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Unlocking Retail Media is the essential podcast for leaders and marketers navigating the rapidly evolving world of retail advertising. We move beyond day-to-day operations to explore the strategic future of the industry, covering major investment trends, the shift to hybrid marketplace models, and the existential disruption posed by Agentic Commerce. Host James Avery brings in top industry veterans and visionary founders to analyze how ground-breaking technology is transforming customer journeys, influencing product catalogs, and forcing retailers to rethink on-site, in-store, and digital media strategies to remain competitive in the modern age.
Michael Schuh: [00:00:00] Certainly the biggest threat is with onsite media here in the us, which is such a huge portion of the business and a huge portion of the profit that these retail media businesses drive. If research and inspiration and discovery, and sometimes even the transaction itself start happening off of another property that takes that impression, that click, you know, that experience off of a retailer's site, out of its app.
James Avery: Welcome to Unlocking Retail Media, the podcast where we explore the evolving world of retail media from data strategy to monetization and everything in between. This is where we break down how retailers can build smarter data-driven media networks by aligning with what brands truly need from scalable ad solutions and meaningful metrics to cross
Michael Schuh: channel attribution and programmatic strategy.
James Avery: Welcome to Unlocking Retail Media. If you've been following the podcast, we've had a lot of conversations about where retail media is going. My guest today, Michael Shu, is someone who's actually helped build where it is today. He's one of [00:01:00] the leaders who's basically grown up with the industry. He started at Dun Humvee, then spent a decade at 84 51, which is Kroger's Data Science and Media Company, helping build and scale Kroger Precision Marketing.
Uh, from the early days last year, he returned to Dunhumby as SVP and Global Head of Media. Along the way, he's led strategy and product across onsite, offsite, and in-store Media helped commercialize Kroger's Digital properties, in-house ad tech, modernized in-store media, and co-chaired the I'S Retail Media Measurement Committee helping shape the standards that many of us now operate on.
He's the next guest in our lineup who's here to share lessons from actually doing it, building, scaling, and evolving retail media inside one of the most sophisticated ecosystems in the space. Thanks for joining me, Michael.
Michael Schuh: Good to be here. James. Good to see you.
James Avery: Absolutely. Um, so I wanna start out, uh, you know, dun Humvee is, is a, you know, a well-known name, especially across the pond in the uk.
I think in the US it's, it's, it's known in the industry, but I [00:02:00] think we have a lot of people listening who, who maybe haven't been in retail media for, for 10 years or even, or even 10 months for some people. So I'd love to kind of go back and do a little bit of the history of like, where, where did, where did Dun hubby come from and, and, and about that transition to 84 51.
Michael Schuh: Yeah, there's a, there's a whole long history, so I'll give you the, uh, the, the CliffNotes version. But, um, DUNHUMBY is, is part of the Tesco group, as you know, in the uk and, and has really been the founder of, of kind of customer loyalty data, uh, science, uh, and, and thinking for decades at this point. Uh, and the relationship with Kroger originally started, uh, when a few folks from Dunhumby came over and formed a joint venture with Kroger almost 25 years ago at this point.
Started working with, uh, various parts of the Kroger team on, uh, how to build out and scale loyalty program, how to, um, you know, then, uh, connect that in through parts of the core retail business. If you think about category management, you think about loyalty and personalization capabilities [00:03:00] and.
Eventually, um, Kroger actually bought out part of their interest in Dunhumby and formed, as you mentioned earlier, 84 51. Uh, that was in, uh, 2015, I think. So a little over a decade ago. Uh, and 84 51 really sort of became for Kroger what, uh, Dunhumby partly is for Tesco in the uk Right. Became a wholly owned sort of engine of, of customer data science, uh, loyalty, insights, and personalization to help.
Bring some of that customer data loyalty and then eventually sort of media capabilities, uh, to, to the forefront. Uh, and Dunhumby sort of outside of Kroger has continued as an entity really across the globe. We obviously do a ton of work for Tesco still in the uk. Um, but a big part of, of kind of my focus and my remit as well as, you know, our, our broader business.
As how do we help what we've, uh, what we as dunhumby have done for, for Tesco as an example, uh, and help other retailers, uh, across the globe scale out their capabilities in the right way, right? And monetize data and [00:04:00] insights. Um, stand up and build media businesses. Make better price, promotion, assortment decisions using customer data science and, and the like.
And so it's a big part of what Dunhumby is really core and, and found is, is is sort of the core of Dunhumby and what Dunhumby was founded on. And really, uh, bill ourselves as, as being that customer science engine and, and helping businesses scale.
James Avery: It makes a total ton of sense. Uh, I think it's, it's always funny in, especially in the uk, you know, when we're going in and we're talking to all these different retailers.
