Retail Fluent Media Network sees big business in on-site digital advertising

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Grocery stores are busy places, welcoming thousands of shoppers daily. Given the foot traffic, supermarkets present a golden opportunity to reach a potentially massive audience at a time when they’re already looking for ideas about what to put into their carts. And as in-person shopping has returned to pre-pandemic numbers, industry experts anticipate more retailers will incorporate technologies, like autonomous inventory scanning robots, AI-powered shopping carts, electronic labels and digital screens.

Currently valued at about $8.5 billion in the U.S., retail media networks are a small – but rapidly growing – area of total retail spend as advertisers seek to take advantage of in-store audiences and reach consumers closer to the point of purchase, according to a recently released report from insights firm Grocery Doppio.

Under these types of arrangements, digital advertising is operated by retailers who assume the role of media channels by publishing ads on their own assets – like websites, digital screens and social media – or third-party publishers.

In recent years, replacing traditional signage with digital screens has gained traction in supermarkets for a range of uses, like navigation, product information, cooking tips and recipes. Besides providing a more eye-catching display, it offers a way to constantly curate and target promotional messages – whether by geography or time of day – that can be tracked by how many impressions or the number of customers in a vicinity.

As a result, grocers are seeing benefits such as a boost in incremental sales and additional revenue.

A 2022 survey of 11,000 shoppers found that 50% said digital screens encouraged them to make a purchase “right there and then” and 77% said the technology was either “very” or “quite” informative.

In addition, the technology can be helpful for grocers looking to secure major partnerships. According to the analysis, 93% of CPG brands want the ability to tie in-store and digital retail media together. They’re also seeking greater measurement accuracy for their marketing spend on grocery retail media networks, the report said.

Another study on the impact of in-store digital signage found that 4 out of 5 retailers reported an average sales increase of 33%. That’s why supermarket executives are expected to make retail media monetization a priority, according to Grocery Doppio’s analysis.  However, nearly 80% of grocers surveyed by the firm say they don’t have the talent needed to build and scale media businesses, so a majority expect to adopt white-label or third-party solutions to help develop such setups.

Amid the backdrop of the ever-evolving industry, Paul Ruitenberg, a longtime retail design guru from New Jersey, has his sights set on this fast-growing area.

As managing principal of Retail Fluent Media Network – an Elmwood Park-based dynamic digital out-of-home media company – Ruitenberg is trying to help stores make the most of their space by creating inspired customer experiences through cutting-edge technology.

What’s in store?

The Wayne native began his career 45 years ago, in his father’s basement with a business that moved from decorating store windows to crafting unique interior environments for supermarkets.

The decision to start his own venture came about a year after he dropped out of Fairleigh Dickinson University, where he was studying to become an accountant. Instead, he decided to take a cue from his father – who headed up visual merchandising for Thom McCan shoe stores in the region – and focus on retail design.

The two went on to build what would become a $18 million window display company in the metropolitan area, working with clients like the New York Stock Exchange, World Trade Center, Madison Square Garden and Port Authority of New York & New Jersey. They also took on jobs with retailers such as Prada, Saks Fifth Avenue and Bloomingdales.

In the late 1980s, a job creating window displays for The Food Emporium in New York City put Ruitenberg on the radar of executives at the now bankrupt Great Atlantic & Pacific Tea Co. The formerly Montvale-based supermarket chain had recently acquired The Food Emporium banner and wanted him to design a new produce department at the A&P store near its headquarters.

When the location posted a sales increase, A&P hired him to redesign 600 stores. After that, he was brought on to handle planning and design for all A&P supermarkets. Over the years, Ruitenberg designed thousands of supermarkets worldwide, working with banners like ShopRite, Kings Food Markets, Uncle Guiseppe’s, Giant Foods and Foodtown.

Reflecting on what drew him to the food retail space, Ruitenberg said it was mainly because he “was tired of the rollercoaster of the economy.”

“Great budgets when things are going well and no budgets when the economy tightens up. Design always takes the first hit. I love the grocery business because, while not unaffected by the economy, everyone has to eat. It was also an industry where I felt I could change the look and feel of traditional stores at the time and certainly enhance the customer’s shopping experience as well as grocer’s revenue,” he said.

