How Asda is planning to double its retail media revenue
For The Drum’s latest Deep Dive, The New Retail Landscape, we catch up with the British supermarket’s head of retail media, who tells us how it is upping its game in the space.
Asda on its retail media plans
Since 2015, Asda has seen the potential of retail media (albeit it wasn’t calling it retail media back then). Fast forward eight years and the supermarket is gearing itself up to make it a significant part of its overall revenue.
We caught up with Steven Gray, head of retail media at Asda, at the first Retail Media Summit UK, where he shed light on its plans and told us: “We make a material amount of money for Asda and we’ve got ambitions to double it.”
Asda had been ahead of the pack, launching the first iteration of a retail media network as early as 2015 when it partnered with Triad to offer inventory on its website. By 2017, it had started trading programmatically. (When The Drum spoke to Asda’s then-senior director of marketing innovation and revenue, Dom Burch, in 2016, before the term retail media was common, the closest he could compare it to was selling ad inventory in the same way a publisher would.)
Asda’s retail media offering was then majorly accelerated by its former owner, Walmart, providing it with expertise and tech advancements. At the same time, however, the US chain was holding it back in one area central to retail media – shopper data. Gray says Asda has been “disadvantaged by not having a loyalty program” – something he says Walmart prevented for fear it would be at odds with its ‘everyday low prices’ proposition. Asda finally rolled out its loyalty program in 2021.
Asda retail media offering now
Dispelling the hype around retail media, Gray says that, in essence, it has existed ever since shops existed – there have always been brands advertising in and around shops, he says.
“What’s changed over the last few years has been the introduction of innovative media and retail websites and a lot of people are calling that retail media. But that is really just a subset of retail media.”
There has been an “explosion of touchpoints” across a retailer’s portfolio and now the job is trying to work out ways to “harness that and package it in a way that makes it attractive to advertisers,” he says.
Asda has real estate online through its grocery shop, plus podcasts and social sites, and then in-store through digital boards, a radio station, sampling and events. Currently, Asda advertising is about 50/50 digital and in-store.
“What’s changing rapidly is the innovation in the propositions – so the things that you can sell. In-store, there is a tremendous amount of innovation in screens and digitization.”
An emerging trend has been the increasing investment of non-consumer packaged goods brands in retail media networks, termed by the industry as ‘non-endemic.’ Retailers are busy sizing up the potential opportunities with these brands.
Gray says Asda already has a “wide range” of non-endemic brands advertising on digital placements. Asda has done this with the likes of Sky, for example, with its ‘Big Night In’ promotion, where customers can buy a pizza and a side and a £5 Sky cinema voucher. “We are starting to build packages that will be attractive to the consumer services companies. That’s a key strategy for us.”
Retailers do face challenges when forging relationships with these types of brands for which few have existing relationships. This is where, he says, Asda will be calling on media agencies to bridge the gaps.
Media agencies and tech partners generally will be vital to Asda meeting its lofty growth ambitions, Gray says. Retail media is a “huge ecosystem of technology providers and agency partners it is quite complex.” Criteo is Asda’s tech partner.
“The question is how do we work more strategically with media agencies on both endemic and non-endemic? Because they [agencies and tech] are also adapting to retail media, so we want to be working with the ones that are the most innovative.”
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A key challenge for retailers when scaling their networks is that around 80% of purchases happen in-store, yet the in-store proposition isn’t as advanced as online. Digital advertising has meant brands and their agencies have high expectations when it comes to measuring their investment, but it’s significantly more challenging to track in-store.
Retailers are increasingly using sensors to overcome this challenge – Asda is one such retailer. “In-store screens with sensors allow us to identify personas, quite accurately, for age and gender,” Gray reveals.
“We’re still trying to figure out how we’re going to deploy that to show the optimum content, but we can identify audiences in-store from their shopping behavior or loyalty card and use that to create premium propositions to make those audiences available to brands in and outside of Asda.”
For the year ahead, Asda’s investment priority will be on digitizing the in-store experience and expanding what it calls its ”audience spaces and solutions.” This is using the date from Asda’s loyalty program to target both online and in-store using the rewards app.