How Albertsons and Hy-Vee Approach Retail Media

Albertsons Cos. and Hy-Vee teamed up during GroceryTech in Dallas to speak on the topic on every retailer’s mind: retail media. Multimedia Editor Emily Crowe moderated the session that featured Michael Halverson, principal product manager at Albertsons Media Collective, and Kathryn Mazza, SVP of RedMedia at Hy-Vee, Inc. 

Hy-Vee launched its retail media division RedMedia in September 2023, while Albertsons Cos. unveiled its retail media network, Albertsons Media Collective, in November 2021.

Crowe kicked off the session inquiring about partnerships, since a successful retail media ecosystem often hinges on leveraging partnerships.  

Mazza recommends choosing a partner that is honest and understands your business in an intimate way -- “a partner that fits in with culture of your company,” she explained. Mazza stressed that grocery is a fast-paced industry so a good partner should be able to pivot when necessary. From personal experience, Mazza makes a point to challenge partners to be creative and innovative. “While it’s important to hit goals, you also want a partner that's going to be very creative and very forward looking as well. Once you hit that original goal, you want a partner that is not complacent because as a retailer, we can't afford to be complacent, so we need partners to have that same mentality.”

Halverson says looking at data is the first thing to consider when choosing a partner -- i.e. how can they enhance the data so you can maximize the value of the partnership. “I also avoid partners that are trying to market across several retailers; something that might work for Albertsons might not work great for other retailers.”

Additionally, Halverson says Albertsons Media Collective looks for partners that can “sit down with the us and let their product take a backseat to the conversation and really just talk about problems in the industry and creating solutions that shape the future.” The company believes so much in this concept that it created a physical space called The Garage where they invite partners, including advertisers, to come by for white-board sessions that are fully devoted to building and creating. 

In-Store Opportunities

Both Hy-Vee and Albertsons are excited about in-store opportunities.  

“There are so many opportunities to message the shopper in-store on their journey with different content,” said Halverson. Since a majority of in-store transactions are digitally influenced, that has been the foundation of how Albertsons Media Collective is approaching it. “It’s about completing their [shoppers] entire journey from online to instore, creating technology to allow the brands to have seamless messaging.”

Hy-Vee is also investing heavily in in-store capabilities. “We have 10,000 premium digital screens placed in high-traffic areas or where they pause a moment in their purchase journey,” said Mazza. These moments of pause include behind the deli, the meat counter even at the pharmacy. Hy-Vee also has in-store audio and allows CPGs to conduct surveys at the point of purpose on credit card machines.

“It's a really powerful thing to be able to let the CPGs reach the customer when they're at its closest intent of purchase with a curated unique message,” she said.

Mazza also explained that Hy-Vee is working hard to make sure its network organization is tied in with its merchant organization. “We are making sure our digital offerings that are standard to typical retail media network and our in-store offerings are tied to the actual product in store,” she said. “That’s something that going to really differentiate ourselves. Others have tried and we are cracking the code on it and it’s going to be really powerful.”

Utilizing More 1st-Party Data 

Something we're all hearing a lot about is the cookieless future and a move toward utilizing more first-party data in marketing. 

Mazza says “first-party data is the backbone to retail media. And quite frankly, all of marketing.” She says if you can leverage your first party data in the right way, you can save a lot of money on your marketing and be much more efficient. 

Hy-Vee is also launching a new CDP to make sure that all of its data is organized. “It's segmented, we can slice and dice our data to meet our marketing audiences,” Mazza said. “Most importantly, the customers are going to win because you're going to be feeding them content that they want to see when they want to see it and it's going to be relevant.”

Halverson said the biggest challenge is going to be measurement, specifically from the brand perspective. “One of the questions that we are asking ourselves is what the responsibility of a retailer to make sure that brands of all sizes that are funding this ecosystem have the ability properly measure their retail dollar touchpoints in a cookieless environment," he explained. "How can we make sure brands maintain the level of measure expected but use this as opportunity to improve it.” 

AI in Retail Media 

Halverson addressed AI growth in retail media, acknowledging that AI can really touch everything. Albertsons Media Collective is partnering with Capgemini on this front. 

Capgemini harnesses the power of the company’s intelligent process automation technology for enhanced media planning, media operations and content creation.

The company uses robotic process automation and GenAI to unlock deep learning insights, which will allow Albertsons Media Collective to automate media planning, activation workflows and creative versioning, as well as offering insights for live campaign optimizations.

Going Forward

Crowe wanted to know what can we expect from Hy-Vee and Albertsons moving forward.

For the balance of this year, Hy-Vee is going to continue to focus on scaling, bringing additional CPGs into its ecosystem. “We’re really working on innovation,” said Mazza. “We have a sponsored product ad offering called ProdX, a conversion-based payment method. Our CPGs do not actually pay for any media unless the user actually converts. It’s been well received, we’ve seen amazing results. It’s differentiating us from other retail media networks.”

Halverson says Albertsons Media Collective is exploring the relationship with retail media and the merchandising side of the house. “The merchants have significant power over what gets sold in stores and online,” he said. “So the best retail media campaign probably will fail if that product is deprioritized from merchant perspective. Our hypothesis is that when you plan retail media around what merchants are doing, then both mechanisms can perform better on behalf of the brands than either individual mechanism on its own.” Halverson is excited about running experiments to validate that hypnosis. 

Plus, Halverson is really excited about an announcement made that will be made form his company next week on LinkedIn. Stay tuned.