“If you give somebody a well merchandised store with really warm colors, the dwell time in those shoppers increases. And when you do that, obviously the basket increases, which is what we want for any of our clients,” he explained. “But back when I started in supermarkets, it was just white walls and they had the big letters on the wall above each department, like produce or deli … And you look at all the stores now, including companies like Whole Foods, which I worked with for a while, it’s almost like a department store in terms of the way we section off departments. We just want to make it warm and inviting.”

“Visual merchandising does definitely make a difference when it comes to the basket size and even the profitability. You can get a little bit more for those groceries, as well,” Ruitenberg said.

Visual merchandising does definitely make a difference when it comes to the basket size and even the profitability.
– Paul Ruitenberg, managing principal of Retail Fluent Media Network

Two years ago, Ruitenberg and his longtime business partner Gustavo Avila launched a turnkey retail media and adtech offering at their retail innovation, design and décor firm, Retail Fluent Inc.

Catering to independent grocers, mid- to large-scale chain supermarkets and convenience stores, Retail Fluent Media Network provides installation and maintenance of modern, ultra-bright LED screens; placement of screens in retailers’ front windows and other high-traffic locations; an integrated ad and content management system; a programmatic demand-side platform, a software tool that allows advertisers to buy ads; and certification from Geopath, an independent organization that offers audience measurement and analytics for out-of-home advertising.

By the end of 2024, RFMN will own and/or operate more than 5,000 screens across 1,400 stores. That client mix includes major discount grocery chain Save A Lot, Asian supermarket banner H Mart, independently owned Key Food Stores and marketing cooperative Alliance Retail Group. With a sales goal of $25 million for 2025, Ruitenberg believes it’ll be a “breakout year” for RFMN.

Avila said, “Retail Fluent Media Network provides digital screens throughout stores to give retailers and consumer packaged goods companies the opportunity to share product information, relevant promotions, and present shoppers with adjacent product options.

“We are creating a marketplace for local and regional retailers that was only previously available to the top players in the industry – Amazon, Walmart, Target,” he added.

Given the “strong demand and ongoing growth” of the service, Retail Fluent announced in September it was spinning the group off into a separate entity.

“Supermarket and convenience store owners have realized the value their in-store real estate can produce not only in product sales, but national advertising revenue,” Ruitenberg said.

“Some store owners are telling me they are generating more revenue through advertising revenue than product sales. It’s an amazing time for the grocery business because the number of retail media networks is expected to double in the next 18 months and nearly 70% of grocers rate investment in retail media networks as a high priority,” Ruitenberg said.

He went on to say, “In-store retail media ad spending will exceed $1 billion by 2028, which is a profit center local and regional stores couldn’t dream of tapping into – until now.”

After conducting a test of the 22 stores in Philadelphia where RFMN has digital screens, Ruitenberg said he knows they can be a valuable source of revenue.

“At 11 of those stores, we mixed in private label items and 11 stores we didn’t. Out of those 11 stores, the lowest increase was zero, the next one was 4% lift and the following one was 10%. The biggest one, which was a frozen pizza, was 14% lift on the stores that had it versus the stores that didn’t,” he explained.

RFMN Chief Commercial Officer Joni Elmore said, “We’re thrilled that our retail partners and advertisers have already realized tremendous value from our ever-expanding ad network. We have strategic plans to continue expanding our footprint and capabilities, providing a net new revenue stream for retailers.”

Elmore continued, “Retail Fluent Media helps reduce traditional paper and poster waste and modernize their location with more dynamic, timely promotions while at the same time providing advertisers, predominately CPG brands, to reach new customers in the most sought-after DMAs.”

A banner move

Ruitenberg became intrigued by the technology a few years ago, when he noticed a competitor putting digital screens in store windows. He declined to say which company that was. “When I talked to him, he said they were doing it to replace the traditional posters, like Boar’s Head, $8.99 a pound. And, instead of having one item price, these digital screens were rotating six item prices on every screen,” he recalled.

Ruitenberg added, “Also, I always hated those posters in the window. They’re disgusting. They’re always crooked and get flies in between them. And they forget to take them down when the sale’s over … There’s also internal problems when the store has to give customers the sale price because it’s in the window and the sale is over.”

While the image quality wasn’t great on these digital screens, Ruitenberg believed the concept was “genius” and a “great idea.”

“I talked to him about it, and said, ‘I’ve got an idea of what I want to do with this. I would love to buy this idea from you.” I told him I’d make him a minority partner, but I really wanted to buy the company,” he said. “So, two-and-a-half years ago, we bought the screen division … and took on 800 screens at 200 supermarkets.”

