Instacart, Ahold Delhaize target in-store retail media ad dollars

The news: Instacart announced three new ad capabilities for its Caper Carts as part of its latest bid to take advantage of growing demand for in-store retail media.

They are:

• Gamified quests, which allow shoppers to earn rewards and credits for repeat visits or for tasks such as clipping personalized coupons, and search for flash deals throughout the store
• Location-based coupons, which are served to Caper Cart users based on where they’re located in the store, and will eventually be personalized based on customers’ purchase histories and the contents of their carts
• Aisle-aware advertising formats, which CPG brands can use to reach shoppers in relevant aisles (for example, by displaying an ad for Cinnamon Toast Crunch at the moment a customer enters the cereal aisle)

Why it matters: For retailers like Ahold Delhaize, in-store is the “next frontier,” as they look for ways to monetize their stores and take advantage of the fact that the vast majority—83.8%—of sales take place in person.

• Ahold Delhaize is in the process of working out its in-store strategy, which includes using existing screens and technology to run video ads, engaging store shoppers via its mobile app, and partnering with Vibenomics to give CPG advertisers the ability to run audio campaigns.
• But outfitting stores with the technology needed to carry out in-store campaigns (like digital screens, electronic labels, and smart carts) is expensive, and can add friction to the customer experience—two factors that will keep in-store’s share of omnichannel retail media ad spend below 1% through 2028.

Our take: It’s no surprise that Instacart and Ahold Delhaize are interested in expanding in-store advertising opportunities, given that physical stores account for the majority of retail sales, and attract audiences far larger than the number who visit retailers’ ecommerce channels.

• While in-store retail media is a small slice of total retail media ad spending, it’s growing considerably faster than the overall segment.
• We expect US in-store retail media ad spending to grow 31.9% this year to $370 million, although it won’t surpass the $1 billion mark until 2028.

However, technical limitations alongside concerns over measurement and attribution will weigh on near-term growth.

Go further: Read our In-Store Retail Media 2024 report.