It's almost universal that a hundred percent of the people you know running or second in command at these different retail media networks started at Dun hubby. Like it's, it's just, you know, everywhere. It's kind of like, okay, it's just a foregone conclusion that they're gonna say, I started at Dun Humvee and then I went to here and then here and then here.
Uh, so I think it's, it's one of those kind of, uh, like if you think about like Triad being like one of the other really early, uh, retail media players, dun Humvee is kind of the other one I think of in that, that group. Uh, [00:05:00] somebody who was really ahead of like, way ahead of the curve, uh, you know, both on the data science side, but then also, you know, what evolved into more retail media.
Michael Schuh: We take, uh, we take a lot of pride in our broad sort of alumni network of, of Dun Ians across, uh, across different retailers, tech companies, all, all over the place that it's, you know, fun to stay in contact with and fun to partner with. And, you know, certainly in different ways is, uh, as they, uh, you know, navigate their own organizations and challenges.
James Avery: Absolutely. And I think one of the, one of the things you mentioned, right, is like the, the date that stood out, which is like, you know, 2015. So we're talking, this is, this is before. Retail media was really a thing, but obviously it, it was a thing. It just didn't have the hype, it wasn't being talked about like it was today.
How did, how did, when did, uh, when did kind of Kroger start, you know, and obviously with 84, 51, you know, it was, I think you said 20 14, 20 15. Yep. Um, when did, when did the media part start to come into it? Like on top of the loyalty and, and, and data science and things like that?
Michael Schuh: Yeah. [00:06:00] For, for Kroger in 84, 51 sort of really ar around that time, so I was, um, I was one of sort of the founding members of what became the KPM business and.
It was interesting in those earlier days of retail media when there, there, there just wasn't a whole lot out there. There wasn't the same hype around it. Now it wasn't the same attention. It was all about building sort of the original sort of business case for what would become KPM and selling that into a very traditional hundred plus year old retail organization.
Right? Why should you care about this? And you know, a huge part of that was. Running POCs, forming some initial partnerships, um, proving that we could do it to some extent, sort of proving in a, uh, in somewhat of a very scrappy way that retail data is an incredibly powerful accelerant for, uh, media and advertising.
Whether that happens, you know, on a retailer's own digital properties, uh, in their stores, or, you know, by making, uh, ads smarter offsite with better targeting, better measurement, and sort of [00:07:00] closing that loop in different ways. And so, yeah, it was, it was really interesting in those sort of early days, I, uh.
I, I, you know, joined a, a, a very early team and, and it was fun to sort of scale with that business and, and really sort of shape, uh, in the US especially, uh, what would become, you know, one of the leading, uh, retail media businesses. But, um, also, you know, Kroger does a great job of, of. Um, having a broad sort of network, uh, of, of, you know, um, partners across different areas and, and really trying to influence the industry in the right ways and, and push for, um, you know, customer first focus in a lot of ways.
And, uh, and that was a, a fun, a fun, you know, uh, journey to be a part of.
James Avery: And how did, how did it, uh, how did you, how did they, or how did you all start it? Like did, was it, was it first, you know, kind of in store, was it on site, you know, even, you know, 2015, like obviously the, the website and things like that were, were, were around, maybe didn't have the scale and sophistication that they do today or the [00:08:00] app or things like that.
Like what was the, what was the kind of beginnings of it?
Michael Schuh: For Kroger, it actually started with offsite media. Um, if you, if you can sort of believe that piece of it with where, you know, where the industry is today and so much focus on onsite and in-store. Um, but you know, we, we first sort of saw some of the value of building audiences and.
I formed an early partnership, a LiveRamp, and you know, partnerships with some leading brands to test out capabilities and different things. And you know, those were the earlier days, especially in grocery of e-commerce starting to come online and start to be more of a thing. Right. Certainly that accelerated in 2020.
In a big way. Um, but Kroger was an early sort of, you know, innovator in that space. And, uh, it wasn't probably until 20 17, 18 that we really started to pay a lot more attention to the onsite space, which has, you know, become very clearly here in the US sort of the leading investment lever, uh, with um.
Which is the, the digital engagement that happens, you know, here in the [00:09:00] US with retailers and, uh, through apps and experiences and, you know, delivery capabilities that are here. Uh, that's certainly become much more of a focus. But it actually started with offsite media, which is interesting. And, and now, you know, a little bit is coming full circle in a lot of ways back to in-store media, which, uh, it's not to say there wasn't in-store media at the time.
There has been for, you know, decades. Just been much more analog and, and much more tied in with sort of core merchandising, um, experiences that, you know, were happening like end caps and, and displays and different things. And, uh, it's been fun now to see, uh, people start to rethink what that could look like in more modern environment.
