How do you get ahead of the game when the rules are still being written? For anyone looking to master the fast-moving world of retail media, that question will feel all too familiar. The good news, though, is that constant change also makes for great opportunity – if you know where to find it.
Welcome to Shape What Britain Buys 2024, our look at the retail media trends we believe will define the year ahead. From an evolution in the way that brands approach the connected store, to integrating new team structures, we’ll explore some of the key issues to watch out for over the next 12 months.
Not all of these trends are new. Many have been in motion for some time already. But in 2024, we feel they’ll reach a tipping point – one at which consumer-packaged goods (CPG) brands and media agencies will need to evolve the way they work.
Can we predict the future? Clearly not. But, with insight into more than 21 million Clubcard households and their shopping behaviours across the UK, as well as deep connections with hundreds of brands, we can at least make some well-informed predictions about what comes next.
So, what does 2024 have in store for CPG brands and their agency partners? Let’s find out.
Stacy Gratz
Media Managing Director,
Tesco Media & Insight Platform
The five trends.
Setting the scene.
Before we get into our trends, let’s talk about the world in which they’re taking place. How have recent events shaped the thoughts of Britain’s grocery shoppers – and what does that mean for the brands that want to engage them?
Inflation
The rate of inflation on food is beginning to fall, having reached a 45-year high in March 20231.
At 9.2%, though, it still remains much higher than it was just a few years ago2.
1Cost of living insights: Food – Office of National Statistics, 4th December 2023
2Food and Non-alocoholic Beverages, Office of National Statics, November 2023
Economising
8 in 10 Tesco customers say they’ve changed their behaviours as a result of rising costs.
Basket analysis shows them trading down to own-brand and switching to cheaper ingredients3.
3dunnhumby Shopper Thoughts, June 2023
Value
Ultimately, this makes for a more challenging environment for CPG brands.
As a result, many are using retail media to communicate the added value they bring to customers.
The connected store.
In a more competitive environment, innovative brands will increasingly use store media to build deeper connections with customers.
The connected store offers brands the opportunity to tell a cohesive story, one that speaks to customers at every point on their journey. They can inspire at the entrance, inform between the aisles, and influence near the shelf. And while every channel serves its own specific role, they are more powerful combined – enabling brands to reinforce their value across a varied creative canvas.
In an average supermarket today, thousands of products are on promotion at the same time. Shopping budgets are under pressure, and the popularity of own label continues to grow. “Sleep shopping” is commonplace. In short, competition is everywhere, and brands can’t rely on price alone to stand out.
That’s the promise of the connected store, a network of touchpoints that brings shopping to life through sight, sound, and taste. Whether it’s smart screens at the entrance, digital screens in-store, or scan-as-you-shop handsets, for customers it means more ways to explore and be inspired. For brands, it means more ways to create exciting experiences and meaningful relationships.
85% of Tesco shoppers make on-the-spot decisions about what to buy when shopping in-store4. 4Tesco media internal sales data 2023
Turn the trend to your advantage
In the 40 minutes that a Tesco customer typically spends on each visit, they’ll experience everything from Connected Display screens and experiential and sampling areas, through to in-store radio and ads delivered via Scan as you Shop devices. With every channel playing its own role, brands that identify their optimal mix will cut through the noise from brands competing on price alone.
Stores continue to be massively important to both customers and brands. Even with the recent growth of online a vast proportion of Tesco’s grocery sales still take place in-store, so its paramount that brands are connecting with customers where their mindset is aligned to purchase. The Connected Store provides a comprehensive range of media opportunities for brands to speak to customers and to deliver across a range of objectives, and is therefore unmissable for any truly connected, customer first media plan.
Connor Chappell
Media Strategy & Partnerships Manager,
Tesco Media & Insight Platform
Continuous commerce.
As the way people shop continues to evolve, retail media will power the continual conversations that brands need to have.
Shopping is changing, with customers mashing up missions and fitting in visits wherever they can. “Big shops” still happen, but so do midweek top-ups, on-the-go drop-ins, and deliveries direct to the door. In this world of continuous commerce, baskets are always being built, shoppers consciously and subconsciously deciding what they’ll add next.
