Latest / Retail Media Breakfast Club / Breakdown of How Sam's Club Cracked the Code on In-Store Retail Media
Transcript
- Sam's Club Cracked the Code on In-Store Retail Media—Here's How They Did It === [00:00:00] Kiri Masters: Despite all the enthusiasm, most retail media networks are still stuck in pilot purgatory with in-store retail media. But Sam's Club has broken through after touring one of their clubs in [00:00:15] Murfreesboro, Tennessee with Harvey Ma, who is the head of Sam's Club. Member access platform. I saw something that seems pretty rare so far, which is a retailer that has actually figured this out. The numbers tell you why this [00:00:30] matters. One of e-marketer most recent research reports. Pushed the $1 billion in-store retail media milestone out to 2029, which is a full year later than they originally projected. [00:00:43] But Sands Club is scaling aggressively [00:00:45] targeting five x growth in large scale event activations next year. Today I'm gonna break down a much longer article that I wrote for the drum a couple of weeks ago. [00:00:57] If you wanna dig deeper, definitely check that full article [00:01:00] out for a complete tour of what they have activated on the ground already. Measurement specifics and Harvey's unfiltered take on what's working. [00:01:08] but today, Let's dive into this debrief. [00:01:10] [00:01:12] Kiri Masters: So, first of all, let's talk about why in-store [00:01:15] media gets stuck. ~A lot of it is around the infrastructure required and how difficult this is to set up. A lot of it comes down to the infrastructure required to make in-store media work. You need physical technology deployment across locations. That is the screens and the devices used to measure,~ [00:01:16] ~including computer vision, audio sys, uh, Inc. Include, uh. Oh my gosh. A big reason why. So first of, so first of all, why does in-store media get stuck? Well, ~a lot of it comes down to massive infrastructure investments required to make this all work. That includes physical tech deployment across locations, all of the screens that you need. [00:01:28] The infrastructure to run all of [00:01:30] those ads and do all the buying on the media buyer side, computer vision, audio systems. You also need that very tenuous thing that we've talked about on this show. Organizational alignment between merchants and media teams. How [00:01:45] is this media investment going to be factored into a JVP? [00:01:48] We will talk about that a little bit later on in the episode, how Sam's Club is doing that. And then finally you need measurement solutions that connect the in-store impressions and [00:02:00] dwell time back to actual sales performance. And the reality is most retailers simply can't clear those hurdles. It takes so much investment, not just from a capital expenditure standpoint, but organizationally to get people rowing [00:02:15] in the same direction on this and convinced of the benefit of doing so. [00:02:20] Sam's Club has been really early in building out this in-store capability and has coordinated a lot of their internal teams from the outset. [00:02:30] And so this really came through in my discussion with Harvey in the. Warehouse. He said something so simple, but it really has stuck with me, which is advertising exists to sell more things. [00:02:43] At the end of the day, we're not talking about [00:02:45] impressions. We're not talking about awareness, we're talking about actual sales. And I think that that just gets lost a lot of the time when we're getting caught up in all of the details of measurement and attribution. Um. Sales is what brands want to drive [00:03:00] at the end of the day. [00:03:00] So [00:03:01] Keeping everyone rowing in the same direction on that is certainly harder than it sounds. [00:03:07] So Sam's Club earlier this year unveiled a. Approach towards retail media called the [00:03:15] Retail Experience Network. And I'll admit personally, when I heard those words, I didn't know what it meant. I didn't know how much marketing speak that was, but here's what I learned from being on the ground. [00:03:27] Sam's Club doesn't treat marketing [00:03:30] activations as stunts. They orchestrate everything as part of a cohesive strategy that brings consumer brands along for the ride. So a couple of months ago I covered, Sam's Club [00:03:45] sponsorship of the IndyCar Grand Final in 2025, and that was a. [00:03:51] Collaborative sponsorship vehicle where Sam's Club brought along a number of CPG brands to co-sponsor a car and build [00:04:00] a event series around it, including, um, events in car lots throughout Sam's Club, warehouse locations. There were IndyCar simulators, there was a RV set up with, uh, Vizio [00:04:15] TVs. They actually sold a number of TV units while I was there, which is amazing and kind of goes back to the point that retail media exists to sell more things. [00:04:24] But also within the club, there are these experiences available. So obviously in a club [00:04:30] environment you expect sampling, but there's also, um, digital sampling stations. [00:04:35] And then beyond that, a