Ahold Delhaize, the owner of supermarket chains including Stop & Shop and Albert Heijn, plans to boost its revenues beyond grocery stores to €1bn by 2025 through advertising revenue and consuming data monetisation insights. Grocers like Ahold Delhaize are working to improve the quality of data insights they can sell to consumer goods companies, which in turn use it to target shoppers with ads for their products. The data is encrypted and aggregated so it cannot be traced back to individual buyers. By using ad revenue, Muller said the company plans to keep food prices low as inflation persists in Europe and the US.
Retailers are in fierce competition with both Amazon and Walmart regarding retail media, as Amazon reported $11.6bn in revenue from its advertising business in Q4 2020, while Walmart expanded its Walmart Connection internal advertising business after cutting ties with an external advertising partner in 2019.
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NEW YORK, June 12 (Reuters) – Ahold Delhaize has hit “about half” of its goal of boosting revenues of businesses beyond grocery stores to 1 billion euros by 2025, CEO Frans Muller told Reuters. an effort focused on selling ads on its supermarket websites and consumer data monetization insights.
Grocers like Ahold Delhaize (AD.AS) are building initiatives that sell online advertising to consumer goods companies, including allowing their brands to appear first in shopper searches or appear as “sponsored products” – offers pioneered by Amazon (AMZN.O).
They’re also working to improve the quality of data insights they can sell to consumer goods companies, who in turn use it to target shoppers with ads for their products. The data is encrypted and aggregated so it cannot be traced back to individual buyers.
Muller said Ahold Delhaize, which owns supermarket chains including Stop & Shop in the US and Albert Heijin in the Netherlands, is using advertising revenue to keep food prices low as inflation persists in Europe and the US. United.
“What we generate on retail media revenue, we will invest back into our business to make sure consumers can afford healthy, sustainable products,” Muller said.
“We have to work very hard together, with retail and manufacturing, to keep costs down,” he added.
Muller declined to share how much Ahold Delhaize earns every time a shopper clicks on a sponsored product or banner ad.
Ahold Delhaize, which has a US retail media business called Peapod Digital Labs, is working on plans to launch an agency for Europe that will focus on brands not already in the group’s grocery stores.
Retailers are struggling to catch up with Amazon and Walmart, said Sean Turner, chief technology officer at Swiftly, a retail technology solutions provider.
Amazon reported $11.6 billion in revenue from its advertising business in the fourth quarter, while Walmart expanded its Walmart connection internal advertising business since 2019, when it cut ties with an external advertising partner.
“Retailers have to compete in retail media to have a future,” said Turner. “Others have figured out that they don’t have to make money selling things.
“They can sell at a loss” and recoup margins later through sell announcements, he added.
Reporting by Jessica DiNapoli in New York, additional reporting by Helen Reid in London; Editing by Kirsten Donovan
Our standards: The Thomson Reuters Principles of Trust.
https://www.reuters.com/business/retail-consumer/ahold-delhaize-hits-roughly-half-its-1-bln-euro-goal-non-grocery-revenue-2023-06-12/
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