This shifting behaviour creates a clear opportunity for brands. As well as engaging shoppers around promotions, events, and seasonal periods, they can continue the conversation in the spaces in between, too. Retail media gives brands the chance to be ever-present in customers’ lives, helping them be part of their thinking on a more consistent basis.
To make that a reality, advertisers will need the help of media partners with cookie-less solutions, helping them to influence in-market and high propensity shoppers across the year. Rather than relying solely on transient promotional periods, always-on retail media will help them stay front of mind all year long – with personalised, app-based product recommendations proving to be particularly effective.
advertisers will need the help of media partners with cookie-less solutions
Turn the trend to your advantage
“Always-on” doesn’t mean “unlimited budget”. Through data science, brands can generate powerful insights, helping them find their most relevant audiences and focus investments strategically. Even the smallest nudge can deliver big returns when it’s both well-placed and well-timed.
The ‘Always-on’ opportunity can be illustrated when observing a category with a relatively stable annual sales index like Pizza (fresh and frozen):
Over half of the year, in-store Pizza sales aren’t supported by Point-of-Sale campaigns5.
Circa 50% drop-off rate between first and second purchases from new to brand customers in the pizza category5.
5Tesco media internal sales data 2023
Continuous commerce isn't just about transactions, it's about seamless interactions across a customer's journey whether they are in-store or online. Brands are exploring more sophisticated targeting capabilities based on historical and predictive purchase behaviours across social, connected TV and the open web, stimulating continuous commerce and allowing brands to reach appropriate customers in a suitable context and need state. By applying this approach over the immediate and long-term, brands ensure they are influencing as many in-market and future customers as possible
Ciara Schmidt
Media Strategy and Partnerships Manager,
Tesco Media & Insight Platform
Blended shopping.
As shoppers move seamlessly between channels, the digital shelf has growing influence over in-store decisions.
The boundary between offline and online has never been thinner, with many customers now being blended shoppers – buying their groceries both in-store and through Tesco.com. This shift is about more than where the purchase ends, it’s about where inspiration begins. Our research suggests that for some categories, over a quarter of online users exposed to ads subsequently purchase in-store.
To date, many brands have primarily used digital retail media for driving online conversions. In 2024, brands will re-evaluate the role of online to enhance their Connected Store activations by building frequency to land more educational messages, priming shoppers before they set foot through the door.
In practice, this will mean more online messaging designed specifically with in-store decision making in mind to engage with shoppers as they research and mentally curate their baskets.
Turn the trend to your advantage
The “digital shelf” is now a natural extension of store media. What information can you give customers before a store trip to help them make a decision? How can you create a seamless connection between your online and in-store retail media initiatives, and reinforce your value proposition?
Re-appraising the role of online along the path to purchase is something every marketeer should be considering. Whether customers are researching for price comparison, checking availability or looking for inspiration, having an always on presence is crucial to the success of a blended shopping marketing strategy. Priming customers consistently not only creates strong mental availability for your brand, it reduces the heavy lifting required to prompt consideration of your brand at the moment of truth, in-store or online.
Emma Foley
Head of Planning,
Tesco Media & Insight Platform
Results beyond ROAS.
Full-funnel media needs full-funnel measurement. In 2024, brands will need to show proof of performance that goes beyond ROAS and include metrics like customer lifetime value.
There’s more to success than the sale. Increasingly marketers are excited about retail media’s role in driving return on advertising spend (ROAS), but they are also keen to know how it can support wider, more brand-focused objectives like awareness and consideration.
To answer that question, brands will take a fresh look at retail media measurement. The focus will be on holistic reporting, tracking long-term metrics like customer lifetime value alongside performance indicators like salience, consideration, and purchase intent. Incrementality will be key, too, providing advertisers with a true picture of campaign profitability.
Ultimately, this will mean that the success of a retail media campaign is no longer judged on ROAS or sales numbers alone. Instead, adaptive measurement frameworks will provide a wider and more balanced view of impact.
