Grocers See AI-Powered Personalization as Key Success Driver in Retail Media Networks; Predicts a 13% Increase in Retail Media Revenue in 2024

Grocery Doppio’s January 2024 Digital Grocery Performance Scorecard reveals grocer and shopper sentiment on retail media deployment, alongside the latest insights from grocery industry sales data. 

Incisiv, a next-generation industry insights firm that helps retailers and brands navigate digital disruption, and Wynshop, the leading provider of digital commerce and fulfillment solutions for grocers and other local store-based retailers, today revealed the findings from the State of Digital Grocery Performance Scorecard for January 2024.

This month, Grocery Doppio asked grocers and shoppers for their opinions about retail media networks. The results delivered a clear message that shoppers are willing to click on ads, but only if they are relevant:

• Grocers are optimistic about retail media networks: They predict an average 13% rise in revenue in 2024.

• Shoppers welcome ads, if they are relevant: 93% say that relevancy of offers influences their purchase decision; 73% report having clicked on an ad when they thought it was relevant; 84% responded to limited-time-only deals; But 91% said they already see too many ads online.

• AI is a key enabler of retail media success: 82% of grocers believe that AI can improve shopper targeting and 87% think it can improve pricing and inventory management, but less than 7% are currently utilizing AI for that purpose.

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The monthly State of Digital Grocery Performance Scorecards are one of many resources available on the Grocery Doppio website. The latest report was built around aggregated data analysis of 2.4 million shopper orders and survey results from more than 42,000 shoppers and 4,000 U.S. grocery executives from January 2022 to the present.

More key findings from the January 2024 Performance Scorecard include:

• Overall grocer sales continued to grow, while digital remained flat.
  • There was $76.5 billion in grocery sales in January 2024, a 4.7% YOY increase from January 2023.
  • 13.8% of all January 2024 grocery sales were digital ($10.6B), down 1% from January 2023.

• Digital basket size and items/basket were both up dramatically.
  • Average digital grocery basket value in January 2024 was $176.1, an 11% increase over January 2023.
  • Items/basket also rose, with a January 2024 basket containing three items more than in January 2023.

• Third party sales and fulfillment preferences have settled in.
  • After falling from over 30% of digital grocery sales in January 2022 to a low of under 15% in December 2023, third-party share of digital grocery leveled out at 14.9% in January 2024.
  • Pickup and delivery methods of fulfillment continued to joust for parity, with delivery reclaiming a 51% share to pickup’s 49% in January 2024, as compared to the reverse scenario in December 2023.

“Retail media should be a major focus for grocers in 2024,” said Gaurav Pant, Chief Insights Officer of both Incisiv and Grocery Doppio. “Now that grocers have succeeded in staking out their own claims in the digital grocery frontier, they will double down on initiatives that help them maintain customer loyalty and improve profitability.”

“AI is the real story here,” added Charlie Kaplan, Chief Revenue Officer at Wynshop. “Shoppers respond positively to online grocery ads, but only if they are timely and personally relevant. Grocers’ ability to finely target offers to the preferences of individual shoppers using AI will be the key to success in the retail media game this year.”

Grocery Doppio is a free, independent source of grocery insights and data designed to help grocers jumpstart, accelerate, and sustain digital growth. Each month, Grocery Doppio brings together rich, research-driven grocery content, fact-based observations, inspiring perspectives, and deep performance benchmarks that identify improvement opportunities for grocery retailers.

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