Pharmacy chains are having a retail media moment.

Over the last few years, drugstore chains like Walgreens and CVS Health have spruced up their retail media offerings with self-serve ads, advancements in closed loop measurements, and added in-store features to make the case for being easy to use and competitive retail media destinations for advertisers.

Pharmacies are worthwhile contenders within this space for a number of reasons. Retailers like Walgreens and CVS are sitting on high-quality, first-party data because of their valuable loyalty programs.

Drugstores typically see high-frequency shoppers and payment transactions, and a high percentage of those transactions are linked to their loyalty programs, making their first-party data more sophisticated. Plus, pharmacies sell products that overlap with popular advertiser categories like CPGs.

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There has been a steady drumbeat of in-store retail media investments by major retailers in recent years.

Kroger, for instance, signed a deal with Cooler Screens (a company that turns refrigerated doors into interactive advertising displays) for 500 stores in May 2023. Regional grocer HyVee closed a deal with Samsung to introduce 10,000 screens over its footprint of stores across aisles, deli, meat, and seafood counters.

Over the last few years, these in-store retail media investments have begun to happen in a much more concrete way. So Retail Brew sat down with Andrew Lipsman, independent analyst at Media, Ads + Commerce, to talk about the evolution of in-store retail media and why it should matter to CPGs.

This interview has been lightly edited for length and clarity.

Are retailers prioritizing in-store retail media this year?

Going back to 2022, in-store retail media was barely a blip on the radar of most retail media networks. It hadn’t moved to the forefront of conversation. Things started to shift in a pretty pronounced fashion throughout 2023 and when this research was done in mid or late 2023 it was looking at retailers’ top monetization solution investments and in-store digital media, which only registered 9% in the previous year, had jumped up to No. 2 on the list at 33%.

That really aligned with what I had been hearing in talking to a lot of the retail media networks, which is that they were starting to shift attention and focus and starting to allocate investment, knowing that they were going to need to build out the retail media networks.

Now last year, they were still very much in the strategizing mode. And what we’re seeing now in 2024 is it’s kind of still in strategizing mode, but also moving toward execution and increasingly rollout of screens.

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Albertsons launched its retail media network in 2021 and offered CPGs ads on its website and app through its partnership with CitrusAd and Merkle.

However, Albertsons Media Collective has evolved quite a bit since then. It now offers CPGs the ability to run connected TV (CTV) ads with its new offering, Collective TV. CTV is the “fastest-growing major ad channel in the US of all formats,” according to eMarketer data.

Retail Brew sat down with Evan Hovorka, VP of product and innovation at Albertsons Media Collective, on the sidelines of the Interactive Advertising Bureau’s Connected Commerce Summit last month to talk about the company’s retail media strategy.

This interview has been lightly edited for length and clarity.

What’s the most recent retail media innovation at Albertsons?

I think CTV, digital out-of-home and in-store—three very special channels—we’ve been in on all three. But, CTV, in particular, because a lot of the TV and CTV is executed by the agency, a traditional RMN-managed service model didn’t make sense for it, for all use cases.

So, our approach to Collective TV was to have three different channels to reflect the unique buying patterns and unique clients. DIY is the oldest. It’s our do-it-yourself channel…It’s CTV inventory bought through the Trade Desk leveraging our audience and measurement as modular capabilities within the agency seat. That’s what’s unique about it.

[The second] one is premium. That is your traditional managed service. This is us building curated deal IDs with NBCU, having custom partnerships with…YouTube. It is for CPGs primarily. It’s what you traditionally think of as a retail media product. A major soft drink brand calls us, they want to do curated CTV, they hand over the budget. We execute everything and show the results back to the client. That’s our premium offering.

Keep reading here.—VC