Dive Brief:

• Sprouts Farmers Market has unveiled a retail media network based on Instacart’s Carrot Ads technology, the companies announced Wednesday.
• The arrangement allows CPG companies to target advertisements specifically at the specialty grocer’s online customers.
• Sprouts is the latest grocery chain to tap into the range of services Instacart offers to retailers as the tech company strives to become less reliant on its legacy e-commerce services.

Dive Insight:

Sprouts’ decision to work with Instacart to establish itself in the fast-growing retail media arena gives the retailer the opportunity to leverage its e-commerce platform to connect product suppliers with its health-focused customer base.

The supermarket chain has made strides in building its online grocery presence and saw digital sales increase 12.2% year-over-year in its first quarter. Sprouts also has been stepping up its efforts to build digital relationships with shoppers and is seeing those initiatives pay off, CEO Jack Sinclair said Monday during an earnings call.

Suppliers that have signed on to use Sprouts’ new retail media platform include Califia Farms, General Mills, Primal Kitchen and Siete Family Foods, according to the announcement. 

Instacart Ads is part of Instacart Platform, a suite of services the company rolled out in early 2022 as part of a broad effort to remain relevant with retailers as the e-commerce landscape evolves. The suite includes e-commerce development tools, data insights and a fulfillment service.

Companies that advertise through Instacart Ads can access data about the effectiveness of their messages, such as metrics about attributed sales and return on ad spend. The service’s reach now includes more than 1,100 retailer banners, according to the press release.

Earlier this year, Instacart announced that it had upgraded Instacart Platform to allow grocers to present display advertisements on their retail media networks powered by Carrot Ads.