Albertsons Envisions the Future of Retail Media

Maximizing the potential of in-store campaigns and connected TV are big opportunities for food retailers
Gina Acosta
a woman smiling for the camera
Evan Hovorka, VP of product and innovation at Albertsons Media Collective

Albertsons Cos. thinks the next big opportunities in retail media will be centered on the potential of connected TV (CTV), in-store campaigns, and on-site search.

In an exclusive interview with Progressive Grocer, Evan Hovorka, VP of product and innovation at Albertsons Media Collective, said the future of retail media “is going to be a lot of in-store." 

“We've talked about that now as an industry for a while,” Hovorka said. “It's just a very difficult thing to land because of the organization and coordination required with big enterprise, merchants, with thousands of stores required to put any hardware in there. … The other challenge that we're seeing in the in-store is just centralized ad decisioning.”

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Hovorka says some companies have done a good job building silos, but that there’s a caveat to that. 

“Some retailers have interesting stuff that they're doing with single vendors. Digital display screens show up in some places, the cooler screens. But they're almost, like, purposely siloed with things because that's what that company's good at,” Hovorka said. 

Albertsons, on the other hand, is focused on trying to make the store experience feel more connected and cohesive. 

“Tying that together to tell one story so that L’Oreal, for example, can come in and do a full channel takeover, if they want, and execute it with one seamless vision. That's really the goal we have for 2024.”

Hovorka thinks that this need for a seamless vision might force some vendors to consolidate and operate as one unit, or encourage single vendors to expand their ownership. 

“If you're good at audio, it doesn't mean you're good at printing. It doesn't necessarily mean you're good at video recipes on a display screen. So there's a little bit of friction across all ports. But the opportunity is so great that we have to figure it out,” he said.

Another priority for Albertsons Media Collective this year will be to expand the product suite.

“Because you may not like cherry or vanilla, which we've been selling to you for a couple of years, but here's some chocolate and banana,” Hovorka said. “It really gets different with the various CPGs. Some love Pinterest. Some love Meta. Some want CTV. So it's really rounding out that spectrum. Expanding digital in-store. We certainly sell it today. It does really well, but it could do better. More inventory, more flavors, more cohesive experience.”

Albertsons is also thinking about ramping up capabilities related to measurement and automation when it comes to campaigns. 

“How do we make the stuff they are investing in perform better? We've been investing in machine learning and AI for a long time, but then we have a more concerted investment with Capgemini,” Hovorka said. “And automation scale. We used to optimize campaigns once an hour, now we can do it once a minute. So the performance should go up exponentially.”

Albertsons is also looking to tune-up the basics as well, such as on-site search.

“Even in that world, there's been big advancements or companies that have proven themselves to be the industry leaders,” Hovorka said. “We moved over to Criteo last month. We were with a competitor for a number of months struggling to really fulfill the potential of the channel. So we're already seeing some results from that.”

Hovorka mentioned Kohl’s as an example of a retailer that is doing a good job of executing campaigns in-store.

“They have a digital shelf tag, and so they can dynamically update pricing and promotions all day every day, without printing or payroll,” Hovorka said. “How do we dynamically get price changes or the proper promotions in the hands of the consumer without putting a lot of payroll into stores?”

The other piece of in-store that hasn't come to life yet, Hovorka said, is the push for inspiration, not impressions. 

“The moments in which we deploy advertising have to be special,” he said. “Can we influence that with a really cool guacamole recipe on a video loop or something new in the gluten-free aisle that's not invasive, where you have to interrupt, but it can inspire if you want to engage? Or there's a QR code against a video recipe? So those moments where they're probably fewer but more meaningful. Meaning higher price tags to the marketer, but higher performance done as well.”

Hovorka said he envisions in-store digital media to consist of a lot of display screens likely deployed at key positions throughout the store that are incremental in service of solutioning to the shopper.

And then inspiring. 

“It’s not going to be just a display at Coca-Cola; it should show a movie night,” Hovorka said. “And here's all the things you need. Here's where the popcorn is in the aisle. Here's the coupon for Coke, and tie all together to make it feel like a solution.”

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And many of those campaigns may have a localized strategy.

“That's another thing we're investing in in 2024,” Hovorka said. “We've got a lot of national campaigns with national brands. And as we get better and faster, we can go deeper into the CPG list to get into the smaller, medium-sized guys. Who maybe only play in Texas or SoCal. So getting into those bespoke brands.”

Finally, Hovorka talked about the huge potential with CTV.

“For grocery specifically, it's expensive. The CTM on that is a lot higher than other opportunities. And then tying it to incrementality. Being able to prove, you saw this on Hulu and made a purchase, is a little trickier than say, doing it with Google or Meta,” Hovorka said. “But the potential is there. And so, the strategies that we're approaching it with are one of whole brands and inspiration. So it's probably not going to be, ‘Hey, come buy this cup.’ It'll be, ‘Here's a whole experience with two or three or four products,’ maybe from the same CPG. You're rounding out the whole recipe.

“One example is McCormick spices because it’s several products or occasions tied together. Another example that works is with breakfast, where it's Florida orange juice, Jimmy Dean sausage, there's a waffle in there. So three or four brands can come and bring the media costs down, tell a better story, and we see the halo sales.”

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