How Albertsons Media Collective is positioning itself to brands after failed Kroger merger
By creating a company of around 5,000 stores, the failed Kroger-Albertsons deal would have created a behemoth in retail media that experts argued would have been able to challenge Walmart with a greater breadth of data.
But with the potential deal now behind them, both companies will now need to chart their own paths as competitors. For Albertsons, like many grocers and retailers, its advertising business will be crucial to future growth, tapping into its e-commerce business that, as of last year, made up more than 7% of its grocery revenue.
“While we are disappointed that the merger was terminated, we never stopped investing in our business,” Albertsons CEO Vivek Sankaran said on the company’s last earnings call on Jan. 8. He added that the company has continued to invest in growth in its digital platforms — e-commerce, loyalty, pharmacy/health and its mobile app — to generate digital space and data for the Albertsons Media Collective retail media network as well as to increase sales and more deeply engage with customers.
“[Albertsons Media Collective] continues to be one of the largest opportunities we have to fuel reinvestment into our business,” Sankaran said.
Melissa Minkow, global director of retail strategy for CI&T, said the merger failure allows the company to maintain more control over its brand that it possibly wouldn’t have if merged with Kroger.
“It’s a place where they can leverage the positioning they have, the resources they have, and both the physical and online storefronts to really optimize their knowledge, expertise and relationships with their brands,” she said.
In the wake of the merger, Albertsons made several key hires to flesh out the Media Collective. Last October, the network announced it brought on Julian Mintz from Roku as vp of sales and former Yahoo vp Sean Quick as vp of commercial strategy.
And in January, Liz Roche — previously chief data officer for Accelerate360, publisher of Us Weekly and In Touch Weekly — joined the company as vp of media and measurement. At Shoptalk, Roche sat down with Modern Retail to discuss how the company is redefining and selling itself as a data platform and media partner to brands. She declined to comment on the failed Kroger merger.
“What makes us different, and what attracted me to the Collective specifically, is the hyper-focus on [voice of customer] and the spirit of innovation and bias for action,” Roche said. “The culture here is, ‘Let’s get in a room and let’s whiteboard and let’s try something new.’ … There are a lot of different ways to run a business like this. Ours definitely is driven by voice of customer, innovation, speed to market and reducing complexity.”
Last summer, Albertsons launched a new feature called Collective TV for brands to target, measure and optimize campaigns across streaming, digital video and linear TV. In January, the retailer launched an API to integrate Albertsons’ campaign performance data into brands’ own measurement models for analysis. It also partnered with TransUnion to offer marketing mix modeling measurement to compare performance across retailers and channels.
“When it comes to differentiation, one of our biggest value props is our innovation. We definitely strive to be first-to-market,” Roche said. “It’s really about continuing down that path, but also expanding how we think about things like measurement, expanding how we think about experimentation and expanding the types of KPIs we’re looking at.”
Roche’s role didn’t exist before. Her role brings together media and measurement, which were previously separate. She said she has noticed over the past few months that brands have similarly started to break down silos in their businesses — combining their brand and commerce media teams — as brand marketers want to better understand how their campaigns perform.
“Across the industry, we’re seeing more silos being broken down, and this was a really natural silo to break down,” Roche said. “It was a really huge strategic move for Albertsons to make, to think about media and measurement as one, because, really, they don’t exist without the other, especially in retail media.”
Closing the loop is one of the biggest challenges for brands that Roche believes is the big value proposition for the Media Collective, given its first-party data. “The challenge becomes that there are disparate channels all over the place, and the shopper is also all over the place,” Roche said. “They’re on Pinterest, they’re on Meta, they’re spending time in store, and they’re listening to podcasts.”
Albertsons is leveraging partnerships with brands and social platforms to accomplish this. It was the first advertiser in 2023 to use a Pinterest advertising measurement feature where Pinterest and Albertsons could upload first-party data in a non-identifiable way. Albertsons since worked with Mondelez on a Pinterest campaign that generated a 16% sales lift through a campaign around salty snacks.
Brands continue to pressure retailers to deliver measurable results with their ad networks. In a separate conversation at Shoptalk, Harvey Ma, vp and general manager of Sam’s Club’s Member Access Platform, said he believes that this year and next year, brands will more heavily scrutinize retailers’ ad businesses.
“For us, it’s all about leaning into the partners, understanding that voice of the customer and charging it forward from there,” Roche said.