Walmart, Kroger continue to invest in their retail media networks

The news: Walmart and Kroger announced enhancements to their retail media offerings that would make their platforms easier and more effective for advertisers to use.

  • Walmart is adding ad formats, including video and in-store opportunities, to its platform, and introducing more automation to make campaign management and optimization simpler, per a company press release.
  • Kroger is opening up its ad inventory to several third-party platforms, making it easier for advertisers to purchase ads and manage their campaigns, per MediaPost.

More on this: Retail media networks run by grocers hold particular appeal for consumer packaged goods (CPG) brands as they aim to grow their ecommerce businesses and get insight into their audiences’ shopping behaviors.

  • But both Kroger and Walmart ranked lower in our inaugural "Retail Media Networks Perception Benchmark": They came in ninth and 10th respectively, behind Amazon (second) and Instacart (fifth).
  • CPG advertisers’ top concern was traffic scale, followed by the ability to access in-store and omnichannel sales data. Both Walmart and Kroger ranked near the top on traffic scale, while the latter also fared well on omnichannel sales data.

CPG goes omnichannel: Omnichannel reach and execution were key factors in CPG brands’ success in 2021, as more purchases took place online.

  • 35.2% of non-edible CPG sales came from digital channels, up 12.1 percentage points from 2019, per a report from IRI and Boston Consulting Group.
  • 11.1% of food and beverage purchases occurred online, a 1.4% increase from 2020.

However: CPG brands are still largely reliant on their retail partners to provide data on how people are shopping, both in-store and online. What they need is a retail media network that can effectively tie together offline and online sales data to deliver more precise targeting and attribution, as well as a holistic view of a customer’s entire shopping journey—but no network on the market currently fulfills all those criteria.

The big takeaway: As the two largest grocery chains in the US, Walmart and Kroger have a huge advantage when it comes to overall traffic to their properties, but any limitations in linking digital ads to in-store sales for real-time targeting and measurement could inhibit how fast these retail media networks will scale.

  • While retailers might see an ad network as an easy opportunity to increase revenues, the sheer volume of media networks available means that advertisers can afford to be choosy, and go with the option with the most sophisticated functionality.