How co-ops can tap into retail media’s transformative potential

Retail media’s stratospheric ascent continues. In Europe alone, spending on retail media grew by 22% in 2023, compared to just 6% within the wider advertising market as a whole. What’s more, 52% of buyers say they’re now shifting their budgets from linear TV towards retail media, just one of many reasons that the European market is expected to be worth some €31 billion by the time that 2028 rolls around¹.

With numbers like those in mind, it’s little wonder that so many retailers want in on the action. More than 230 retail media "networks" have now been established around the world², each one providing brand advertisers with a range of ways to reach shoppers at or near to the point of sale. As a result, retailers that haven’t yet made that leap are fast becoming the exception.

Not all retailers are alike, of course. Traditional, centralised operational models may be common, but they’re far from the only approach. Western Europe in particular has a diverse retail ecosystem, one in which co-operatives continue to thrive. And, for these organisations— which tend not to standardise things in the same way that centralised retailers do—creating a scalable retail media business can be that little bit more difficult.

In this article, I’d like to explore the subject of retail media for co-operatives, and some of the key considerations they need to work through when building a media business of their own.

Co-operatives and owner-operators: the power of the collective

Co-ops are common across many European markets. They’re often extremely successful, too. Coop Denmark enjoys a market share of around 30%³, for instance, while Edeka’s 25% market share makes it Germany’s largest grocery retailer⁴.

Co-ops are often built on a culture of customer-centricity, with many operating consumer-owned membership models. That’s important from a retail media perspective, because it provides a perfect foundation for a scalable business. As explained here, putting the customer first typically creates a flywheel effect that helps to maximise the revenue opportunity from retail media.

The nature of a co-operative also makes for substantial variation in terms of operating models. While some retailers may be centralised in their approach, others may choose to leave decisions down to individual stores. That creates additional challenges from a media perspective, because it can make participation much harder to guarantee across the store network. Participation is critical for a media programme to work, however.

Brands are typically looking for three things when it comes to a retail media network: scale, compliance, and measurability. They need to be able to activate cost-effectively and at scale. They need the reassurance that media is being displayed correctly. And they need to know what impact a media campaign had on their goals. Without buy-in across the entire store network, though, it can be hard to guarantee any of those things.

Because of that, co-ops usually need a proactive engagement strategy when planning out a media business. And, in our own experience, that means focusing on five specific things:

1. Ensuring that a positive customer experience remains the #1 priority
   Ultimately, retail media works best when it’s additive to the customer experience. As well as delivering some kind of benefit, it needs to be easy to understand as well. That can mean templating creative so that there’s a consistent look and feel between stores—one that customers can quickly identify and process. Templating can also make things easier and more efficient for advertisers, too.
2. Gather the support required to make it a success
   Winning hearts and minds is essential if you want independent stores to engage with retail media. Bringing the proposition to life though roadshows can help with that, as can in-store mock-ups and virtual stores. A test and learn programme can also be used, ensuring that a media programme can be thoroughly trialled and give all stakeholders confidence before it’s rolled out far and wide.
3. Incentivise store owners and regional committees

   Customers might be the primary focus, but owner-operators need a good reason to engage with a retail media initiative too. That could take the form of a “shadow P&L”, which helps to demonstrate the value of the initiative to their store (and the co-op as a whole). Waiving membership fees in return for participation can also help to encourage buy-in.

4. Create a compliance-friendly operating model

   Buy-in is one thing, compliance another. To ensure stores are sticking to the plan, it can help to set up a separate media team, one with responsibility for managing in-store execution. As well as freeing up store colleagues to focus on their core responsibilities to customers, this also provides the resource to develop store-specific comms plans. That will help to increase visibility and allow any issues to be flagged in advance.

5. Create a common view of campaign activations

   Most retail media networks use dedicated campaign booking and planning technologies. For co-ops, a single tool can help to ensure consistency when managing national and regional campaigns, providing a common view across both the store network and organisation as a whole.

How to get started

While co-ops may face specific considerations when it comes to retail media, many of the factors that apply to centralised retailers are equally relevant too. That’s particularly true when it comes to getting started, where a few key things to bear in mind include:

• The need to secure support from the top. Retail media is an inherently cross-functional pursuit, one that needs executive sponsorship to ensure engagement across the business. That’s even more important for co-ops, which are naturally more fragmented. Executive buy-in isn’t the only factor here, though—store owners and regional assemblies will also need to be on board.
• A clear value proposition to advertisers. The retail media opportunity is gigantic, but advertisers now have an abundance of choice, too. Communicating in clear terms why they should invest in your platform (as well as others) is critical.
• The need to keep things simple. Building on the above, it needs to be easy for brands to buy into your platform—literally. A common proposition that allows them to buy easily and consistently across different retailers and stores is key.
• The effort required. Data, technology, resources, and processes all require time and attention, as well as what can be a significant shift in culture. Don’t underestimate the amount of effort needed to get a programme up and running.

1 The Retail Media Revolution: 2024 State of Play and Outlook in Europe – IAB Europe, 3rd October
2 List of Retail Media Networks – Mimbi, September 2024
3 Market share of selected grocery retailers in Denmark in 2022 - Statista
4 Market share of the leading companies in food retail in Germany from 2009 to 2023 - Statista