How Woolworths, Loblaws, and other retailers are developing digital advertising arms and profiling customers, aiming to become ad venues for large brands
Alistair Gray / Financial Times :
Context & Ripple Effects
This is the grocery-and-drugstore chapter of a playbook Amazon wrote years ago: as far back as 2018, retailers like Target, Walmart, and Tesco were already selling ads and search keywords on their own sites to consumer goods companies. What Woolworths and Loblaws are doing now extends that from website placements to full advertising arms built on customer purchase profiles.
The timing matters because ad buyers have been hunting for alternatives to the Facebook/Google duopoly since at least 2017, when Publicis, Omnicom, and WPP committed to boosting Amazon spending by 40% to 100% in a single year. Retailers with checkout-level data are positioning themselves as the next destination for those shifted budgets.
First-order effects
- Large consumer brands gain a new targeted-advertising venue built on Woolworths' and Loblaws' customer profiles, letting them reach shoppers with purchase-history precision that open-web display cannot match.
- Woolworths and Loblaws convert an existing asset — loyalty and transaction data — into a high-margin revenue stream layered on top of their core retail operations.
Second-order effects
- Brands squeezed by rising digital advertising costs elsewhere face a pricing counterweight: if retail media scales, it pressures the rates platforms like Google and Facebook can charge for performance budgets — the same dynamic behind [[a:840025|nearly half of tracked online footwear, apparel, and accessories brands opening physical stores]] to escape expensive online acquisition.
- Holding companies such as Publicis, Omnicom, and WPP, which already rerouted significant spend to Amazon after committing to 40%-100% increases in 2018, will be pushed to build retail-media planning capabilities or risk losing the media-buying relationship to in-house retailer sales teams.
Third-order effects
- If the pattern holds, retail media becomes a structural third pillar of digital advertising alongside search and social, with the industry's most valuable targeting signal shifting from browsing behavior to verified purchases — and customer profiling at this scale invites scrutiny over how much shopper data grocers should monetize.
- The moat inverts: retailers no longer just sell shelf space to brands; they sell audience access, which means brand manufacturers' negotiating leverage shifts toward whoever owns the checkout data.
The trend: Grocers and mass retailers are following Amazon's template of turning first-party purchase data into advertising businesses, becoming a growing claim on brand marketing budgets once concentrated in the Facebook/Google duopoly.