How A Regional Grocer Is Taking Advantage Of The Retail Media Revolution

Dierbergs Markets, a regional grocery chain in the St. Louis area, was founded 170 years ago as a ride-up general store – as in, ride up on your horse.

These days, customers mostly get there by car, of course. But that’s not the only change Dierbergs has experienced. There’s electricity now – oh, and the internet, not to mention consumer habits.

The past decade has been a tumultuous period for regional and independent grocery chains, and Dierbergs has adapted.

In 2017, Dierbergs added a partnership with Shipt, a retailer fulfillment service that was acquired later that year by Target. The retailer now also works with DoorDash to list products for online sales and home deliveries.

But adopting modern tools is a big shift for a grocer whose goal is to remain a grocer – not become a technology company.

Dierbergs has followed consumer trends over the years, but “we aren’t organizationally structured to lock in and focus on tech development,” Jamie Collins, the company’s VP of marketing, told AdExchanger.

The grocery lane

Still, there are tech- and data-driven aspects of shopping nowadays that feel like table stakes from the consumer perspective, Collins said – like delivery and pickup options, in-app searches and personalized deals.

The likes of Walmart and Target have mountains of consumer data at their fingertips, she said. And so, for them, it makes sense to hire engineering teams or drop $550 million to acquire a service like Shipt.

But Dierbergs can’t effectively take advantage of retail media and its own supply of first-party data without external partners.

One way the chain capitalizes on the retail media and first-party data revolution is through a partnership with retail ad tech vendor Swiftly.


AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

The vendor opp

Dierbergs began working with Swiftly as an ad tech and mobile app vendor prior to 2020, so it wasn’t a COVID-related response to ecommerce trends.

And the purpose of their relationship goes beyond generating a little extra incremental revenue from ad sales.

An independent grocer like Dierbergs is less focused on CPMs than it is on creating connections with shoppers and increasing the frequency of their visits, said CEO Greg Dierberg.

The Dierbergs app, for instance, which is now backed by Swiftly’s tech as well, was originally a sales driver for catering and prepared foods, not for everyday grocery shoppers or general customers.

Today, the app is particularly useful for identifying different customer segments, such as vegan, gluten-free or some other classification that affects what products are suggested on the app or site.

It’s not that Dierbergs isn’t interested in ad revenue, but the real gains come from shoppers who convert to regulars or become loyalty program members. Dierbergs has a new rewards program, which launched in 2022, that is now also connected to its app.

Bridging the app

But Dierberg (the person, not the store) was also quick to acknowledge that, as a regional chain, there’s value in working with a vendor that is itself committed to the retail long tail.

Launching a fledgling off-site and on-site media program is only a worthwhile business if it’s one part of a much larger whole, he said.

Swiftly’s media network also includes national advertisers, meaning it might work with, say, Pepsi’s branding and ecommerce business to reach people across grocery chains. In other cases, Dierbergs might work directly with Pepsi on trade marketing, such as a special in-store installation or local promotional campaigns.

Dierbergs is evolving to create more real-time and data-driven in-store opportunities. For example, print labels on shelves are now digital so that products and deals can be changed or presented to shoppers on the fly. Other signage around the store is also being digitized, Collins said.

It’s important for a grocer to operate an app and to bridge the experience between the app and in-store shopping, she said. But its primary goal is to remain focused on the customer experience, rather than operating retail media solely for the purpose of collecting ad revenue.

“We’re not wired to sell advertising,” Collins said. “We’re a grocery store.”

Source link