Digital screens are becoming as ubiquitous as self-checkouts, with nearly every major grocer expanding their retail media offer in order to capture a slice of what is slated to be a £1bn market by 2025.
It should come as no surprise then that Iceland has decided to join them. As revealed by The Grocer today, the frozen giant is plotting a major expansion of its digital media offer, with plans to roll out potentially thousands of new digital screens to its Iceland and Food Warehouse estate.
To facilitate those ambitions, Iceland has promoted category trading manager Adam Smith to be its first-ever head of retail media to lead a newly minted in-house retail media team, working with buyers and suppliers to build the proposition.
Iceland has set the long-term goal of rolling out screens to its ever-expanding footprint of nearly 1,000 stores, as well as ramping up its data and analytics functions. On the basis that there could be room to add five or more screens to each store, Iceland would have one of the largest digital screen networks in the UK once the rollout is achieved.
Bigger is not always better
Alongside its substantial online delivery and Bonus Card offer, it would make Iceland one of the dominant players in grocery retail media once the rollout is achieved. Refitting 1,000 stores will be no quick blitz, however.
Adding “physical hardware” to stores is only one part of the retail media journey, highlights Alex Walker, MD of Havas Market, the retail media arm of ad agency Havas UK.
“They are starting to swim in a more crowded space. At what point are they chasing the same pound, dollar or euro from the same top 20 fmcg vendors as everyone else?” he asks.
However, while the likes of Tesco have much more established and better integrated loyalty schemes and data arms, Iceland brings some distinct advantages to the table.
It’s niche as a frozen grocer should “give it a point of difference”, particularly among frozen brands looking to reach their target consumer, Walker says.
The retailer will also be able to call upon its network of exclusive partnerships with brands including Harry Ramsden’s, Greggs and the Sidemen, as well as its network of overseas suppliers – like pizza maker Italpizza – that other grocers won’t.
The Iceland advantage
As an experienced buyer with seven years’ experience at Iceland – combined with a nearly eight years across Nisa and Tesco – Smith knows the Iceland culture inside out, and will be able to lean on that to make sure that commercial negotiations suit both supplier and Iceland.
Ultimately, Iceland’s success will depend on its “long tail strategy” and how well it can harness and monetise the data from its Bonus Card loyalty scheme, Walker says.
Building an established pipeline of “non-endemic” partnerships with the likes of insurance, travel and hospitality businesses will be another key opportunity, he adds, highlighting the success of Tesco’s partnership with Vauxhall at its EV charging points.
“That’s truly incremental [income],” Walker says. “They’re broadening their ability to to get margin from other vendors that they would never normally deal with because they don’t sell frozen food.”
There are signs Iceland is already preparing for that. Last month, the supermarket launched a new partnership with Parkdean Resorts, to give its Bonus Card holders £50 off their stay at the holiday parks.
Iceland might be at the beginning of its retail media “journey”, but its rivals, suppliers, and potential new partners will all be watching closely.
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