From Store to Digital: Kingfisher's Omnichannel Retail Media Journey

Speaker A: Welcome to the Retail Media Moguls Podcast brought to you by Platform 195. We share trends and strategies across retail media to help you accelerate your brand growth. I'm your host, Stuart Adamson. Welcome to the Retail Media Moguls Podcast. I'm your host, Stuart Adamson, founder and CEO, uh, of Platform195. Today we're excited to welcome Danny Satin, the group head of retail media and digital platforms, uh, at Kingfisher plc. Danny is a seasoned leader with over 14 years of experience driving innovative digital product strategies and e commerce initiatives across renowned organizations like Booking.com and AVA English. His expertise in navigating complex organizational structures and his strategic vision have made him a pivotal figure in enhancing retail media and e commerce operations for some of the biggest names in home improvement and diy. Danny's career is testament to his passion for leveraging first party data, optimizing omnichannel strategies and leading cross functional teams to deliver exceptional results. And with a proven track record of scaling operations and fostering business development, he's well versed in turning ideas into impactful strategies that drive growth. Today, Danny is going to share his valuable insights on the evolving landscape of retail media in the DIY and home improvement sector and offer a glimpse into the future of this dynamic field. Welcome to the show, Danny.

Speaker B: Thank you, Stuart. Thank you for an amazing introduction.

Speaker A: That's okay. It was a long one that one. Listen, we were just actually talking just before we started about your background@booking.com. tell me about that first and how you suddenly got into Kingfisher and the evolution of that.

Speaker B: So I think that booking was the pinnacle of me understanding, okay, this is where I come from in terms of advertising because my background was in advertising. And then when I got into a full digital data driven company and understanding how can they leverage that data not only to activate their customer to drive more sales, but also how can we leverage that for partners to utilize and activate that data and do co op investments or co op campaigns. So that's how I started realizing, okay, this will become something that, that will evolve into a revenue, uh, stream that will drive companies into another type of business, which is not natural. Hence this is retail media we're talking about today. And understanding that profiling and doing segmentation of customers can unlock many on tap opportunities. Right. So ebay is through an offline channel or on site or through your CRM channels. We were delivering those capabilities@booking.com just to drive more bookings with partners. And that was the mandate that we had at Booking back then and how it started to form into now my natural space in Kingfisher in retail media.

Speaker A: So when did you join Kingfisher?

Speaker B: That was almost 40 years ago. And it was a very interesting moment because we were already stepping into the pandemic and and that was a trigger in Kinfisher to accelerate digital. It was an exciting moment to join basically because we had many stores that were closed. So we accelerate the way we expanded our choices to our customers through our online channels and that was the motivation to launch our marketplace model. Right. We had it in our plans but the pandemic accelerated this. So how do you offer more what you have in stores online through third party sellers? And that was very exciting. Now we have four marketplaces live across all our operating companies and we see that performing very well.

Speaker A: And which ones are those?

Speaker B: Bnq, Casta, France, Casta, Poland and Brico in Spain and Portugal.

Speaker A: Wow. So when you joined was that a pure retail media role? Had they actually decided that's what they wanted to do or did you decide to join as something else? And then they went hang on, there's something in this retail media thing.

Speaker B: This has been an evolution. Right. So part of increasing our digital participation in sales started with Marketplace. But back then we defined our next big bets right in digital. One of those was retail media. But we needed to secure our E commerce platform, make it scalable, make it data driven, ready for engage with marketing channel and how it was connected to our stores, which is still a huge chunk of our sales go through stores. Especially when you talk about DIY and home improvement. So when the moment was right, probably almost two years ago, it's when we said okay, let's start our uh, retail media ah, adventure. And here we are, we have three live retail media networks, two Morticon in our operating companies and it's becoming a much more, let's say amazing workload to launch but very exciting at the same time. Understanding how a retail media network can be localized in each of our markets.

Speaker A: Let's take a market, let's take the UK for example. Tell me about that retail media network. What are you now offering to partners? And presumably it's B and Q here.