James Avery: I think it's interesting when, you know, this is obviously with somebody like Kroger, right? They've been doing that for in-store, has been a thing for I don't know how many decades and decades, right. Of, you know, it's an end cap. It's a sticker. It's, it's something, uh, how do you, how do you think that's, like, what do you think that transition's gonna look like for retailers?
Like moving from that, you know, there's both the internal side of, of merchant to, to [00:10:00] media, but then also the, the kind of like customer experience side of it.
Michael Schuh: We could spend, we could spend a few hours on this one, James. Um. Well, what what's been interesting is I've, you know, rejoined on Humvee obviously, and gotten, you know, much closer to a lot of different global retailers, including, you know, Tesco who we're, we're, we're very close with.
Um, you know, other parts of the world are so far ahead on the in-store media journey and the digitization of the store. And, uh, that's been a really interesting thing to get closer to and to bring some of those learnings here to the US market with some of our retail clients and, uh, and, and partners. Um.
The, the journey's gonna look a little bit different for everybody and, and some of it just depends on, you know, internal structures and the relationship between the media and the merchandising team. Everybody's really in sort of a different spot. You know, there's, uh, retailers like Tesco and Kroger for example, have sort of had at different points a very standalone media business that is a little bit disconnected from merchandising.
And now maybe getting a little bit closer and connected in, um, [00:11:00] other major retailers have, you know, grown their media business out. You know, within the merchandising or within the marketing part of the retail organization. And all of those have, you know, pluses and minuses and different things. But, um, how the in-store sort of transition happens is gonna a little bit depend on what that structure looks like and how you create the right autonomy to let, uh, let a business actually run and develop.
Um, some of it's gonna be heavily dependent, especially here in the US, on what is the right business model for how that works, right? There's so many just. Giant stores, right? If you think about Kroger's and Walmarts and Myers and, uh, all these stores like the capital required to deploy digital screens across, uh, you know, a wide swath of that store is in incredibly expensive.
And so, um, that, that's what's been really interesting to bring some of the learnings together from where we've seen the economic model work in parts of Europe, uh, to the forefront. And I've always gone back, you know, even back to my time at, at Kroger, um, looking [00:12:00] after part of the in-store business, as we've been able to learn from, uh, some of the successes that have happened in, you know, with European retailers and the in-store sort of transition.
Um, a big part of of how that happens successfully is again, keeping the customer at the center of that decision. Right. What are customers doing when they walk around the store? Are your customers engaging with your digital app as they walk around the store? And what does that. Experience in store then need to look like, um, are, um, are there moments where they're, um, spending a lot of dwell time right at the deli while their meat's getting cut or at point of sale while they're, uh, waiting for checkout?
Uh, or I don't know, different points where you can actually be useful to the customer, right? How can you inspire them in different ways? How can you create great brand, um. That moments, uh, to either, you know, get them to purchase something new or drive awareness of something or inspire them with a recipe.
It's a grocery environment or, you know, we do a lot of work with DIY, um, and home improvement retailers as well [00:13:00] as I know you all do. And so, you know, are, is there some sort of, you know, connection in with, you know, how can I, how can I best use this tool that I'm considering? Or what are the trade-offs between these few things?
I use media to be really useful for a customer in those touchpoint that just develops this, you know. Broader sort of loyalty with the retailer and, and a more trusted relationship with the customer in that way?
James Avery: Yeah. You know, I go back to, I feel like the, like in the grocery side, like the dream is that, you know, I'm getting media delivered based on what I'm doing.
I think we're still, we're still probably too far off from that. I know people have tried like smart carts, but then you see, you know, you see carts in a ditch somewhere and you're like, you don't want a thousand dollars cart in a ditch. Um, but you know, just the idea of like, I, you know, I pick up tortillas and, and something's telling me, Hey, like if you want to try this, this new guacamole that's in the deli section.
Like, here's, here's 25% off.
Michael Schuh: Yeah.
James Avery: You know, or something like that. Right. Like those, those sorts of interactions. It feels like we'll get there someday. And I know there's like, [00:14:00] been some tests and people are working on it, but it's definitely not, not like widely, widely done. Uh, it's interesting you said about Europe.
Like I I see the same thing we were, I went and toured, uh, continental, one of our customers we work with in, in Portugal, and I was shocked by the like how digitized. The, the store really was, but the other thing I also realized was like the, the density, like the population density also contributes to that.
Yeah. Like you mentioned the, you know, how many people are in a store, like you're in the store, it's like there's, you know, there's 20 people at checkout at any given time, the store is packed. Whereas, you know, I have, I think in America we're used to this level of like, convenience, where, you know, I have, I have four Harris Teeters, you know, Kroger's brand in, in North Carolina.
Michael Schuh: Yep.
