Media Forum: Is retail media struggling?

James Curtis asks whether initiatives such as in-store TV will live up to the hype.

The relentless penetration of Britain's biggest supermarkets into consumer spending has prompted many observers to predict that retailers will become powerful media owners. With 27 per cent of British shoppers passing through its stores, Tesco in particular had bullishly positioned itself as a media channel in its own right, launching an in-store TV network, Tesco TV, and hiring JCDecaux to sell airtime to third-party advertisers.

However, the news that Tesco is transferring this sales contract for Tesco TV to its below-the-line agency, Dunn-Humby, which handles its Clubcard loyalty programme, shows a scaling back of Tesco TV's ambition. Airtime will now be sold to brands with an in-store presence, and integrated into the promotional mix. Customer data will be used to target the ads and co-ordinate them with other in-store activity.

This doesn't mean Tesco TV is dead, but it does show that the retail giant over-estimated its external media influence and its ability to "sell" its shoppers as a media audience.

This is the latest in a series of warning signals. Last year, Tesco abandoned plans to extend the TV network from 100 to 200 stores and, in April, Sainsbury's cancelled its own plans for a TV proposition following a trial.

All of which prompts the question of whether retail media is the buzz area many had predicted, or has an over-inflated sense of its own worth.

Steve Tindall, the managing partner at MindShare, says TV should be considered "a small part of the inventory" in the retail media environment, and that "as a channel, it's not in trouble". He says: "All that has happened here is that Tesco got it wrong. It was wrong to call it TV in the first place, the siting was wrong, it went about selling it incorrectly and it didn't understand what it contributed to the marketing mix."

However, Tindall believes the raw power of the Tesco brand makes it an impossible media channel to ignore. "As a brand, Tesco is more powerful and trusted than most of the brands it sells, so its endorsement will engender trust for other brands," he says. Extending this beyond Tesco into the wider retail scene, Tindall is confident brands will continue to invest. "Clients need a complete through-the-line communications solution, of which a lot will come in the retail environment," he adds.

However, not all media pundits agree that Tesco TV's problems are an isolated case of poor execution in an otherwise thriving environment. Sophia Jamsheer, the group head for outdoor, radio and cinema at Starcom, says retail media "is struggling and has been for some time". She argues that the exposure promised by retail doesn't always translate into engagement, and that it lags behind other areas of outdoor in terms of innovation.

"Retail is an important environment for a wide range of advertisers, but are opportunities and platforms engaging enough?" she asks.

"Do they offer excellent value? Not necessarily. Media owners and retail partners must recognise the dynamics of the retail environment versus other areas of outdoor. Retail and point- of-sale media are struggling because people don't realise they need totally different rules of engagement, planning and measurement."

James Davies, the board director at Posterscope, argues it's wrong to say the Tesco TV experience is symptomatic of a retail media malaise. "It's an interesting case study in how not to do things, but it's not indicative of the rest of the market. Above-the-line demand for Tesco TV wasn't as it hoped, but that hasn't transferred to other retailers. The problem here is that we shouldn't think of digital initiatives such as this as TV. We should think of it as out-of-home digital media, or a digital poster. Digital screens in the retail environment are not a problem - it's thinking of them as TV that's the problem."

Dominic Margetson, the commercial planning director for the through-the-line agency Inferno, and a former head of events for Asda, concludes that much of the problem stems from the fact that in-store media is expected to do a different job from outdoor and is bought by different people. "The people who buy it are under a lot of pressure and are desperate for short-term tactical sales increases," he says. "It's rarely the brand managers who control the purse-strings in this area, more often the channel guys or the national account managers. They're after a more pragmatic, directly sales-driven approach."

NO - Steve Tindall, managing partner, MindShare

"Tim Mason (the former Tesco marketing director) said there will come a time when FMCG clients will ask why retail is not on the plan. Clients now expect communications companies to have at least considered retail media."

YES - Sophia Jamsheer, group head for outdoor, radio and cinema, Starcom

"From the troubles encountered by Tesco TV it is evident retail's appeal as a media channel is not as expected. Moving forward, the question is: what can be done to create engagement?"

NO - James Davies, board director, Posterscope

"Clients realise the value of being close to the point of sale. That's where 70 per cent of purchase decisions are made. The basic premise of retail media is to cut the time between seeing an ad and reaching the supermarket shelf."

NO - Dominic Margetson, commercial planning director, Inferno

"The results from in-store TV don't mean retail media is struggling - all the other retail media techniques, such as as sampling, radio, magazines and shelf 'barkers', are thriving."

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