Jonathan Lustig, head of revenue, Walgreens Advertising Group, and Ryan Mayward, senior vice president, retail media sales, Walmart Connect, speak with Andrew Lipsman, former principal analyst at Insider Intelligence, at NRF 2024: Retail's Big Show.
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Physical stores are no longer just a place to pick up products like household goods and health and beauty supplies. They’re the next frontier for advertisers and retailers to connect, inform and entertain customers in a meaningful way.
“Physical stores are the next major media channel,” Andrew Lipsman, former principal analyst at Insider Intelligence, said during a panel session at NRF 2024: Retail’s Big Show, where he predicted that in-store advertising will surpass television advertising in terms of influence and impact.
“I think that physical retail is the new TV, because it provides so much of what linear TV can no longer provide, which is scale, brand safety and reaching the right audiences.”
Retailers as the fastest-growing advertising channel
So far in 2024, retail media advertising revenue is running neck-and-neck with television advertising, Lipsman said, with both currently around $60 billion. It will surpass television by next year and is on its way to reaching $100 billion in revenue in the United States by 2027.
It’s not surprising that many major retailers — including Walgreens and Walmart — have decided to launch their own retail media networks. In the case of Walmart Connect, the retailer offers advertisers an opportunity to reach Walmart shoppers online in the app and across its bricks-and-mortar locations through a variety of touchpoints, including on televisions in the electronics sections, through Walmart Radio pumped throughout the store, and through ads on self-checkout screens.
“It’s a channel with broadcast-level scale,” said Ryan Mayward, senior vice president, retail media sales, Walmart Connect.
With more than 140 million customers a week shopping in Walmart stores, the impact and audience are actually bigger than any broadcast TV channel can deliver. “The store as an advertising channel is as relevant to the shopper marketer as it is to the chief marketer,” Mayward said.
That means a major opportunity for retailers and advertisers alike, Lipsman agreed, noting that unduplicated audiences over the course of a month are much higher than the four broadcast networks combined. RMNs are “increasingly filling the role that TV is leaving behind,” he said.
Reaching customers at every touchpoint
Walgreens has more than 9,000 stores across the U.S. and has a high trust factor with customers through its pharmacies, making partnering with the health care company particularly attractive to advertisers.
Even though ecommerce — and the associated advertising opportunities — are not a major part of the company, “the footprint of our physical assets has become incredibly valuable,” said Jonathan Lustig, head of revenue, Walgreens Advertising Group.
Another major advantage is Walgreen’s loyalty program, myWalgreens, which enables the retailer to collect first-party, purchase-driven data from approximately 100 million loyalty members.
It all adds up to a golden age for retail media networks, Lipsman contended. “This is the time for omnichannel RMNs to shine. They have the foundation of first party data — a lot of it from in-store transactions — and the physical store assets,” he said. “That’s what’s going to power them into the future.”
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