James Avery: Um, within like a, like a six mile radius. It be. It's like I can, I can pick any one of those to go to, and none of them are ever that, you know, that busy compared to a, a standard European store. And so every one of those, it's how do you get power to the screens? How do you get wifi or internet to the screens and, and deploy all these [00:15:00] expensive screens.
Michael Schuh: Yeah.
James Avery: Uh, so yeah, I definitely think the, it's, it's gonna be, it know sometimes a little bit more of a challenge here than in Europe, but, but it seems like it's gonna get there.
Michael Schuh: Yeah, I think it will. And you know, as it becomes more digitized, you know what's interesting and where we've, we've worked with a lot of our clients is how do you then be smarter about not only where you put screens, uh, and different media content touchpoints in store, but how does that then vary between stores?
Right. Oftentimes, you, you know, you, you mentioned the four Harris tees within your six mile radius. It's easy to treat those the same and to say, Hey, we're gonna put the same content, the same screens, the same thing here. But when you actually get down and start to look at the customer data, who shops that store, how often they shop, how long they stay in the store, um, what times of day they're there.
It might actually be very different because of traffic patterns, because of who lives around the store and because of. You know, maybe the assortment that's on the shelf in one spot versus another, or, you know, the price sensitivity of the customers in that community. [00:16:00] Like, there can be all kinds of different factors that, that's a, you know, another thing that I think the digitization of the store brings is how do you then be smarter, just like you can in onsite or offsite media about what ads you serve in store.
Now, you certainly can't be one-to-one without. Crossing a line on privacy. Uh, but you can, you can make a lot of inferences from the data at the time of day, the weather, all kinds of things that can influence how you be smarter about what you show a customer when they, when they navigate the store.
James Avery: Yeah, you're absolutely right because the, going back to my, my four Harris Teeters, I mean, one of them is six miles North into the, uh, into the woods basically, where, you know, they, they sell a lot of firewood and
Michael Schuh: Yeah.
James Avery: And, uh, you know, other things. And then the other one is six miles towards, you know, in the nicest part of town and it feels more like a Whole Foods. Right. And so, like, just the, the same, same same brand, you know, same store, you know, obviously, you know, 10 miles apart. Uh, and I think stocked very different things and Yeah.
And have a very different set of customers.
Michael Schuh: And that's where it can go back to the connection with the merchandising team, right? Because in that [00:17:00] case, obviously the merchandising team at Harris Teeter has poured a lot of effort into making sure that the makeup of that store, the assortment, the price, the promotion, the, the layout, um, serves that community and that client, uh, uh, content, uh, client very well.
Um. How do you then do the same with, with media, bring the same level of, of, you know, one-to-one sort of, you know, personalization at a store level.
James Avery: Yeah, it's a good, it's a good, uh, segue into something else I wanted to talk about, which is, is measurement and attribution, right? Not necessarily just for in-store, but I know you were part of the, you co-chaired the i Bs like retail media measurements committee.
There's a lot going on about, you know, how do we, how do we think about the right way to measure retail media? So I'd love to just kind of jump into, you know, how, how are you thinking about, uh, you know, how we get to be like, right. I guess maybe to rephrase it, thinking about where we came from, right? Like, like going all the way back 15 years ago, how are you measuring then versus how, you know, how do you think we should be measuring, uh, now?[00:18:00]
Michael Schuh: It's, uh, again, a great, a great topic that we could spend, uh, we could spend hours on. Um, what what's interesting for me about the measurement, you know, measurement gets so much attention. It gets so much focus because like ultimately that was and kind of is the promise of retail media, right? You can close the loop, you have the data.
Now the data looks different everywhere, right? You know, some retailers have, uh, really, really scaled loyalty programs. Some are just relying on credit card transactions and other things. So it, it's different every place. But in reality, there is the data there to close the loop. If you roll back, you know, 10, 15, 20 years, um, the focus was straight on that, right?
It was focused on attribution. I wanna understand, hey, customer saw ad, what did they buy? How can I do that? And over time we've had this sort of different notion of incrementality of lift. Is it based on holdout control? Are you using synthetic controls? Are you, um, using regression and in cova models?
Like all, all kinds of different things, right? There's, there's a. [00:19:00] More methodologies and different things than, than we could count. Um, but I think there's, what's interesting is there, there's a, a pretty well accepted sort of standard for what you need to provide basic attribution in near real time as well as some version of, you know, did this customer buy more than they otherwise would have if they hadn't seen the ad Right.
And that, that, that can. Be solved. And that can be, um, delivered through various methodologies, some of which I just referenced. But I think a huge part of it is it's, it's really just having transparent conversations with your brand and advertising partners. I think that's what, um, a lot of retailers sort of lose focus on, is they listen to what's going on in the market.
