Social Mixer 2024 Singapore
marketing interactive Content360 Singapore 2024 Content360 Singapore 2024
The advantage traditional supermarkets have as they turn their focus on ad dollars

The advantage traditional supermarkets have as they turn their focus on ad dollars

share on

In a rather interesting move, last month American grocery store Walmart announced its acquisition of advertising startup Polymorph Labs to complement the advertising arm that has been building over the past few years, Walmart Media Group. Hot on the heels of that is Amazon, which has just acquired Sizmek Ad Server and Sizmek Dynamic Creative Optimization. In a media statement, the company said the adtech company and Amazon Advertising shared many mutual customers.Walmart first started growing its advertising team as early as 2005 and but its ambitions to become an major advertising platform has become evident in recent years. In February this year, it broke off with WPP's Triad to move website ad sales and analytics work in-house, according to various media reports.While traditional supermarkets may have gotten a later start against tech/delivery platforms that have commandeered digital advertising dollars for ages, today they are making strides to stay ahead of the game. Speaking to Marketing, planning director of Geometry Singapore Ritika Verma said the advantage that traditional supermarkets have over companies such as Google and Facebook is the purchasing habits data that they can ascertain.“What are shoppers looking for? What is motivating them to buy? What are the barriers stopping them from finding or even buying products? What were their previous purchases? By analysing all these different data points, we can build profiles of these individuals, and tailor and personalise communications and solutions to influence them,” she explained.According to Verma, supermarkets are able to meet brands’ desire to attract and engage with audiences at different stages of their purchase decision journeys in the most targeted and relevant manner. She added,Supermarkets have had the data on their customers for years, even before the big buzz around 'data' began.The only problem is that while data sets from loyalty cards, credit cards, point-of-sale systems, and scanned purchases have always been in existence, they have been kept in silos. However, with new and improved technologies now, Verma foresees more supermarkets integrating data and leveraging it to offer personalised experiences in the next wave of shopping.[Join us at Customer Experience 2019 as we discover the experience innovations of tomorrow, break down business silos, and learn about prioritising data security for the most important person in the room – the customer. Sign up now!]Motivations for the moveCommenting on the trend, HappyMarketer managing partner Prantik Mazumdar said supermarkets are driven into the advertising space by thinning retail margins. By offering friction-less shopping experiences and adding new revenue streams such as advertising and data partnership services, supermarkets are seeking to make higher margins by increasing customer lifetime value through reduced customer acquisition costs and a stronger focus on serving the loyal customer base.“With eCommerce now being a norm for traditional supermarkets, these players can now monetise enriched data through more personalised bundled offerings and loyalty or subscription programmes. Or, they can offer data-driven advertising services, similar to those by Amazon and Lazada, to other brands who want to reach out to segmented audiences in the supermarket's dataset,” Mazumdar said.He however warned that in small markets such as Singapore, it is difficult for non-subsidised marketplaces to scale and survive. They will have to scale up regionally through acquisitions akin to what have been taking place in  industries such as telcos where the likes of Singtel (which started in Singapore), eventually grew to be a large regional telecommunications player through mergers and acquisitions.Additionally, he said the recent moves by Walmart also signals different attempts to capture purchase behaviour and insights through omnichannel retail."Highly capitalised online marketplaces such as Amazon are making their presence felt either through complementary physical outlets, acquisitions of niche, hyperlocal eCommerce players, or the provision of ancillary services such as advertising services. On the other hand, large chains such as Walmart that has captured market share offline are now innovating and scaling up their digital presence through eCommerce directly or through partnerships," he explained.Focus on CX firstAs supermarkets build great product fulfillment experiences using proprietary technology and first-party customer data, Singapore CEO of IPG Mediabrands David Haddad agrees that it is a “natural extension” for them to offer advertising solutions through the same means. However, it should not happen at the expense of their core business model. He added,I believe that local supermarkets should focus on perfecting their customer experience, in-store and online.Before thinking about changing business models or offering new services or products, Haddad encouraged the introduction of more technologies into the traditional store environment in the forms of self-checkout and cashless stores, for example.“Local supermarkets have built their business on a brick-and-mortar model and providing an in-person experience for its customers. It’s only recently they are moving into online as another fulfillment of their product, though the main experience itself remains in-stores,” said Haddad. While some supermarkets are moving online quicker than others in Singapore, he noted that the majority of their business and revenue still comes from the physical stores. Moving online is definitely the right thing to do, said Haddad, but it should not happen before the companies are ready.[Join us at Customer Experience 2019 as we discover the experience innovations of tomorrow, break down business silos, and learn about prioritising data security for the most important person in the room – the customer. Sign up now!]

share on

Follow us on our Telegram channel for the latest updates in the marketing and advertising scene.
Follow

Free newsletter

Get the daily lowdown on Asia's top marketing stories.

We break down the big and messy topics of the day so you're updated on the most important developments in Asia's marketing development – for free.

subscribe now open in new window