A Retailer’s Guide to AI Grocery Retail Media Networks

Competitive advertising in connected ecosystems

From personalized product recommendations to CPG promotion software, AI has become an integral tool for modern grocers of all sizes. Despite initial concerns around AI - regarding how it works, what it accomplishes, and costs - many retailers now leverage some form of the technology in stores. In fact, many retailers are driving impressive resultswith solutions like smart shopping cartsand AI digital storefronts.

As AI's footprint grows in the grocery sector, industry trends point to a more connected future where grocers provide tailored services that increase consumer engagement. One powerful application of AI is in grocery advertising, where grocers forge deep connectionswith their consumers through personalized recommendations. With more than halfof CPG brands feeling optimistic about AI's future in advertising, there's never been a better time to explore this opportunity.

Grocers are using AI to keep consumer interests top of mind, but they're also leveraging the technology to drive loyalty. Retention is a growing focus for retailers, especially in omnichannel spaces where consumers are more likely to encounter promotions- and swap loyalty for a competitor. This is where AI grocery retail media networks come in.

Grocers use retail media networks to sell advertising space to brands, leverage their first-party data, draw in new revenue, and offer more personalized advertisements that drive consumer loyalty. As grocers adopt retail media networks, they're expanding their knowledge in the arena, and exploring how a network powered by AI can facilitate win-win-win situations for retailers, advertisers, and consumers.

So, let's discuss AI grocery retail media networks, their impact, and how grocers are already using them to drive results.

How AI grocery retail media networks perform

To understand how retail media networks deliver value for grocers, it's important to understand how it works for advertisers. With this knowledge, you can meet advertisers where they are - and have informed conversations about your partnerships.

AI enhances standard retail media networks through machine learning.At a glance, machine learning refers to AI's ability to comb first-party data and generate relevant suggestions that advertisers can act on. Those suggestions are typically supported by massive amounts of data, such as grocer-owned shopping analytics. And, in a retail media network, they're optimized to drive return on ad spend (ROAS) for advertising partners. Since ROAS is highest when consumers engage with ads, it's crucial to base campaigns on relevant data - and machine learning empowers that capability.

Consider Carrot Ads, our AI grocery retail media network. Carrot Ads unlocks optimized bidding capabilities, in which AI places bids on an advertiser's behalf. Because Carrot Ads integrates with a grocer's first-party data, it can identify successful campaign tactics and streamline end-to-end advertising management - all without manual inputs from an advertiser.

Optimized bidding is just one perk of networks like Carrot Ads. Through machine learning, AI can parse consumer shopping histories and collect an aggregate of product purchases, offering personalized recommendations that matter to consumers. AI grocery retail media networks can also support campaign optimization, which many CPG advertisers see as a crucial element of grocery's future in advertising.

Grocers who tap into AI grocery retail media networks connect to an ecosystem where advertisers are already active - and looking to engage with consumers. The resulting relationship between grocers and advertisers has the potential to be mutually profitable.

Bringing AI grocery retail media networks to stores

With KPIs like retention in mind, you may be wondering about the onboarding processfor an AI-powered retail media network. How do retailers choose the right network, and what features do they prioritize?

Let's take a closer look at the onboarding process and explore tips you can leverage to consider a network for your stores.

#1: Determine your goals

What KPIs do you want to target with an AI grocery retail media network? Consider how the technology can help you boost retention and revenue - or empower you to keep pace with large-name retailers. Conduct some preliminary research to explore your options. Many solution provider websites, for example, offer handy metrics and case studies that quantify a network's impact in market.

#2: Prioritize personalization

One of the most impactful perks of AI in a retail media network is its ability to personalize advertisements at scale. Since machine learning capabilities enable deep - and widespread - historic shopping data analysis, grocers who opt for AI-powered solutions can appeal to their consumers on an individual level. As a result, consumers are more likely to engage with advertisements. The benefits that follow - incremental spend increases, advertiser ROAS, and customer satisfaction - are holistic.

#3: Choose solutions with an established grocery partner

Retail media networks without AI or deep industry ties can pose blockers for grocers trying to activate in new spaces. Consider opting for a retail media partner with meaningful industry connections - and a powerful dedication to grocer success.

Whether you're just beginning your retail media network journey or looking to elevate your strategy, AI is a powerful lever for future proofing advertisements. Instacart prioritizes scalable solutions like AI, retail media networks, and connected productsso grocers can maximize their investments and boost retention. Our retail media network, Carrot Ads, connects grocers and advertisers with:

• AI-powered insights and product recommendations
• Ad personalization at the individual level
• Closed-loop measurement
• Digital, physical, and omnichannel advertising surfaces
• First-party data visibility
• Optimized bidding
• Seamless campaign management
• Media Rating Council (MRC) accreditation*

Grocers and advertisers using Instacart advertising services are already seeing incremental sales liftsfrom their investments. And, as grocers continue prioritizing AI in advertising, Instacart offers services that connect with other solutions, like Caper Carts, to forge a powerful, connected grocery ecosystem.

* Data as of June 25, 2024

Elevate your advertising strategy with Carrot Ads

Ready to take the next step? AI-powered grocery retail media networks are already driving results for grocers in market - and Carrot Ads is a powerful contender. With Carrot Ads' nationwide network of established advertisers, you can activate a new revenue stream for your stores and drive consumer retention in omnichannel spaces. And, with seamless integrations to Instacart Connected Storesproducts like Caper Carts, Carrot Ads drive consumer engagement at scale.

Connected Stores products bring together Instacart's modular in-store technology and connect retailers with Instacart Platform's e-commerce solutions to help them deliver unified commerce experience.

See how Carrot Ads' integration with Caper Carts can elevate your in-store experience today!

If you're interested in Instacart Platform technology for your grocery business, click the button below to submit a Retailer Inquiry form.

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