Walgreens Advertising Group looks to the future of retail media

Everyone is talking about retail media. Brands seem ready and willing to spend retail media dollars with their partners, but as the category proliferates and accelerates, it’s creating a totally new industry within the digital media ecosystem.

And with that brings more scrutiny on the technology that powers these networks—and (surprise) not all are created equal. As brands decide where and how to spend their budgets, they’re looking for retail media networks that have put their customer at the center, surrounded by technology that offers the reach, data access and ease of use they need.

To explore how tech is changing retail media, we sat down with Luke Kigel, VP of Walgreens Media and head of Walgreens Advertising Group (WAG), to tease upcoming innovations for WAG, all intended to help brands achieve better media reach and activation in a safe, secure, privacy-compliant environment.

Through the conversation, learn how the industry can better orient around the needs of the consumer—not budget dollars—and how retail media will be a change agent in shifting the shopper marketer/retailer dynamic. 

Joe Doran: WAG is gearing up for its latest big technology rollout. What benefits will these bring and how are they unique?

Luke Kigel: One of the principal tenets of Walgreens Advertising Group is that we aspire to make it easy to work with us. I respect that it’s easier said than done, and with that comes the issue that many brands see retail media today as just another walled garden. We don’t want (or need) more walled gardens.

We’re trying to build solutions that make it easier for our brand and agency partners to work and engage with us, so the focus can be on enabling brands to deliver personalization and drive performance. We’re partnering with Epsilon and other key players in the space to give brands access to use our audiences in the regular flow of their media operations, with their hands on the keyboards.

These shifts take into account that brands are doubling down on first-party data themselves. Our goal is to take the strength and power of our customer relationships and marry it to the information brands now have, allowing them to accelerate their strength and capability. WAG has access to insights from more than 95 million customers—people who are myWalgreens members, all updated at scale in November 2020—which presents a tremendous opportunity for brands to tap into. 

We’re seeing a lot of retailers making more investments on the technology side of their media networks. What do you think is the reason for this shift?

The industry is hungry for diversification, and with the changing privacy landscape, the industry is ripe for disruption. Retail media has a strong role to play in that disruption. In some ways, you have to look no further than the most recent iteration of LUMA Partners’ Digital Display LUMAscape to visualize the industry at scale and put this dynamic into perspective.   

We believe that competition is good, and that diversification ultimately serves the industry and our customers. This is an industry where the “frenemy” dynamic is very real and fairly ubiquitous. When thinking about what disruption retail media can be a part of, it changes the role of the retailer in that dynamic. The retailer starts to become a strategic media partner, an agency partner, a publisher partner, and a driver of personalization and media ROI. That’s a pretty massive difference from the industry view of retail just a few years ago. 

Where do you see retail media headed? It’s a huge growth category for many retailers; a lot has shifted in a short amount of time, and we only expect to see more change.  

Retail media is very well-positioned to be a core disruptor in how we market to any customer, anywhere. Today, people think about retail media as an extension of shopper marketing, so it’s shopper budgets, ecommerce budgets, etc., and doesn’t include your national media budget or dollars. These constructs are borne out of job functions and where buckets of dollars live, not out of a strategic need or even a desire to meet consumer needs—it’s just a function of the industry.

So, what retail media actually represents is the opportunity to transcend this narrative and better connect with consumers. When it comes down to it, the consumer is a person, a person is a shopper, and when that shopper sees an ad, they don’t think “Oh, this is shopper marketing,” or “This is national marketing.” These are meaningless terms to the consumer.

Retail media has the opportunity to completely change the model and go from being a tool of shopper marketing to a core part of the flywheel for more personalized and more effective marketing. If marketing delivers a better experience to your consumer, it ultimately delivers a better return on your investment—and that has nothing to do with your shopper or national dollars.

Where do you see the industry, holistically, setting its sights?

There’s a growing attention being placed on offsite capabilities from legacy retail media businesses that have been around for more than a decade. You’ve got the consultants and industry experts saying that the category can be a hundred billion dollars. Many of them started with onsite capabilities, and now as they look to expand and grow, offsite is the next frontier.

What’s interesting is that we came about entering the category a little bit differently, by starting with offsite media, which is the exact opposite place of where those legacy retail media players started, but it’s now the primary target on their roadmaps.

We really started with a strength in executing offsite media and built our network from that as the foundation, allowing brands to have the same end-to-end audience insights all the way through activation. It’s funny because as an industry, we all have the same goal: We’re all building towards that holistic experience for our brand partners and the customer—we’re just coming at it from slightly different starting points.

Any final thoughts to leave us with?

As we move forward into our second year with WAG, we’ve built a media group focused on innovative thinking, delivering engaging and relevant experiences while ultimately striving to make things easier for the brands—and consumers—we serve.

This article was originally published on Adweek, February 2022.