What Makes Tesco's Retail Media Strategy a Game-Changer and Differentiator

Retail media is emerging as a powerhouse in the advertising world, projected to grow to $54 billion by the end of 2024. Grocery retail alone is expected to generate $8.5 billion within this space. According to a recent Grocery Doppio report, 73% of grocery C-suite executives rank retail media as a top priority due to its ability to:

• Boost sales volumes.
• Increase trade spend share.
• Attract new CPG shopper marketing investments.
• Enhance engagement among key demographics, including Millennials (73%) and Gen Z (63%).

Grocers deploying in-store retail media have seen a 14% increase in conversions, according to Grocery Doppio. Meanwhile, 17% of shoppers report that retail media advertising directly influences their buying decisions. With digital sales projected to grow to 9.7% by 2025, grocers must capitalize on retail media to unlock new revenue streams and drive shopper engagement.

Retail Media: The Revenue Maker for Grocers

Retail media offers grocers a unique opportunity to combine onsite, offsite, and in-store channels into a cohesive advertising strategy. By leveraging customer data and creating personalized campaigns, grocers can drive significant revenue growth. In the UK, digital retail media advertising attracted £3.4 billion in spending in 2022, with a projected annual growth rate of 23% until 2026.

For Tesco, retail media is not just a revenue channel but a strategic pillar. Through its Tesco Media & Insight Platform, powered by dunnhumby:

• Over 450 brands have partnered with Tesco, achieving an impressive £6.60 ROAS for multichannel campaigns, compared to £3.80 on other platforms.
• Tesco leverages its Clubcard data to deliver highly targeted, personalized campaigns, bridging digital and in-store shopper experiences.

Tesco's Leadership in Retail Media (2022-2024)

2022: Launch of Tesco Media & Insight Platform

Tesco began its retail media journey in 2022 with the launch of the Tesco Media & Insight Platform, providing tools to:

• Leverage actionable customer insights from Tesco Clubcard data.
• Execute full-funnel campaigns across digital and in-store channels.
• Measure and optimize campaign performance.

2023: Scaling In-Store Media Solutions

Tesco expanded its in-store presence by:

• Introducing dynamic ‘Scan As You Shop’ media placements.
• Deploying over 1,000 digital screens to engage shoppers at critical touchpoints. This enhanced omnichannel strategy bridged physical and digital experiences for both brands and shoppers.

2024: Strategic Partnerships and Innovations

• June 2024: Partnership with GroupM
  Tesco collaborated with GroupM to elevate retail media standards, focusing on delivering data-driven solutions, fostering marketer education, and advancing campaign execution and measurement.
• September 2024: Collaboration with The Trade Desk
  Tesco expanded its programmatic advertising capabilities by partnering with The Trade Desk, streamlining access for brands to connect with Tesco’s vast audience.
• October 2024: Video Advertising and Store Wraps
  Tesco launched video advertising on its app and website, engaging over 16 million Clubcard users with short-form content. Additionally, Tesco introduced store wrap advertising at 50 locations, transforming storefronts into immersive, region-specific marketing showcases.
• Tesco Retail Media Certification
  Tesco launched a comprehensive training program through its Retail Media Academy. This certification equips marketers with in-depth training on planning, activating, and measuring retail media campaigns. Over 250 professionals from leading agencies, such as Essence Media.com and Publicis Media, have completed the program.

Tesco: The Differentiator in Grocery Retail Media

Tesco has solidified its leadership in retail media with four key differentiators:

1. Retail Media Leadership Tesco began its retail media journey with the Tesco Media & Insight Platform, providing innovative tools for targeted and optimized campaigns.
2. Clubcard-Powered Personalization Tesco’s Clubcard data drives its retail media strategy by personalizing offers based on shopper behavior and boosting loyalty through relevant promotions.
3. Industry-Leading Certification The Tesco Retail Media Certification has trained over 250 marketing professionals, setting an industry benchmark for education and professional development.
4. Collaboration with IAB Tesco is one of the 25 companies steering IAB UK’s direction and has collaborated on defining standardized metrics and strategies for retail media campaigns.

How Tesco Integrates Digital and In-Store Media

Tesco’s innovative approach ties digital and in-store media for seamless shopper engagement:

• Dynamic In-Store Media: Tesco has deployed 1,000+ digital screens and ‘Scan As You Shop’ ads to engage shoppers in real time.
• Video Advertising: Short-form video ads on Tesco’s app and website reach over 16 million Clubcard users, driving both engagement and in-store visits.
• Omnichannel Campaigns: Tesco aligns digital promotions with in-store offers to create a unified shopping experience.

The Financial Impact of Tesco's Retail Media Strategy

Tesco’s retail media efforts have delivered measurable financial results:

• 10% profit growth, reaching £1.56 billion in the first half of 2024.
• 4% sales growth, totaling £31.5 billion, driven by personalized campaigns and enhanced shopper engagement.

Why Retail Media is Essential for Grocers

Retail media is no longer optional for grocers; it is a revenue game-changer. Grocery Doppio’s research highlights:

• 14% increase in conversions for grocers deploying in-store retail media.
• 17% of shoppers are influenced by retail media advertising.
• Digital sales are expected to grow to 9.7% by 2025, making retail media vital for capturing shopper attention and driving revenue.

Call to Action: Ready to Transform Your Grocery Business?

Grocers looking to maximize revenue and shopper engagement must embrace retail media. Tesco’s pioneering strategy offers a roadmap for success. Learn how to leverage in-store retail media to drive revenue by downloading Grocery Doppio’s report:
The State of Digital Grocery: In-Store Media Monetization.