After making the decision last year to bring its retail media business in-house, Ahold Delhaize USA wasted no time getting its capabilities up and running. Bobby Watts, SVP of AD Retail Media, spoke with Progressive Grocer about how the company’s first year in the retail media business has unfolded, where it’s headed and his thoughts on the future of this increasingly relevant business.
AD Retail Media is a division of Peapod Digital Labs, the digital, e-commerce and commercial company of Ahold Delhaize USA, and encompasses an end-to-end retail media business supporting the Food Lion, Giant Food, The Giant Co., Hannaford and Stop & Shop banners. The business offers a full capability suite that includes traditional sponsored search and social, on-site display, off-site display, CTV, a digital out-of-home network and more.
The decision was made in July 2022 to bring Ahold Delhaize USA’s retail media business in-house, Watts explained, and wheels were fully in motion just two months later to get teams stood up and to get the technology integration underway. The new business was nearly fully functional by Jan. 1 of this year.
“Q1 was bumpy, as you could imagine, but we’ve been really building momentum and I feel like we have a really good trajectory from where we sit today,” Watts said.
Reflecting on the first year of AD Retail Media, Watts shared that the whole organization has had to learn to shift their mindset to think more like a media publisher as opposed to a traditional grocer.
“Inside of our organization, retail media is so new,” Watts said. “While we’ve been at it for a little while, when you talk about doing it in house and acting like a media publisher and not like a traditional retailer, it’s a big shift in mentality, a shift in financial investment and a shift in folks understanding the capabilities, [as well as] how we can actually drive our mutual business between the local brands, CPGs and agencies we partner with.”
Watts also said his team quickly realized the importance of having the right talent on board, especially as it pertains to salespeople with specific knowledge of the full-funnel omnichannel activations the company is focused on delivering to its advertisers.
“As we looked across the different functions, and as we’ve stood up sales, account management, ad operations, analytics and marketing, one of the things that’s been really interesting and challenging at the same time is just ensuring that we have the best-of-the-best talent,” Watts explained.
Ahold Delhaize USA's retail media arm has been up and running for nearly one year.
When it comes to competing against larger national retailers for ad dollars, Watts believes it’s more important to have quality than it is to have scale, stressing that Ahold Delhaize USA’s banners have a highly engaged shopper base with more than 80% of its sales driven by loyalty card transactions. He also believes in the strength of the grocer’s reach in its designated market areas, which include large cities like New York City, Washington, D.C., and Philadelphia.
Watts says leveraging that customer loyalty data has helped the company drive sales for its CPG and agency partners, especially using past purchase history and other first-party data that allows AD Retail Media to have closed-loop measurement and attribution to both online and in-store sales.
In fact, an October white paper from location analytics and marketing intelligence company Placer.ai affirmed that retail media networks owned by grocery chains are helping brand partners connect with new audiences, underscoring the use and effectiveness of in-store deployments. AD Retail Media was specifically called out for reaching shoppers in an omnichannel way, with different approaches and opportunities across its owned banners.
As for the future of AD Retail Media, Watts says he is focused on optimizing capabilities, as well as further exploring how shoppers interact with digital touchpoints in physical stores to bring even more capabilities into the retail media network. Additionally, Watts looks forward to strengthening collaboration with category merchandising teams to create a more cohesive and consistent shopping experience for Ahold Delhaize USA’s customers, while also providing the most bang for advertisers’ buck in today’s omnichannel world.
Watts says it’s been fun to learn the retail media space and to build something from the ground up. “I really am excited about the path ahead,” he said. “We have really good talent and really good folks that we’re excited about.”
Concluded Watts: “At the end of the day, we’re selling groceries, we’re providing nourishment and food to families. People need to eat, so how can we make that seamless and frictionless for them and create some discoverability along the way?”