The news: Target is treading carefully with in-store retail media as it tries to avoid making any changes that might disturb the customer experience, executives said at a Target Roundel event last week.
That puts the retailer at odds with companies like Walmart, Walgreens, and even McDonald’s, all of which are giving advertisers more opportunities to reach in-store customers.
The big picture: Target’s reluctance to expand in-store advertising is a direct response to customer feedback, according to Jenny Holleran, vice president of Roundel’s partner solutions group. Shoppers have communicated “so many times” that they want to be able to walk through aisles without being disrupted,” Holleran said. Given that Target can ill afford to lose customer goodwill at a critical point in its turnaround, it’s no surprise that the retailer is taking shoppers’ feedback to heart and steering clear of any potentially controversial store redesigns.
That doesn’t mean Roundel advertisers lack the ability to reach in-store customers: Holleran noted that ads on Target’s ecommerce platforms are viewed by 60% of shoppers who use the retailer’s app and mobile site while in the store. Brands can also purchase placements on Target's red box scanners, which shoppers use to check prices. But beyond that, companies are limited to traditional tactics—packaging, shelf placement, branding—to catch shoppers’ eyes.
Implications for retail media: While Target claims that its reticence is a response to consumers’ preferences, data suggests that shoppers are largely fine with digital screens in stores. On the whole, the majority of US grocery shoppers have positive to neutral sentiments toward screens in most areas of the grocery store, according to a March survey conducted by Grocery TV in partnership with Media, Ads + Commerce.
As a result, Target’s reluctance to invest in in-store retail media risks leaving money on the table. The longer Target waits to install—or at the very least experiment with—digital screens at its stores, the more ground it could lose to Walmart, Albertsons, and others in the process of building out their in-store advertising infrastructure. It also risks making Roundel less appealing to the many advertisers looking to reach shoppers in physical stores, and deprives Target of an opportunity to differentiate its ad network from Amazon’s.
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