25 Mar Woolworths Media joins the party
15 years ago in the US a Wal Mart executive realised the store was as much a retailer as a media owner. The millions of customers passing through their doors every day were sizeable enough to rival any traditional media owner’s audiences and crucially, they were coming to buy.
More significantly, they realised they were giving away this customer attention and billions of dollars in media value to suppliers. That insight was sufficient to persuade Wal Mart leaders to become media owners in their own right and they’ve been generating vast incremental revenues ever since.
It didn’t take long for other household US retailers to follow suit, Sears, Staples, CVS Pharmacy, Target, Kohls, Bed Bath & Beyond, eBay, Saks 5th Avenue are just a handful of retailers who openly position themselves as a media owner and conduit for suppliers to drive growth in their physical and digital stores.
So Australian supermarket Woolworths’ announcement this week that they are to create a media business, called Cartology, fusing their own customer data with their vast media ecosystem is a huge step forward in the owned media landscape but a familiar story on a global scale. UK supermarket Tesco recently in-housed their media and have seen significant growth for their suppliers through maximising owned channels.
Leveraging media is lucrative but ultimately complex. Marrying supplier demands, with those of the marketing dept, the merchandise dept, the finance dept, whilst delivering a seamless experience to customers, is no mean feat. Woolworths will have their hands full trying to keep everyone happy but ultimately their shopper data will deliver suppliers targeted, relevant communication solutions which will deliver ROI to dwarf investments in paid media channels.
Media leverage is a non-core competency which makes sense to either outsource or build a specialised in-house department. Smart supermarkets and retailers are paving the way for a new breed of effective media solution providers and it won’t be long before others follow suit.