retail news in context, analysis with attitude

In a memo from Albertsons to CPG vendors, the retailer has laid out expectations for how suppliers will support its e-commerce initiatives.

The message, signed by Geoff White, the company's Chief Merchandising Officer, and Chris Rupp, Chief Customer & Digital Officer, says, in part:

"Our customers are continually becoming more digitally engaged as grocery shopping and lifestyle habits have changed.  They are consuming more digital media than ever before including placing their weekly grocery order online, finding the perfect entertainment for family movie night, or just unwinding with social media or web browsing.  It is important we reach our customers when and where they are most receptive to drive an overall fun and exciting omni-channel experience.  Customers who are digitally engaged with Albertsons Companies tend to buy +33% more.

"Our off-platform Albertsons Performance Media tools and our new on-platform ecommerce tools are the most effective ways to drive sales of your brands and products with our digitally engaged customers.  These tools are our best performing marketing tools offering CPG partners a 5+:1 incremental sales ROI.  They are also directly tied to our 1st party purchase data providing precise targeting and closed-loop sales measurement based on transaction.  Data-driven closed-loop marketing is the future of performance media, a top priority for us, and the best way to deliver personalized relationships, amazing experiences, and marketing efficiency.

"As we move into FY 21, we need your team to focus plans more on digital media with Albertsons.  We are establishing a new CPG digital media target of 0.75% of annual sales to be invested into our performance media and ecommerce platforms.  This is a joint initiative between our merchandising and marketing teams and supported by corporate and division leadership.  We expect all CPG partners to achieve the target in FY 21, but the funds must be incremental and cannot cannibalize trade funds.  Your progress will be tracked, shared with merchandising and marketing leadership, and factored into ongoing merchandising and distribution decisions.  As an additional incentive, any incremental FY 20 investments will count toward your FY 21 goal."

KC's View:

The recognition that e-commerce is an ever-growing component of the business, and then translating that into consumer-focused action, seems like the right - and inevitable - way to go in 2021.

Though I can tell you that Albertsons is likely to get some blowback on the "incremental to trade funds" part of the memo.  I know this because that's why MNB got a copy of it …