Retail Media at Biedronka and Pingo Doce 

For brands that are taking their first steps towards channelling their media investments into the retail sector, opportunities are starting to blossom. Marek Zlakowski and Francisco d’Almeida are responsible for the new Retail Media business area at Biedronka and Pingo Doce, respectively, and share with Feed the main challenges and opportunities behind the Group’s latest strategic decision. 

How can retail media help retailers better respond to the expectations of today’s consumers? 

Customers want personalisation. And that is difficult to achieve using traditional media or third-party data. With retail media, we benefit from first-party data, which no other player has access to. We register all transactions the customer did, the clickstream the customer was clicking in the app or on our ecommerce. We can work with data, create segments, and deliver something interesting for both customers and suppliers. We may offer suppliers access to customers segments that are more valuable for them, and they have no other way to reach. One of the staple examples is new commers to the category, however they could have little interest in supplier’s product. This is just an example that shows how important it is to balance customer needs; supplier needs and retailer needs. We should always bear in mind that, on top of personalization, consumers are also looking for the right product in the right time. Using purchasing patterns, we can fit the moment of offer display to purchasing cycle of the specific customer. Those optimisation makes retail media powerful tool both for retailer and supplier. Particularly on e-commerce, recommendation engines are looking at the similarities between consumer patterns and the products displayed. Retail media can significantly help in providing what the customer wants, while better incorporating supply and demand dynamics. At the same time, it can also provide better conversion rates than legacy media or other digital ad formats.  

How is Biedronka looking at retail media? What are the main initiatives being promoted within this scope?  

Biedronka is taking the first steps in creating is fully integrated retail media Network. With more than 3,500 stores spread across more than 1,000 locations, we are starting to connect the dots of our digital presence. Not only we are using consumer data to enhance the visibility of the products we sell in store, via promotional campaigns or in-store screen ads centrally managed for all stores, we have the Biedronka App, the strongest grocery app on the market with more than 10M downloads, and we also have a strong ecommerce presence. The Biedronka App is well known for targeted promotions based on consumer shopping patterns and allow our suppliers and business partners to reach customers in the moment they consider shopping. We are far from automations represented by pioneers of the retail media, big marketplaces, however we started from creation of business process that works while any investment in automation will be done only after rigid feasibility study. In an early stage, it is particularly important to meet market expectations, to know supplier expectations and customer reaction… After that, we can work on marketing automation, finetuning customer journeys, and within those journeys create the right touchpoints for the supplier to communicate. At Biedronka, we are on this process of recognizing marketing automation benefits, leveraging on our loyalty program and our network. Only on firm foundations created from business processes and company culture we can build retail media system that works both in Biedronka’s digital channels and brick-and-mortar stores. Biedronka must assure it will continue to be a very interesting place for marketeers to invest in.  

What do you believe will be the main differences between a food retail store today and in the next decade?  

I believe stores will be, in a lot of forms, still like what we have today. People will still demand the right place to shop and the right shopping experience in a physical store but enriched with a lot more technology. With customers valuing more and more their time and convenience I think that click and collect feature, with customers placing orders on the phones and then picking at a specific store zone, may finally become a standard in many store chains. Store chains will leverage AI to solve many pain-points, starting from tacking out-of-stock through security cameras, planograms execution. It is also clear that there is certain segment of customer for whom service provided by grocery ecommerce is answer to their needs. In Poland this segment is still relatively small, however its penetration of the market grows.  The demand that we register in our Q-Commerce branch BIEK is very interesting and for sure we will grow in this area as well.  

How can retail media help retailers better respond to the expectations of today’s consumers? 

Retail media is an opportunity for us, for our clients and for brands, but it must be analysed from the perspective of each country and according to the nature of each typology of retailer. From my point of view, there are four major elements to consider when looking at this issue.  

Firstly, the element of data and of sharing insights with suppliers. It is from this fundamental piece that we can derive a good part of the retail media opportunities. By sharing data and information with our suppliers, we can identify opportunities to activate specific customer segments (e.g. non buyers of a certain brand), prepare dedicated promotions via our mobile app, and rigorously measure the results and the impact of the campaign.  

