Chemist Warehouse deal spotlights retail media riches
Retail media spending in Australia is surging into the billions. That critical mass is diverting potential ad revenue away from incumbent media businesses.
In the Australian advertising market, the demure retail media category could pose a significant threat to the revenue bases of the country’s largest media companies. By one estimate, retailers threaten to pry away as much as $1.1 billion in potential ad spend that would have been destined for Australia’s ASX-listed media companies. And Chemist Warehouse is among the category’s biggest players.
As Chemist Warehouse readies itself for backdoor listing on the ASX, following a proposed merger with Sigma Healthcare that will create a $8.8 billion retail juggernaut, many column inches have already been devoted to the frenzy that has taken hold of Australia’s investment community. But the deal also underscores the growing threat major retailers, and their respective advertising businesses, pose to incumbent media businesses in the Australian advertising market.
Retail media is a category Chemist Warehouse already has a firm grip on. The pharmaceutical chain’s sprawling advertising footprint includes in-store screens and printed displays, as well as a content arm, House of Wellness, which is sold as a quarterly magazine alongside News Corp’s metro newspapers, as well as a content partnership with the New Zealand-based publication, Stuff, and even has its own television show on the Seven network.
It also uses customer data to target shoppers with ads. The first-party data provides suppliers, whose products are generally stacked on Chemist Warehouse shelves, insight into the effectiveness of any given campaign with granularity that traditional media companies often struggle to match. It’s an offering that most media planners are keen to get in on.
