Retail media is in the news every week as retailers and brands worldwide expand and innovate their offerings. Retail media refers to retailers monetising their physical and digital assets by enabling advertisers to reach shoppers with targeted messages, often at or near the point of purchase.
Recent examples include major players like Metcash, Wesfarmers and Woolworths, all of which are expanding their retail media capabilities through initiatives such as digital screens and in-store radio ads.
In the case of Metcash, it’s been reported that the company is pursuing an ambitious retail media strategy. Metcash is targeting a $30 million annual earnings contribution from retail media by 2029, with a phased rollout beginning in supermarkets this year, followed by liquor and then group-wide implementation.
The ASX-listed group sees particular potential in local advertising and community targeting through its independent store network, with plans to share profits with these independent operators.
Wesfarmers has made equally significant moves, with Bunnings, Officeworks and Priceline each launching their own retail media businesses to diversify revenue streams.
The company’s growing OnePass program, combined with PowerPass and Flybuys data, has created a robust foundation for their retail media strategy. Recent investor updates highlighted “strong engagement and results from initial retail media trials” at Bunnings.
Woolworths’ retail media arm, Cartology, has also shown remarkable growth. Operating across online, in-store, and retail out-of-home media assets, Cartology has expanded its reach significantly in 2024.
Notable achievements include growing their retail out-of-home network to over 3300 screens across 530 shopping centres, complemented by 1900 in-store screens throughout the Woolworths ecosystem. Strategic partnerships, including with Mirvac,and a major rollout with Vicinity Centres, have further strengthened their position in the market.
It’s an exciting time in the retail space with regards to retail media innovation and experimentation.
However, while most large retailers are now participating in retail media, the results are not uniform. Only a few omnichannel retailers globally are achieving the benchmark of generating over 0.5% of their sales through retail media.
A key differentiator among these top performers is their strategic use of personalised loyalty programs. This blog explores how personalised loyalty programs can be a game-changer for retail media success and why they are the secret sauce behind the industry’s top achievers.
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1. Precision Targeting & Personalisation Across Channels
One of the most significant benefits of personalised loyalty programs is their ability to deliver targeted experiences across both in-store and online channels.
A recent example is UK retailer Tesco’s Clubcard Challenges program, which has driven record levels of digital engagement and sales. By using AI-driven solutions, Tesco tailored challenges to each customer, encouraging participation and rewarding completion with up to £50 in Clubcard points. This approach increased customer engagement and spend, demonstrating the effectiveness of personalised and gamified loyalty programs.
2. Enhanced Customer Data & Insights
Personalised loyalty programs are a treasure trove of first-party customer data. By tracking customer behaviours, preferences, and purchase patterns, retailers can build detailed customer profiles. This enables them to create tailored messages that resonate with individual customers, driving higher engagement and conversion rates.
For example, Southeastern Grocers’ SEG Connects retail media program uses its loyalty platform to gather detailed customer insights.
These insights are then used to create highly targeted, personalised campaigns that cater to customers’ unique needs and interests. Advertisers can leverage this information to connect with the right audience at the right moment, leading to increased campaign effectiveness and higher advertiser satisfaction.
3. Real-Time Data for Campaign Optimisation
Personalised loyalty programs provide a continuous stream of real-time data on customer behaviour across all channels. Retailers can use this data to monitor campaign performance, identify underperforming elements, and make adjustments on the fly.
This level of agility is crucial in today’s fast-paced retail environment, especially as AI-driven technologies will empower marketers to respond to real-time data, such as shifting customer preferences or emerging sales trends.
For instance, Tesco’s Clubcard data allows the retailer to track the effectiveness of its retail media campaigns, measuring sales uplift for featured products.
With access to detailed reporting, advertisers can see how many customers were influenced by the campaign and how much they spent. This data can be used to optimise campaigns in real-time, maximising return on ad spend (ROAS) and overall performance.
Enhancing the Experience
A personalised loyalty program is more than just a tool for rewarding customers, it’s a strategic asset that unlocks the full potential of retail media.
By leveraging comprehensive customer insights, enabling precise targeting, and providing actionable, real-time data, personalised loyalty programs empower retailers to create highly effective, cross-channel media campaigns.
In my view, retail media’s biggest winners will be those retailers who can integrate their loyalty programs into their retail media strategies to enhance the customer experience and maximise the value of every campaign.
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