing out on the opportunity that continuous commerce presents. As a result, they’re also missing out on the chance to create a genuine point of difference and drive long-term behavioural change.
The verdict:
At the midway point of the year, this one has to go down as a miss. While we stand by the idea of continuous commerce—and do expect to see an eventual shift—we may have been a touch too optimistic with the speed of change needed for this prediction to become reality.
Ed Sellier
Client Strategy Manager,
Tesco Media and Insight Platform
Blended shopping.
As shoppers move seamlessly between channels, the digital shelf has growing influence over in-store decisions.
The boundary between offline and online has never been thinner, with many customers now being blended shoppers – buying their groceries both in-store and through Tesco.com. This shift is about more than where the purchase ends, it’s about where inspiration begins. Our research suggests that for some categories, over a quarter of online users exposed to ads subsequently purchase in-store.
To date, many brands have primarily used digital retail media for driving online conversions. In 2024, brands will re-evaluate the role of online to enhance their Connected Store activations by building frequency to land more educational messages, priming shoppers before they set foot through the door.
In practice, this will mean more online messaging designed specifically with in-store decision making in mind to engage with shoppers as they research and mentally curate their baskets.
Turn the trend to your advantage
The “digital shelf” is now a natural extension of store media. What information can you give customers before a store trip to help them make a decision? How can you create a seamless connection between your online and in-store retail media initiatives, and reinforce your value proposition?
Re-appraising the role of online along the path to purchase is something every marketeer should be considering. Whether customers are researching for price comparison, checking availability or looking for inspiration, having an always on presence is crucial to the success of a blended shopping marketing strategy. Priming customers consistently not only creates strong mental availability for your brand, it reduces the heavy lifting required to prompt consideration of your brand at the moment of truth, in-store or online.
Emma Foley
Head of Planning,
Tesco Media and Insight Platform
If digital retail media allows brands the opportunity to drive eComm conversions at scale, there is an equal, if not greater opportunity to influence in-store shopping decisions while people are browsing and researching. The opportunity for brands to use digital retail media to land complex messages beyond price, drive incremental frequency between store visits, and create greater omnichannel impact should not be underplayed.
James Chandler
CMO,
iab UK
August 2024 Update
Whether you know it by ROPO (Research Online, Purchase Offline), ROPI (Purchase In-store), or EOPO (Exposure Online, Purchase Offline), it all means more or less the same thing: find out what you need to know about a product online before you pick it up at a store.
Blended shopping speaks to the idea that—today—we’re always building our next shopping basket. As a result, brands can use the digital shelf to shape what we pick out at the physical one. And, as our data shows, when they do the results tend to be very impressive indeed.
Just recently, we analysed the performance of more than 1,000 campaigns run across the Tesco Media ecosystem. In doing so, we found that omnichannel campaigns delivered an average sales uplift of 43.75% when compared with in-store only media activities. For any brand with an ambition to drive sales, the results are in: omnichannel works.
The verdict:
Let’s put this one down as a “probably”. Can we state with absolute certainty that more brands are using digital media to prime shoppers before they head to the store? No—but the data we have suggests that omnichannel media is driving huge impact. And if nothing else, that suggests that we’re heading in the right direction here.
Jamie Howett
Client Strategy Manager,
Tesco Media and Insight Platform
Results beyond ROAS.
Full-funnel media needs full-funnel measurement. In 2024, brands will need to show proof of performance that goes beyond ROAS and include metrics like customer lifetime value.
There’s more to success than the sale. Increasingly marketers are excited about retail media’s role in driving return on advertising spend (ROAS), but they are also keen to know how it can support wider, more brand-focused objectives like awareness and consideration.
To answer that question, brands will take a fresh look at retail media measurement. The focus will be on holistic reporting, tracking long-term metrics like customer lifetime value alongside performance indicators like salience, consideration, and purchase intent. Incrementality will be key, too, providing advertisers with a true picture of campaign profitability.
Ultimately, this will mean that the success of a retail media campaign is no longer judged on ROAS or sales numbers alone. Instead, adaptive measurement frameworks will provide a wider and more balanced view of impact.
Turn the trend to your advantage
The key focus in 2024 will be on the standardisation of measurement. The Responsible Retail Media Framework created by ISBA and OMG will begin to gain traction, and media plans will start to show evidence of success across wider business outcomes. This growing sophistication will help to ensure that retail media succeeds as more than just a performance marketing channel.
The current fixation with retail media’s impact on sales ultimately serves to downplay its true potential. Conversion is of course an essential metric but at the same time, suggesting that the end purchase is the only thing that matters is to downplay the vital work that goes on across the rest of the marketing funnel. We all know that there’s much more to convincing someone to buy something than just giving them the final nudge.
Simon Lonsdale
Strategy Director,
Tesco Media and Insight Platform
August 2024 Update
What does success mean to us? That’s the question that many brands have started to ask this year, and it points to a growing realisation that there are more ways than one to measure the effectiveness of a retail media campaign.
Since the start of the year, we’ve spent a lot of time working with clients on the long-term impact of retail media on their business. Along the way, we’ve found that one client’s view of incremental value can be very different to another’s. Where some might point to incremental ROI (over short-/medium-/long-term horizons) for instance, others might look at units per transaction, sales pipeline coverage, new customers, or some other metric.