At the time, he envisioned the screens as an opportunity for CPG giants like Kraft, Unilever and Mondelez to reach shoppers. However, in order to do business with a company like Coca-Cola, Ruitenberg had to make sure there was a way for brands to track ads. So, they had to get every digital screen certified for audience measurement and location by Geopath.

When Retail Fluent Inc. announced the December 2022 kickoff of its retail media network and service offering, it already had an established presence in over 300 markets with 1,000-plus screens that were optimized for dynamic and static ads, as well as promotional content.

RFMN believes a unique revenue-sharing model, as well as state-of-the-art, high-fidelity digital screens, sets it apart from others.

Ruitenberg explained, “The whole premise of the business was to offer a better option to weekly paper circular poster programs that many stores still participate in. For example, a poster costs $25 each to produce, including delivery plus $7 in labor to hang it in the store. Digital media is a more sustainable, dependable, bright and cleaner solution offering six times the items as opposed to one paper poster and costs less money per week.”

When it comes to the best locations for in-store digital signage, Ruitenberg said the front windows are ideal because customers and pedestrians can easily see them – giving it a higher cost per mile.

“I think it captivates attention because it’s not something they’re used to seeing,” he said. “We put them in the front of the store because you want to get their eyes focused on what they’re shopping for and we put their item price. People are always looking for those specials. And then we insert the ads in between … That’s how you get people to pay attention because they’re already looking at those specials.”

“We change about 11,000 pieces of content on our screens weekly,” he said. “… There’s four screens per store, six items per screen. So, we take 24 of their top weekly ads and put them onto those screens so it correlates with exactly what the front page of that circular is.”

RFMN is starting to develop screens for store interiors, but Ruitenberg said it’s being done “very carefully” because “there are some big chains that failed with it.”

“I think we have a better handle on it than other media companies because of our knowledge in the supermarket industry,” he said. “We understand grocery, we’ve been doing it for 30 years. We know their pain points. We know where people will look and what attracts attention.”

“I’d probably put two screens over two select end caps. And maybe two to four screens around the produce department and a few screens in deli, bakery and seafood. And maybe another screen in a value area, but that’s it. I wouldn’t be flooding these stores with 20 screens – it’s just too much,” he explained.

“A lot of media companies currently are going in, they’re just flooding the stores with screens, which is absolutely the wrong thing to do,” he said. “You should very carefully position the screens so that it’s not an overload on the eye.”

Ruitenberg went on to describe his most hated screen placement – at the checkout. “One of my biggest competitors, Grocery TV … They have 21,000 screens and most of them are at the checkout. They’re now looking at putting screens inside the store and rightfully so. I mean, at checkout, yes, the dwell time is there. So, people are going to see those screens. There’s nothing else to do … But really the only thing that they’re going to be selling and probably the biggest advertising on those screens are the candy selections that are right in front of them,” he said.

Looking ahead

At Save A Lot, the Missouri-headquartered chain recently partnered with RFMN for its 750 independently owned and operated stores across the U.S. Under the agreement, Save A Lot will use digital window signage to promote weekly sales programs, special events and promotional items. RFMN noted that the company already has 400 screens in almost 100 stores and plans to double the technology by early 2025.

In addition to next-level digital signage, Retail Fluent Media Network provides end-to-end services for Save a Lot. For instance, RFMN manages all content shared by the retailer and works with a network of artists and graphic designers to develop and launch dynamic ads across the store network.

Matt Jamison, director of field support & media at Save A Lot, said, “Owners and operators using them report they capture customer attention and ultimately are driving traffic and boosting sales in stores. We’ve seen great results in stores where they are in use and look forward to introducing the technology into more markets.”

Ruitenberg believes RFMN will “absolutely” be a national player within the next five years. “I don’t want to guess on how many screens, because we will be interiors by then,” he said.  “So, we’ll probably average, I would say at least a dozen screens per store between the interior and the exterior,” he said, noting, “There’s 24,000 independent markets in this country.”

“And then also, it’s helping our decor business and our design business tremendously as well. So, as we’re expanding into new markets and media, we also pick up potentially design and decor for those stores,” he said.

Looking ahead, Ruitenberg said, “We’re just really excited to be a part of this massive growth. Digital out of home is exploding and I’m glad that we’ve been given the opportunity to do it … We are extremely excited about the future of both companies and look forward to helping our customers take advantage of this exciting new marketplace.”