Dive Brief:

• As e-commerce sales increase, more and more grocers are establishing digital media services aimed at growing revenue and helping suppliers get the most out of their online marketing dollars, according to a report from research firm IGD.
• Last week, Southeastern Grocers announced the launch of SEG Media Hub, a service that helps suppliers target shoppers across the company’s digital platforms, and measures purchase conversions for ads using advanced analytics. Southeastern, which recently emerged from Chapter 11 financial restructuring, joins similar efforts from Kroger, Albertsons, Walmart and Amazon.
• Effective digital ads can boost sales and drive online traffic, IGD writes. Digital media services can also strengthen bonds between retailers and suppliers.

Dive Insight:

Leading grocers have data-collecting capabilities that help them precisely target their offerings to consumers online. So it only makes sense for them to turn these capabilities into a revenue opportunity that can also improve their digital shelves.

Digital media services like Kroger Precision Marketing and SEG Media Hub help suppliers track the effectiveness of their online advertising and coupon spending. For manufacturers used to running store promotions, digital marketing offers ways to nab new customers, build bigger baskets and foster loyalty. Companies want to make sure they’re getting the most out of these promotions, whether it be a traditional banner ad or a creative new concept.

Meanwhile, retailers want to encourage suppliers to spend online marketing dollars with them, and a tool that helps them measure effectiveness can be seen an added value towards that end. According to a recent report from Gartner L2, most grocers are not positioned to capture the estimated $55 billion in trade spending that’s expected to migrate online in the coming years.

The nation's largest retailers have captured most of the online trade dollars being spent by suppliers, the report found. Amazon, Target and Walmart together accounted for 30% of display advertising impressions measured across 266 CPG brands.

Southeastern Grocers, Albertsons and Kroger want in on that spending. But they also want to make sure that spending is effective, since it can determine the success of their online assortment. Better ads and coupons can boost sales for both suppliers and retailers. Everyone, potentially, comes out a winner.

Beyond measuring effectiveness, retailers need to offer creative marketing solutions to suppliers. Brand stores, promoted products and shoppable recipes are just a few options that are available, but that retailers may not be aware of. FreshDirect, the L2 report noted, does a particularly effective job of building baskets with its product suggestions that happen at checkout and after shoppers put items in their cart.

Retailers and suppliers know how to leverage impulse buys, slotting fees and other in-store mechanisms, but they also need to know there’s an array of promotional options online, too. If they can put some creative tools into play, all the while benchmarking their performance, they’ll be able to maximize sales coming from the growing number of shoppers moving online.