As retail media evolves, ad placements off-site and in-store will help grocery advertisers reach shoppers in new and more engaging ways, but consumers may not be in a spending mood as credit card balances grow and savings accounts shrink. If Amazon can get grocery right, it may be able to fight off losing share to Walmart. But if the Kroger-Albertsons merger goes through, it could change everything.
Retail media ad spend will be just shy of $60 billion next year, growing 28.6%, per our forecast. While the majority of spend (81.5%) will still be on-site, a growing amount of spend is moving off-site ($11.04 billion) and in-store ($370 million).
As advertisers seek more engaging ad formats, retail media networks will continue to expand into connected TV (CTV) and in-store media formats like radio or digital screens placed throughout the store. Some networks have already begun experimenting with these types of formats.
Consumers will also notice more shoppable ads from grocery brands, specifically on CTV and social platforms.
Amazon spent a great deal of 2023 trying to refine its grocery strategy, which we expect to continue into 2024.
If Amazon succeeds in this revamp, it could position itself better against grocery giant Walmart.
Despite inflation cooling, it’s unclear if consumers will spend more in 2024, or if they’ll buckle down even tighter.
Walmart CEO Doug McMillon said to CNBC that high credit card balances and shrinking bank accounts may have consumers spending less, which would further impact grocers’ bottom lines.
But a bright spot among the unknown may be private label items.
It’s been over a year since The Kroger Co. and Albertsons Companies announced plans to merge, but the Federal Trade Commission has yet to approve the deal. But, according to Kroger, it has met all the antitrust law requirements for the merger, per Supermarket News, which means the merger could be closer than ever to proceeding.
The combined company would also have an incredible amount of first-party customer data, which would be quite an incentive for advertisers who wanted to better target and measure their retail media campaigns.
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