All this noise about measurement, I need to deliver IRO as in two weeks or in two days because that's what Amazon's doing or that's what Walmart's doing, or whoever. And, you know, I've gotta scramble on my teams to go do that. The reality is like, that's, that's great and fine for [00:20:00] Amazon, but it doesn't, it isn't what has to happen everywhere.
There needs to be some version of that, but it needs to be what's right for that particular retailer and the scale that they have, investment that they're getting, and the conversation with their brand and advertiser on what they're actually looking for. Being transparent with, Hey, here's where we are today.
Here's what we can deliver for you. Here's what you can expect from us. Help us get better. Let's challenge each other. Just like, um, again, back to the core, we're sort of retail and merchandising. Those merchants and those brands are having conversations about products, about price, about promotion.
Sometimes it's tense and sometimes it's a negotiation just like it's gonna be here too. But a lot of times that conversation is actually lacking. People are listening more to the market or to, um, other things than just sitting down and having a conversation on what do I actually need to deliver here to make you happy with your investment, to help you understand what your customers are doing and how you can continue to reach them better using the tools that I have available for you.[00:21:00]
James Avery: Yeah, I, I was talking to somebody who was, who was, uh, you know, fairly early on in the Amazon, and they made the point that, you know, they actually found with certain brands share of category was actually resonated way more than ROAS or I, ROAS or any sort of incrementality is that they were actually, you know, the, you know.
Brand was saying, okay, I'm, I'm currently number three in, in soda, you know, if you help me move to number two, like, that's how I get bonused.
Michael Schuh: Yeah,
James Avery: right. Like, it's not, it's not based on, you know, in, in any given market. Right. And it's, and it's not based on, you know, oh, did I spend, you know, $10,000 and get $30,000 back?
Right,
Michael Schuh: right. Yeah. On any one, you know, individual campaign, Hey, I'm throwing a few sponsored products out there, I'm doing this, I'm doing that. Um, it, it's less important than what is the brand actually looking at? And many of the brands are building their own internal attribution models and trying to connect across multiple retailers and different things too.
And so that's what I feel like is just, it's, it's lost in the. Lost in the noise a little bit. Sometimes [00:22:00] that's what you know, we're trying to help our retail clients understand a little bit better and figure out, hey, for your value proposition, for what you're trying to do with your media business, what is right and how do you have the right conversations with brands, uh, to deliver on truly what they need and to, you know, maximize investment in your ecosystem and best serve your customers in the right ways.
James Avery: I think it's, it's a really important distinction that, you know, for some of us that that came from some of the traditional ad tech where for publishers, it was always, I feel, you know, very similar. Right? It was just a similar playbook. Every publisher was doing it the same way. Retail is really so much, you know, so different, right?
Like going into a home improvement store is way different than going into my grocery store. I might go into one twice a week, right? I might go into my home home improvement store. It's three times a month, but it's on the same Saturday where I'm trying to fix something, right? And I'm back. I'm back for the third time in the same day.
Uh, and so it's every, every pattern's different. The amount of spend, what you're spending on how the brands think [00:23:00] about it, uh, I think it, it really, it does make sense why you, you know. There's so much more to figure out here in a given retailer. Right. And I know that's a lot of what, what Dun Hubby's doing now right?
Is going out and helping a retailer figure out what is the right retail media network, what's the right, you know, configuration for that individual retailer.
Michael Schuh: Yeah. And yeah, we do a lot of, um. We do a lot of consulting work for our different retail partners, whether it's, you know, design work on trying to stand up a new retail business or, you know, it's helping them stand up a new channel or get sort of unstuck when they hit a ceiling or, you know, improve.
You know, so much of what we hear is sort of the operational element, right? You stand up these channels, you stand up new partners, new technology, but you sort of forget that it takes a lot of execution and a lot of handholding to actually run a business, right? And so how do you start to, um. You know, automate parts of that.
How do you help your people do more with less? How do you, how do you, uh, bring forward the right sort of integrations and tools and Yeah, it's a big part of, you know, I've, I've been back at Dunhumby for, you know, eight months or so now, and a big part of, you know, with our history and our heritage [00:24:00] on, you know, customer data science and the, the.
You know, hundreds of data scientists that we have and the awesome capabilities that we've built for, uh, media, businesses and retail businesses across the globe. How do we become a little bit of that intelligence layer for retail media businesses to help them tie together, uh, different parts of their business that might be disparate, that don't talk to each other, that prohibit them from actually delivering trusted measurement or gleaning insights that are gonna help a brand invest better, uh, in.
In that retail media business and drive, you know, more performing campaigns. Um, those are the types of things that, you know, we're really focused on. And, and I think it's gonna take, um, you know, a lot of different things to sort of make that come to life. It's gonna take, you know, tech partners, it's gonna, you know, take, um, you know, it's.
