Retail media: delivering precision at scale

With revenue expected to top $100bn in 2022, retail media is an increasingly popular vehicle for brands to connect with audiences. Nick Ashley, Managing Director of Tesco UK at Dunnhumby, discusses the benefits for advertisers and customers
Tesco Clubcard Plus

Beyond commercial growth, how has retail media developed in recent years?

The industry is evolving, not just growing. We’ve seen the launch of a number of new retail media networks and platforms, giving advertisers greater control and visibility over their activities.

There’s also market cohesiveness, moving from a collection of disjointed and disparate products to a more connected ecosystem where advertisers can consistently reach customers from sofa to store. Retail media now works across the marketing funnel, online and off. It’s a fundamentally smarter and more effective proposition.

What have been Tesco’s advances in this area?

In-store and digital are no longer separate strands but parts of a connected advertising environment

Over the past decade, Tesco has built a track record of innovation and successful supplier partnerships in retail media. Twelve months ago, we launched Tesco Media and Insight Platform, powered by Dunnhumby, which is the next step in the evolution of our offering.

It’s a suite of products across online and in-store media, as well as customer insights, helping brands improve engagement with Tesco customers for more personalised experiences. It also offers self-serve capabilities, which we know is increasingly important to brands and agencies.

Tesco’s weekly media reach rivals some of the biggest online platforms, and that’s combined with data and insights from over 20 million Clubcard holders. All of this allows brands to focus on customer groups that matter most to them while still being able to communicate at scale.

How can retail media successfully reach customers?
We offer effective mass broadcast media channels to drive awareness and consideration. Tesco Magazine is the most-read print publication in the UK, and Tesco has the largest out-of-home digital display network within the retail industry. Our recently launched partnership with ITV, allowing brands to reach Tesco customers on ITVX, is another innovative way for advertisers to deliver precision at scale.

Nuance is key, though. Retail media is at its best when viewed through a strategic lens, with different channels and tactics achieving different goals. If you want to communicate with millions of shoppers at once, you can, but you can also target an exclusive group of customers.

To deliver this precision, it’s hugely important to us that we look after all the data our customers choose to share with us. We only use data that customers have opted to share, and we want customers to be confident that all data is safe, secure, and used to offer a more relevant 
shopping experience.

How does it influence decision-making from sofa to store?

Retail media gives brands access to a diverse range of channels and activations. In store, for instance, you have traditional formats like printed point of sale, radio, magazines, and sampling, all of which can help to inspire customers when they’re making their minds up about what to buy.

Online, there are almost unlimited ways to engage. It’s possible to do everything from surface-relevant sponsored products in search results to providing personalised offers designed to provoke a specific response.

We have also struck several partnerships with other media brands, allowing advertisers to reach Tesco customers on other platforms such as Facebook and Google. This will enable richer formats like video to become a key component of a media plan.

In-store and digital are no longer separate strands but parts of a connected advertising environment.

What impact can this have on measurement and ROI?

Retail media helps brands understand why shoppers make decisions. First-party data from loyalty programmes like Tesco Clubcard enable actionable insights into customer behaviour, which is invaluable for brands because it gives a complete picture.

But the implications for ROI go far beyond measurement. Brands can target highly specific audiences based on the likelihood of them taking a certain action, so advertisers can be more sophisticated in their spending while demonstrating the impact of their activity.

Retail media typically deliver strong returns on investment. On average, we deliver a ROAS (Return on Ad Spend) of £6.60 for every pound spent across the Tesco platform, compared to an all-advertising return of £3.80, according to published research from Magic Numbers.

Will it make a person’s shopping trip easier, faster or cheaper? If not, think again

How can retail media advance brand visibility beyond end-of-funnel?

Retail media is purpose-built to help brands beyond the end of the funnel, and there are two things at play here: insights and activation. Data lets brands develop a deeper understanding of shoppers’ behaviours and then develop a range of ways to act on that information.

Say you have a group of customers showing the same tendencies as those who recently switched to a competitor’s products, or perhaps you have shoppers who spend a lot within a particular category but don’t buy your brand. Insight-driven retail media helps you spot this and plan your campaign accordingly. Naturally, this information both informs strategy and allows for it to be activated at scale.

Retail propositions, on-and-offline, are busy environments; how do you achieve cut-through?

The main thing is a brand’s ability to put customer needs first. Think about relevance, timeliness and how you can be most useful or helpful. Will it make a person’s shopping trip easier, faster or cheaper? If not, think again.

Another thing to consider is mindsets and missions, and how best to align with them. Seasonal and cultural events are a great example because they give brands clear opportunities to tap into what matters most for different groups of shoppers during those periods and own the moment.

How does Tesco work with brands to achieve a successful partnership?

Brands are hugely important to Tesco and its customers, so we work hard to ensure they get the best from our relationship; we believe our media offers a ‘win-win-win’ for customers, brands, and Tesco.

Firstly, in terms of measurement, we help advertisers close the marketing loop by making it very easy to track the impact of their activities. We link what people see to what they buy so that brands can understand the true incrementality of their media campaigns.

Secondly, from a reputational standpoint, Tesco is one of the most trusted brands in the UK. We offer a brand-safe environment in which to advertise via our online presence and physical store estate.

Then there is our focus on self-serve. We know that many brands and agencies want the control and flexibility that comes with being able to plan, manage and measure campaigns on their terms.

The value of loyalty

A successful retail media strategy empowers suppliers with insights that help them to get to know their most loyal customers and reach them via a range of media channels. “It helps us deliver on our strategic priority through I Love my Tesco Clubcard to better engage our customers and provide them a more personalised and responsive offer. We aim to use our unrivalled digital platform and customer base to create additional value and increase loyalty, making sure that the more customers use Tesco, the more useful it is to them,”  explains Tash Whitmey, membership and loyalty director at Tesco.

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