Turn the trend to your advantage
The key focus in 2024 will be on the standardisation of measurement. The Responsible Retail Media Framework created by ISBA and OMG will begin to gain traction, and media plans will start to show evidence of success across wider business outcomes. This growing sophistication will help to ensure that retail media succeeds as more than just a performance marketing channel.
The current fixation with retail media’s impact on sales ultimately serves to downplay its true potential. Conversion is of course an essential metric but at the same time, suggesting that the end purchase is the only thing that matters is to downplay the vital work that goes on across the rest of the marketing funnel. We all know that there’s much more to convincing someone to buy something than just giving them the final nudge.
Simon Lonsdale
Strategy Director,
Tesco Media & Insight Platform
Retail media teams.
New opportunities demand new approaches. As they look to maximise the potential of retail media, CPGs and media agencies will explore different ways of working, too.
What got us here won’t get us there. 2023 saw brand marketing teams and media agencies asking how to make the most out of retail media. 2024 will see them creating dedicated retail media teams, bringing shopper, trade, brand, agency, and performance expertise together.
Proof of that can already be found. WARC, for instance, has noted a trend towards the creation of retail media “Centres of Excellence”6. Bringing together a variety of marketing disciplines, these collaborative hubs pool knowledge and share resources – allowing for the creation of a truly integrated strategy.
What results are agile teams infused with a thorough understanding of different retail media dynamics. As “blended shopping” continues to grow, this will give marketing professionals confidence that they can keep pace with changing behaviours.
6 How retail media is disrupting marketing structures, WARC 2023
Turn the trend to your advantage
This isn’t about wholesale structural change; from our own research, we know few CPGs have plans to rip up their marketing org charts. What this is about, though, is efficiency. By putting the right people together, you’ll also distribute knowledge more effectively – ensuring that a range of different teams can use retail media to their advantage.
Over the last year, our most successful client partnerships have accelerated through ensuing the right business units are around the table to shape and deliver a singular retail media strategy. In addition to shopper we are also working with digital, media, brand and agency teams, ensuring Tesco Media & Insight Platform works harder to play a more efficient role in driving genuine business outcomes.
In 2024, clients will need to continue to evolve their structure and ways of working to maximise retail media’s opportunity, ensuring more cohesion across media channels and greater collaboration between key business units. Our role as Tesco Media & Insight Platform will be to continue to support these structural and cultural shifts to scale capability and expertise alongside delivering best-in-class execution and customer engagement.
Lee Roberts
Head of Sales,
Tesco Media & Insight Platform
We’re seeing structural and cultural changes across all industry sectors, driven by the explosion in retail media and the ‘intersection of disciplines’ required for success such as media, retail operations, merchandising and product content. In anticipation we created Publicis Commerce over five years ago, which now includes our Retail Media Centre of Excellence with pods closely aligned to our client teams in our award-winning agencies.
We’ve set up this way to work with evolving client structures, to drive better business outcomes through best-in-class delivery, and to help our retailer partners, such as Tesco Media & Insight Platform, bring their exciting new capabilities to our clients.
Steve Ricketts
Chief Commerce Officer,
Publicis Media UK
How to Shape What Britain Buys in 2024.
To win with retail media in the next 12 months, brands and their agency partners should:
1.
Treat the Connected Store as a creative canvas
Use a mix of touchpoints to land a story and reinforce product or brand benefits beyond price.
2.
Create a continuous conversation with shoppers
Engage and inspire beyond promotional and seasonal periods by using loyalty programme
data to add value to the customer journey.
3.
Treat the digital shelf as an extension of the physical shelf
Don’t forget the digital shelf, keep your products front-of-mind with blended shoppers.
4.
Focus on a wider set of metrics
ROAS in isolation isn’t a true indicator of success. Look to the metrics that can help you tell a cohesive story around brand and business outcomes.
5.
Set up for success
Bring multiple disciplines together in dedicated teams, which will help put the customer at the heart of media plans.