Big part of, you know, how, how we work together in, in, in many ways. And, um, yeah, it's, it's a, it's a, I think it that's the, a bit of the next phase of retail media, right? There's standing up channels, there's standing up [00:25:00] capabilities, there's the sort of the operational element, and then there's this sort of analytic and intelligence and insights layer, especially as you think about some of the new AI capabilities.
Can't believe we've gotten this far without mentioning that yet. But that's where I think businesses, even the biggest scaled businesses today, are gonna need to really invest going forward because, um, you know, driving that efficiency and that performance through their business is gonna be really, really important to continuing to drive brand investment and continue to build on that trusted relationship.
James Avery: It's a good, it's a good, uh, like going back a little bit to your, your point around what it takes to run one of these businesses. And I think that, you know, it's like this is a, it is a, you know, you look at Kroger, you look at Tesco, you look at like lots of these big retailers, like it is a significant business to, to drive the revenue that they're, they're driving, right?
Walmart, Amazon, anybody. Um, you know, we still see, you know, I think, I think Kroger and Tesco are probably great examples of, of two companies who really [00:26:00] kind of decided to own this early on, right? And really build out internal capabilities. You know, we still see some retailers just kind of fully outsourcing it.
Maybe sometimes that's the right choice. Like how do you think about that? You know, when, when does it make sense for a retailer to, to really own more of this, build the business, maybe own their own tech, in-house, some of their tech, things like that. Like how, how do you think about that from a Dun Humvee standpoint?
Yeah,
Michael Schuh: it's, it's, um. It's different for everybody. Like that's the, that's the reality. I, I think, um, I think certain retailers, you mentioned Kroger and Tesco and certainly there's some other big ones across the globe as well. Uh, certainly have the size and scale and expertise that they've invested in to build out an in-house, at least certain parts of their capabilities.
Right. Maybe not the whole business, um, but certain, certain aspects of it, right? You know, you've got teams of analysts, you've got teams of engineers, you've got certain things, and it takes a lot to do that I know from, from experience. Like that is a, that is a heavy lift. Um. That's not right for everybody, right?
Even, even [00:27:00] a mid-size, you know, super regional here in the US or others. Um, there might be certain aspects of it, uh, that you want to own yourself, and those are the questions that we ask a lot of times, right? What do you really want to do? What do you wanna stand for? What's your value proposition of the market?
Right? Maybe part of what you want to do is. We're gonna own sales, right? We wanna have this close connection with our merchandising part. We want to be interfacing with brands staying in doubt. We are never gonna sort of outsource sort of the sales and the brand connection piece of it. Uh, but some of the technology, some of the analytics, some of these things, we're gonna, you know, work to integrate that.
Totally. And then there's some retailers where it's just gonna make sense to outsource all of it, right? This is not a focus for us. Um. We want it to still be true to our core value proposition to our customers. Um, that's where I've really seen retailers go off the rail is like when the, when the retailer has the retail business itself has one sort of value proposition and the media business has another and they are not compatible with each other, right?
That is sort of a recipe for, for real challenges. And so no [00:28:00] matter what the decision is and what's right for any individual retailer, um. It, it's, it's doing so purposefully and making sure that you really sort of think through who do we want to be, what do we want, um, our customers to sort of feel and see in this space?
Uh, and, um, and how do we then leverage partners to sort of compliment what we are really good at ourselves. Uh, those are some of the questions that we sort of challenge our, our retail clients and partners on to help them sort of realize, not, again, not get. Two enamored with sort of the noise in the industry on, hey, your media business should be growing 25% year over year.
'cause that's what the industry's doing and everything else. No, let's set your ambitions right and let's figure out what you want to own. What makes sense to partner? How can we bring in the right partners to help you, um, accelerate in the right ways, uh, and, and just get to the right spot.
James Avery: How do, how do you think about the.
You know, I think the, we're creating a lot of retail media networks. I joke that like our, our, my job is, uh, you know, to create, to launch a [00:29:00] thousand walled gardens. Um. But when you think about it, you mentioned like the kind of super regionals, right? Like if you're, you know, if you're another, you know, another big Cincinnati company, right?
If you're Proctor and Gamble and you're looking at the market and you're like, okay, there's obviously, there's Amazon, Kroger, Walmart, you know, then you, you start to go down the list of like, okay, you get to Giant Eagle, you get to a TB, Publix, Wegman's. Like there's, there's this, there's a long list of, of retail media networks.
You know, it could probably be 20 of them in the US just for, just to cover like grocery. You know, do you think like, you know, do are one, are we creating too many of these, are we gonna see like, consolidation or like, how do, how do you think about like this, this problem on the, from the brand side?
Michael Schuh: Uh, the, the short answer is yes, there are probably too many, um, at least too many for every brand to invest in.
