Schnuck Markets places a particularly high priority on personalization techniques, and the regional grocer is leaning into that strategy as it strives to expand its presence in the fast-growing retail media arena, where larger rivals have largely set the pace.
Last month, Schnucks rolled out the ability for CPGs to directly reach the grocer’s shoppers through social media and other third-party digital platforms, known as offline media, according to Jenn Freeman, Schnucks’ vice president of marketing. Schnucks also lets brands promote products to its customers through the company’s own online tools, including its website and app.
The St. Louis-based supermarket chain’s goal with the new service is to position its deep connections with local shoppers as a competitive advantage in bringing CPGs on as advertisers, Freeman said in an interview. Working with Bridg, a data and audience platform, the grocer developed a list of about 6 million shoppers who are engaged with its brand, she said.
“This helps us be more competitive in our marketplace versus the Walmarts of the world,” Freeman said. “Retail media has been out there for quite a while, and we are realizing that we need to be in the game.”
Schnucks’ first customer for the offline marketing program was Danone North America unit International Delight, which engaged the chain to promote a cold foam coffee creamer launched last December — the first time Schnucks worked with a CPG on that type of project to drive awareness of a product with its shoppers, according to Freeman.
“We have to play in that market not only just to drive our revenue. It helps us build our relationships with our vendors and our shoppers, so it was a logical next step for Schnucks,” Freeman said. “We’ve built our rewards program, we've built this muscle with our customer data platform and all of our journeys, and now we're able to go out and help our CPG vendors grow their businesses.”
Giving smaller grocers a bigger role in retail media
Schnucks developed its offline retail media capabilities with help from Digits, a marketing agency it has worked with since launching its rewards program in 2018. Digits also works with grocery retailers including Heinen’s and Fareway Stores.
Digits CEO David Glaza said smaller grocery chains like Schnucks, which has 115 stores in four Midwestern states, have faced challenges in attracting CPGs to their retail media programs because they have taken longer than larger retailers to develop those capabilities.
“Many CPGs are investing heavily with … bigger national retail media agencies and sending co-branded advertisements out to shoppers who might actually be a loyal favorite shopper of a regional like Schnucks or a Meijer or a Giant,” said Glaza, who helped launch Target’s Circle rewards program before founding Digits.
Glaza said another factor that has held regional grocers back in the retail media space is that CPGs themselves are only now beginning to explore the kinds of capabilities Schnucks has started to offer.
“The challenge is just hitting the radar of the CPGs,” Glaza said. “If you’re a smaller grocer, yes, the national brands sell to you, but retail media is still new to a lot of these national brands and so the processes, the budgets, the line items, those all haven’t necessarily trickled down to your lower-ranked retailers as far as sales velocity.”
Freeman said that in addition to ramping up its ability to connect CPGs digitally with shoppers, it also wants to give retail media a bigger presence in its physical stores.
As part of that effort, Schnucks is looking into whether smart carts provided by Instacart-owned Caper Cart could be an effective way to deliver targeted messages to people as they walk the aisles, according to Freeman. The retailer agreed last summer to work with Instacart to test Caper Carts as part of the grocery technology company’s Connected Stores initiative.
Schnucks also sees electronic shelf labels, or ESLs, as a potential way to transmit customized information to shoppers in its stores, according to Freeman, noting that the company has installed ESLs in most of its stores. Schnucks sourced the equipment from Aperion, a unit of refrigeration company Hussmann, according to the grocer.
Freeman said Schnucks is looking into using ELSs to transmit targeted messages to shoppers as they peruse its stores, adding that she sees the technology as an “opportunity to talk to our customers in different ways than we ever have before.”
ESLs are “a great tool for us going forward in terms of pricing, and margin optimization. It also could be a great retail media tool, but we're not there yet,” said Freeman.