Secondly, there’s the on-site part. This is where Amazon began exploring the retail media opportunity with digital communication formats in their e-commerce store, such as sponsored products, category banners or search keywords, for both awareness and conversion.  

There is also the in-store piece, which is particularly relevant for us, since the bulk of our business is done in stores. This is where we can activate video in our digital screens and our in-store radio.  

Finally, there is also the off-site piece, where we can cross-reference our consumption data with that of the media agencies to create specific customer audiences that can be then used to target in other platforms across the internet. We become audience coders based on real consumer data.  

As retailers we know that we work in a low-margin business, and we have the responsibility to keep prices low despite cost inflation. So, we need to leverage the opportunity to monetize our digital assets and the relationship with our consumers as this brings value also to customers and to brands. For the brands, they get access to a channel where they can communicate directly with their customers, much closer to the point of sale, and measure the impact of that communication, from the initial impression to the final purchase, typically rendering higher conversion rates when compared with other media. For customers, it’s also a benefit since they now have information and more opportunities that are typically very relevant to them. So, in the end this is truly a win-win-win opportunity. 

How is Pingo Doce looking at retail media? What are the main initiatives being promoted within this scope?

The Portuguese market is still in its early stages, as retailers, brands and media agencies are still preparing to reap the benefits of to this new opportunity.

The sharing of data with suppliers has created many opportunities for deploying coupons in our app, targeted at specific customer segments. Creating opportunities for brands to reach new groups of customers, or to deepen the relationship with existing customers becomes much more concrete and stimulating, and that’s an added value. We set up the service from wire to wick, identifying the audience, developing the campaign and the marketing materials, executing the campaign and then performing all the measurement and evaluation of the campaign’s performance. It’s low-hanging fruit that we’re managing to harvest. We are currently working directly with more than 40 suppliers to create and develop win-win campaigns, and the number is growing every week. We will probably end 2024 with more than 200 targeted coupon campaigns executed during the year.

In-store communication has also been an opportunity that we have been exploring in Pingo Doce. We have been exploring opportunities to use digital screens, which are a core part of our modern store layout, for brands to communicate with consumers directly in the point of sales. Likewise, we have been using our in-store radio to reinforce campaigns with brands that are relevant, for example communicating a specific wine brand when communicating the upcoming Wine Fair in Pingo Doce. Still in store, we have recently found another channel with very interesting conversion rates: ticket printers for service counters, such as meat and fish. By printing communication on the ticket related to in-store promotions on articles that are complementary to the offer on the service counter, there is a greater tendency for the consumer to take advantage of this opportunity.

All these forms of communication are already present in many Pingo Doce stores today and will be in more as we are continually investing in remodelling our stores.

We believe the future is bright for retail media. As more suppliers gain maturity and grasp the potential of this opportunity, we will continue to see a growing investment and the emergence of new solutions.

What do you believe will be the main differences between a food retail store today and in the next decade?

From a retail media point of view, I think what we’re going to see is a huge expansion of investment opportunities, on-site, in-store and off-site.

I believe that targeted communication channels (mobile app, mailings, sms) will also continue to grow as a very useful tool for brands. These channels allow brands to cut through the noise and talk directly with the customers that they seek. Powered by data to identify opportunities and measure the impact, these campaigns become a very interesting source of investment for brands with a clear ROAS (return on ad spend). The challenge for retailers is to be effective gate keepers, ensuring that customers are being impacted with only the most relevant opportunities, and not overloaded with numerous coupons or communications with low impact.

I also believe that in-store, we will see an emergence of many new solutions that will allow brands to stand-out while simultaneously creating a more fun and engaging experience for consumers in their shopping journey.  Today we talk about screens and apps, but we have already tested robots that can be implemented in our shelves that have motion sensors, and when a customer is standing in front of the shelf, robots highlight a product with projected lights and sound, so that consumers don’t miss out on a novelty or an interesting opportunity. It may seem like an extreme example, but new supports will most likely emerge, which will be invented to add more excitement to the in-store shopping journey.

And it is not only in retail media that technology is becoming prevalent. In future we will also see the impact of technology on the search for a better experience and maximum in-store efficiency. This is a people business, and will likely remain so, but it’s inevitable that greater complementarity will emerge between digital capabilities and the adaptation of in-store functions to better serve the customer. I am curious to see what the future brings.