Right? And you didn't even get to the broader sort of commerce media networks, right? Outside of core retail when you start to think about, you know, FinTech and, um, you know, uh, there's a student loan company I heard of that started a commerce media network, right? There's all kinds of things. [00:30:00]
James Avery: Yeah.
Michael Schuh: Again, I think, um.
I, I think we're gonna see consolidation. I think we're gonna see some retailers start to outsource a little bit more. We've already seen some retailers, um, you know, borrow, you know, technology from other retailers and sort of jointly go in together. Um, I think we're gonna see some aggregation, some consolidation of, you know, how retailers, especially non-competing retailers, partner together to, uh, drive, um.
Drive, drive, just broader scale, uh, with what you know, they can actually deliver for a brand. Um, you know, I, I have a, a, a friend who's, uh, an agency and, you know, he tells me all the time, he said, why would I go buy, uh, offsite media at scale from a smaller regional retailer when I can already buy. Purchase based audiences and get measurement two or three times over nationally in the us Right, right.
That's, that's the reality. And so maybe there's [00:31:00] a play for some of the regional retailers to partner together in certain aspects or, um, or to leverage some of what, you know, their core strength around in-store media and, and other ways too. And so. Um, yeah, the short answer is I think we're gonna see some consolidation.
I think we're gonna see, um, some retail media businesses that have been stood up, actually just fold more, uh, directly into the merchandising business and become a more core part of the merchandising negotiation. Um, uh, I, I think, uh, I think we may see some outsource a little bit more than they have in the past.
It's almost like there's this, there's so many retailers in this middle now it's like you're gonna make a choice to, yeah. Fold in, um, you're gonna make a choice to aggregate or you're gonna make a ch choice to sort of, you know, outsource and there's combinations of those things and whatever else. But there's gotta be, and, and I think we're probably at it at this point, a tipping point for just, you know, adding things in and, and providing too much choice that, uh, brands and agencies just right, frankly don't have, don't [00:32:00] have time or the investment and money to, to learn how to invest in all these, um, networks, much less actually do the work to do it.
James Avery: Yeah. Well, I think we think about it a lot if, if you like, the best position to be in is if you can be, you know, a top three choice for a brand. Mm-hmm. Right? And so you think about like, you know, you're in home improvement. Like you could, you could list the. Like, who are the top two? Like, really easily, right?
And it's like, if you're in that position for home improvement, you're gonna be, you're gonna be like, you know, in the top three. 'cause Amazon's probably always in that top three too, uh, or Walmart, right? And so it's kinda like, can you be in that top list? Uh, for a given brand, it probably makes a ton of sense to invest when you get down into the, you know, if you're the sixth or seventh, like, it just feels tough, right?
Like if you're, if you're at home and if you're DeWalt or somebody, right? It's like between, between Walmart, Amazon, home Depot, and Lowe's, like, yeah. If or if you're the fifth in that list, like that's a tough position.
Michael Schuh: Yeah. And there's, you know, there's two sides of it. You know, if you're a DeWalt, you've, you've gotta sell your product, you gotta make sure your product's visible on all these commerce [00:33:00] sites.
And, you know, increasingly the definition of a retail commerce site is even getting broadened. Right. That's now there's commerce now happening on TikTok on. Chat GPT on, you know, obviously on Uber and DoorDash and other things too. And so, um, that's, I mean, it's another angle on this as well is there's so much even further choice for where a product can be bought and sold.
Uh, and so, you know, the media's certainly gonna follow that to some extent. Uh, but it's, um, yeah, there's, there's there, it, it's getting a little noisy out there.
James Avery: Yeah. So you, you, you mentioned it, so now we get to do our, our AI AI hour.
Michael Schuh: Yeah.
James Avery: Um, what, how do you, how do you think about that? You know, when, when, uh, how do you think about agentic commerce and, and, you know, people shopping through, whether it's chat, TPT or, or you know, any of these kind of agents, uh, how do you think that's gonna change kind of retail media?
Michael Schuh: Yeah, I think there's, there's. You know, it's, it's always useful, at least in my opinion, to like, take a step back and, and say, what do we actually mean by agent commerce? Because if people feel like people use [00:34:00] the word and then they mean, hey, an agent fully shopping on behalf of somebody, or, you know, just doing research about a product you want to buy, or, um, sometimes even just leveraging one of these tools as you walk around a store, for example.
Understand, Hey, you know, what ingredients are in this or where did this product come from? These types of things, especially you think about grocery. But um, yeah, I think it's certainly, it's gonna have an impact. I mean, you know, the, the AI tools that we now have from a media business standpoint have tremendous potential to help.
Um, help with operations and execution for retail businesses. Help. You know, I mentioned insights earlier. A huge part of what we see as a potential and what we're investing in are the AI capabilities that can sit on top of data and insights engine that help, um, you know, proactively show insights, right?