few other important activations that I was shown the scan and go, um, application where a lot of. Young [00:04:45] consumers especially don't wanna wait in line. They don't wanna go through a traditional checkout if they can avoid it. So the scan goes really helpful. [00:04:52] Technology and ads can be shown within that experience. Part of making that all work is the exit arch, which, [00:05:00] uh, checks that you have checked out correctly, and that can also be enabled with personalized messages, welcoming new members to the club, for example. And then something that absolutely blew my mind. [00:05:11] And this might seem obvious to some people listening out there, but this is [00:05:15] brand new territory for me. The floor scrubber that, um, runs around and cleans the floors of the club has. Sensors on it that detect traffic patterns. How many people are in an aisle, what the dwell time [00:05:30] is looking for products that are out of stock on the shelf. [00:05:32] And that is a big part of enabling the measurement piece for Sam's Club to actually understand. Who's where in the club and how many people would've theoretically seen an ad or, you know, [00:05:45] passed by a display. So these are all, all These touch points feedback into Sam's Club's longitudinal measurement system. [00:05:53] And that's a big part of their value proposition is not just measuring if an ad impression [00:06:00] resulted in a sale later, but what is the lifetime value of that customer? And Because of the membership model of Sam's Club, they're able to do that over a pretty long period of time, [00:06:10] perhaps even multiple years [00:06:15] Shoppers don't think in silos. They bounce between online and in-store without skipping a beat. Acosta Group's. Connected Commerce agency helps brands unify trade and retail media [00:06:30] budgets to invest where shoppers are most likely to convert, whether that's on mobile or in the store aisle. Learn more about acoa Group Connected Commerce at ACOA Group and let them know Retail Media Breakfast [00:06:45] Club sent you. [00:06:45] That's A-C-O-S-T group. Another highlight from my time with Sam's Club was around how they think of the joint business planning or JBP [00:07:00] process. Traditionally, JBP conversations between a CPG brand and a retailer. And Once the brand secures shelf space, and uh, this is a concern and challenge that I hear from brands all [00:07:15] the time, is they, they go through the JBP, they negotiate, um, trade spend with a merchant. [00:07:22] Kiri Masters: Get everything done and secured. And then a retailer's, media team will come back to the brand and say, Hey, how are you gonna [00:07:30] put money behind all of this with ads? And the brand's like, well, I already just paid to get it on the shelf. Why? Why are you asking me for more money? Um, But [00:07:40] at Sam's Club, they've tried to think through what a more [00:07:45] cohesive conversation looks like, and the conversation goes more along the lines of, what do you want to do with this product once it's in the club? And it is a more coordinated discussion to help a brand bring their [00:08:00] objectives to life, rather than it being an upsell at the end of a JBP. [00:08:05] So those are just a few of the highlights that I shared in my longer form piece on the drum about Sam's Club and what they're doing with in-store retail media are. but I do, [00:08:15] for the purpose of this episode, I just wanna close with a reality check that is kind of sobering here. [00:08:22] While so many of our shopping journeys are completed in the store, there's still a [00:08:30] huge imbalance between in-store retail media, ad spend, and online media ad spend in the e-marketer projections, once they normalize Amazon out of the sort of denominator in this equation, because Amazon just [00:08:45] accounts for so much retail media spend. [00:08:47] Once they normalize for Amazon. They've accounted for only 3.3% of retail media ad spend happening in the store by 2029. So that is just such a small [00:09:00] piece of the total ad spend going into the store. I'm not here to pass judgment on whether that's right or wrong, just an observation. That it's very difficult to get right and that very few retailers have the physical [00:09:15] presence and the store network. [00:09:16] The appetite to take on such significant projects and the ability to execute over the long term that it means those retailers who can get it right can sort of [00:09:30] create a. Advantage, that's difficult to catch up with. And certainly if we talk about Amazon with very, very few stores relative to, category competitors, that could be a huge advantage and it can be a great way for brands to cut [00:09:45] through at the point of purchase and do something kind of unique. [00:09:49] Those are advantages that Sam's Club's definitely leaning into the scale, the membership model, the organizational alignment, the measurement infrastructure, they see it as a [00:10:00] slice worth fighting for. [00:10:02] And I think it is certainly a best practice model for other retailers to be watching. [00:10:06]