Hy-Vee launched the full-scale version of its retail media network, called Hy-Vee RedMedia, at the Groceryshop 2023 conference this week in Las Vegas.
The West Des Moines, Iowa-based retailer described the platform as a disruptor in the retail media landscape that will connect brands directly with Hy-Vee’s customer base across multiple platforms, including both online and in-store.
“This venture will help build brand affinity through meaningful and personalized interactions,” Hy-Vee said in a statement. “Hy-Vee RedMedia allows companies to reach specific consumers across multiple channels to create robust omnichannel marketing strategies through Hy-Vee digital platforms, in-store advertising and brand-safe sites.”
Hy-Vee in 2021 debuted its first-iteration retail media network in partnership with digital media and promotions specialist Quotient, which is listed as one of the partners in the newly rebranded Hy-Vee RedMedia. Other partners include Razorfish, Prodx, CitrusAd, Circana, Vibenomics and Merkle.
In messaging on the Hy-Vee RedMedia website, the company said its return on ad spend is “well above the national average.”
“Our radical pay-per-conversion model is shaking up the industry, ensuring brands can spend their money more effectively and efficiently,” the company said on the site.
Hy-Vee said it meshes its first-party customer data with data from leading advertising firms to enable brands to target shoppers across the web and on social media. In addition, Hy-Vee said it has doubled its in-store digital displays, which creates more opportunities for marketers to reach customers in stores as well as online.
“Retail media is outpacing traditional marketing and will be a game changer in consumer marketing,” said Jason Farver, president of Hy-Vee RedMedia. “Leveraging insights allows companies to be smarter and more strategic with their marketing dollars, while also improving the customer experience by reaching the right customer at the right time with the right product offering.”
Hy-Vee said that its broad business portfolio enables it to provide customer insights beyond simple demographics, which allows it to provide data that better illustrates lifestyle preferences. This in turn enables marketers to create more personalized messages to shoppers.
Hy-Vee, which operates 285 retail stores across eight Midwestern states with annual sales of more than $13 billion, operates businesses that include not only grocery, but also pharmacy, dietetics, specialty health care, banking, manufacturing, construction, wine and spirits, and others, along with digital ventures that include Hy-Vee Aisles Online, WholeLotta.com, VCRx.org, and RedBox Rx.
Eighty percent of Hy-Vee’s customers are digitally engaged, Farver was quoted as saying in an interview with Forbes.
“A big focus for us is how do we approach our customers in an omni-channel way,” he said.
Recent technological developments, combined with the growth in consumer adoption of ecommerce, have contributed to the proliferation of retail media networks in the last few years, according to a recent report from the Association of National Advertisers. The report projected that retail media network ad revenue will total $61 billion in 2024, up from an estimated $52 billion in 2023, according to data from eMarketer.
In addition, 73% of brands surveyed by the ANA said they expect to be spending somewhat more or significantly more on retail media networks in the future than they spend currently.