Hey, you, you're losing with this cohort of customers who have now, you know. Either, you know, switched brands or they've left the category or different things. How do you reengage them, right? And how do you actually [00:35:00] prompt somebody to say, these are the types of media channels that these types of customers respond to.
Here's a suggested campaign for you to actually run through this retailer, uh, to drive, drive the best performance, right? And maybe you got some ability to tweak on it, but almost automate parts of that. I think that's like a huge sort of unlock as we sort of invest in, in those capabilities. I think with truly sort of agentic commerce, right?
Uh, you know, me. Building an agent to shop on my behalf, you know, do my local Kroger shop or you know, my Home Depot shop every week, whatever that may be. Um. It's, um, it's certainly gonna have an impact on, on retail media, businesses to what scale and to what extent? We don't know yet. 'cause it's still a very sort of nascent capability.
Certainly the biggest threat is with onsite media here in the us, which is such a huge. Portion of the business and a huge portion of the profit that these retail media businesses drive if research and inspiration and discovery, and sometimes even the transaction itself [00:36:00] start happening off of another property that takes that impression, that click, um, that, um, you know, that experience off of a retailer's site, out of its app.
And so, uh, certainly lessens the opportunity. Um. Maybe it's a little bit different globally, but certainly that's, that's a, um, a, a a challenge here in the us. I, I think what's interesting though then is that makes it even more important for these retail media businesses in the US to invest in digital capabilities in store, right?
Because that is 'cause. Much more of a friend to ai, right? You're u you might be using AI as you shop the store. You might be using it before your shopping trip. Um, but the more that a retailer can actually diversify and invest in, in-store media capabilities, like we talked about earlier, that then actually offers a competitive moat for them.
Should, you know, onsite media sort of hit a ceiling or actually start to decline at some point, uh, because of, you know, some of the experience moving off of the retailer site. [00:37:00]
James Avery: Yeah, makes total sense. Um, and I think it's, it's, you know, I think. I look at it in a lot of ways similar to, like you mentioned earlier, like delivery, right?
Yeah. And I think there was a, there was a world where everyone said, well, nobody's gonna go to Kroger's website, right? 'cause they're just gonna go to Instacart and, and order, you know, order that way. Um, but, you know, the vast majority of groceries are still bought in store, you know, next is probably e-commerce and then delivery, right?
And so I think it's, it is like just another, it's another channel. Retailers have to now start thinking about and worrying about and how does it affect things? And, and where does, where does it go?
Michael Schuh: Yeah, and it's been really interesting to see sort of which retailers have like invested in bringing those agentic AI capabilities into their native experience.
And then the ones who have very purposefully and joyfully not done that. You know, there there's gonna be pros and cons either way. And again, that goes back to what's right for a particular retailer. What capabilities that they wanna bring forward for their customer. Um, how do they want to, you know, what parts of that experience do they want to own and not.
Um, you know, I feel like we've hit that theme a few times in a few different [00:38:00] ways here, but, uh, that's, that's another, that's another sort of part of it.
James Avery: Awesome. Well, this has been great. So, to, to close out, like what are you, what are you most excited about kind of over the next, in, next couple years in, in commerce media?
Michael Schuh: Oh gosh. Um. I am really excited about the focus in store. You know, we've, we've mentioned, you know, a lot already that, you know, 80 to 90% of the transactions are still happening in store. Um, it's, um, you know, it's, it's an environment where I think the customer has to be even more at the forefront of the decisions that are made.
Right? I go back to how do you be useful to a customer? Um, how do you create an experience that makes people wanna shop there every week? That, you know, for the customer who's dragging three kids around the store and you wanna help them weigh fine and get through faster, fantastic. Right. But the customer who's doing a lot of research and considering four different tools as they, you know, walk through the store and, you know, wants to do a little research on that, I, I think that's gonna be a huge, um.
A huge [00:39:00] focus kind of going forward. Uh, and I'm glad we're sort of at this moment where we're having this conversation now and we need to unlock. I, I think what's interesting is brands and agencies especially still don't understand or, or pay enough attention yet to the true scale that in store media capabilities could offer.
Um, the, the volume of impressions, the volume of impact could. Wharf, uh, what is, you know, onsite media today, right now? Will it, I don't know, will be valued the same? I don't know. Those are all things that we sort of need to work out, um, and how does measurement happen and how you deliver on some of those things.
But, um, that, that's, um. I've seen it work so well with our clients globally in Europe. I'm, I'm really excited for what that brings here in the us.
James Avery: Awesome. Well, Michael, this has been great. Thanks. Thanks for coming on.
Michael Schuh: Thanks, James. Thanks. Appreciate the, uh, conversation. Thanks for having me.
James Avery: Thanks for tuning in to unlocking Retail Media.
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