This increasingly nuanced approach to measurement tells us two things. Firstly, just because someone happens to measure success in a certain way doesn’t mean that you need to. And, perhaps more importantly, brands are definitely starting to think about results beyond ROAS.
Here’s one example showing how brands are thinking differently about measurement.
- One of our clients wanted to understand what impact Tesco Media has on new and repeat customers, as well as the potential value of those customers across their lifetime.
- We jumped into the data and found that those brands with the greatest reach typically achieved the best performance when it came to customer numbers, too.
- This encouraged the client to explore its own category in greater depth, and how its own media strategy could be adjusted to maximise success.
The verdict:
Overall, it feels like we were pretty accurate with this prediction. Is there room for improvement when it comes to retail media measurement? Absolutely, but brands—and networks—are already taking strides towards much greater maturity. Combine that with the first iteration of IAB Europe’s retail media measurement standards (published in April), and it’s clear that this trend is on a fast track.
Jamie Howett
Client Strategy Manager,
Tesco Media and Insight Platform
Retail media teams.
New opportunities demand new approaches. As they look to maximise the potential of retail media, CPGs and media agencies will explore different ways of working, too.
What got us here won’t get us there. 2023 saw brand marketing teams and media agencies asking how to make the most out of retail media. 2024 will see them creating dedicated retail media teams, bringing shopper, trade, brand, agency, and performance expertise together.
Proof of that can already be found. WARC, for instance, has noted a trend towards the creation of retail media “Centres of Excellence”6. Bringing together a variety of marketing disciplines, these collaborative hubs pool knowledge and share resources – allowing for the creation of a truly integrated strategy.
What results are agile teams infused with a thorough understanding of different retail media dynamics. As “blended shopping” continues to grow, this will give marketing professionals confidence that they can keep pace with changing behaviours.
6 How retail media is disrupting marketing structures, WARC 2023
Turn the trend to your advantage
This isn’t about wholesale structural change; from our own research, we know few CPGs have plans to rip up their marketing org charts. What this is about, though, is efficiency. By putting the right people together, you’ll also distribute knowledge more effectively – ensuring that a range of different teams can use retail media to their advantage.
Over the last year, our most successful client partnerships have accelerated through ensuing the right business units are around the table to shape and deliver a singular retail media strategy. In addition to shopper we are also working with digital, media, brand and agency teams, ensuring Tesco Media & Insight Platform works harder to play a more efficient role in driving genuine business outcomes.
In 2024, clients will need to continue to evolve their structure and ways of working to maximise retail media’s opportunity, ensuring more cohesion across media channels and greater collaboration between key business units. Our role as Tesco Media & Insight Platform will be to continue to support these structural and cultural shifts to scale capability and expertise alongside delivering best-in-class execution and customer engagement.
Lee Roberts
Head of Sales,
Tesco Media and Insight Platform
We’re seeing structural and cultural changes across all industry sectors, driven by the explosion in retail media and the ‘intersection of disciplines’ required for success such as media, retail operations, merchandising and product content. In anticipation we created Publicis Commerce over five years ago, which now includes our Retail Media Centre of Excellence with pods closely aligned to our client teams in our award-winning agencies.
We’ve set up this way to work with evolving client structures, to drive better business outcomes through best-in-class delivery, and to help our retailer partners, such as Tesco Media & Insight Platform, bring their exciting new capabilities to our clients.
Steve Ricketts
Chief Commerce Officer,
Publicis Media UK
August 2024 Update
This one was always going to be tricky to monitor. The changes we’re talking about here are subtle rather than structural, and brands and agencies aren’t exactly in the habit of publicising their specific approach to media, either.
At the same time, the indications here are positive. For a start, we’ve seen greater integration across briefs in recent months, with representatives from different disciplines brought into the retail media fold. More generally, retail media is being introduced into the campaign planning process much earlier than it was before.
Are we at the point at which every brand and every agency has a dedicated retail media team? Absolutely not. But, all in all, it feels like cross-discipline collaboration is now becoming the rule, rather than the exception—and that can only be a good thing.
The verdict:
By and large, the jury’s still out on this one. Based on the conversations we’ve been having with partners around the industry, though, it feels like we got this one much closer to right than wrong.
Ed Sellier
Client Strategy Manager,
Tesco Media and Insight Platform
How to Shape What Britain Buys in 2024.
To win with retail media in the next 12 months, brands and their agency partners should:
1.
Treat the Connected Store as a creative canvas
Use a mix of touchpoints to land a story and reinforce product or brand benefits beyond price.
2.
Create a continuous conversation with shoppers
Engage and inspire beyond promotional and seasonal periods by using loyalty programme
data to add value to the customer journey.
3.
Treat the digital shelf as an extension of the physical shelf
Don’t forget the digital shelf, keep your products front-of-mind with blended shoppers.
4.
Focus on a wider set of metrics
ROAS in isolation isn’t a true indicator of success. Look to the metrics that can help you tell a cohesive story around brand and business outcomes.
5.
Set up for success
Bring multiple disciplines together in dedicated teams, which will help put the customer at the heart of media plans.