Speaker B: Bnq. Correct. So BNQ right now is, has it's initial capabilities in terms of on site. We're trialing in store and off site. But just for us to test, there's something that we are very conscious is we know that it's a high margin business but we first need to understand how can we provide the service to uh, our Partners and brands, sellers. And then how can we build the operations around that? Because in the end it's a new thing within Kinfisher. The more I talk to other retailers, the more I talk to people like you, the more reassuring we get that we're doing the right thing. So right now we have been live for almost a year in bnq. I can tell you that we have exceed our expectation in terms of the roas that we're delivering to our brands and vendors. We're going above the benchmarking. Amazon, which proved the vertical of DIY and home improvement, make it more out of every brand and vendor out of each pound that they invest versus Amazon for example. And that's a true magic of our special retail media network in our industry. Right. Also we take advantage of our leadership position in the UK and when I compare it to our position in France for example, where we don't have that leadership position yet, we need to work even more for our pounds to be invested in uh, our retail media network. So that said, we have our on site capabilities, trial and install, trialing off site and overarching data monetization at the same time.

Speaker A: Well, let's talk about that data piece. How are you incorporating first party data and third party data if you are into what you're offering to partners?

Speaker B: Yes. So we are very proud of everything that we have done the past two years in our data platform. So I can tell you that right now we have visibility of all the availability, pricing, stock levels, sell in sellout data. And we said this is the first dimension that we're going to tackle to monetize that, to optimize campaign. So if I know as a brand or a supplier, I know the availability up our stock in specific locations and in our online platform, then I will be able to react much more consciously about every pound that I invest. So we have been developing those capabilities and trial with first, uh, let's call it 10 to 15 brands and now we are expanding that into much more sophisticated dashboard and activation of that data. So now a brand and a vendor in BNQ and in France, in Casa France can have the visibility of those KPIs and activate campaigns accordingly to their stock and sell in, sell out data. The next adventure for that will be customer data. And how are we pulling our customer view into that setup where a uh, brand inventor will not only be able to optimize their campaign based on their product, but also who are they targeting within our customer base? And that's our obsession right now.

Speaker A: You've set up a self serve platform for your partners to come in and see.

Speaker B: Correct.

Speaker A: And what's powering that? Have you built that yourself or is that powered by a third party?

Speaker B: So we have built our own data lake and our own data platform. Then the way it's been visualized, it's powered by power BI capabilities but in a much more sophisticated way which is our second stage of this. We have partnered with a company called Convertio who are bringing all the expertise from Dunn Humby to utilize that data and showcasing it to the fans and vendors so they can do a self service. So it's a web app in the end where brands and vendor can access to their own data, benchmark it within the same category for example and what's the market share of your products versus the top main competitors that you have. Hence you will be able to activate that campaign through retail media capabilities.

Speaker A: Brilliant. And then how are you serving on site ads? Are you? Well there's two bits that you talked about. One was data monetization. Let's start with that. Are you pushing the data downstream or is it at the moment just there to optimize campaigns with the moment?

Speaker B: It's just for optimization of campaigns. Our aim is to have a uh, full stack data capability. So from pulling out data, understanding and getting the valuable insights. But then how it's connected to all our platforms that in the case of on site for example, we have partnered with unlimited and citrus ads so they are our partners for on site how we will connect that to feed those insights and activate that data. So that's our end goal next year.

Speaker A: Fantastic. And then how about the in store piece then you talked about trialing that. Tell me how you're trialing that and what's going on there. Because obviously you're very heavily store LED and people still like to go into the stores. Tell me about it.

Speaker B: This is probably the most fascinating piece of my work right now because probably you and I, we have the same vision of uh, how a retail media works from a digital perspective. But when you go in store it's a completely different world. You need to take into account so many variables that uh, for example when you build up a platform, you build up your requirements, who is the customer, what will be the journey, how do you, the checkout, all that journey. But when you are in store the variables are another, what's the food traffic, what type of products are we dealing with? So you understand how the customer moves around the store or even if you go down to the details of what type of medium you want to place there. And how does that play with the type of product that you have? Let's say that you put a screen at the foyer of a store, but you will see people coming in and out. But if you are purchasing, let's say a thick massive product, that product can go into the screens. Right. So you don't want that to happen, which is something that probably you don't find in groceries, retailers because they don't deal with that volume product. So those kind of details are the ones that we're mapping out. We're testing different installed screens. But the question is how we measure and how we track performance of those campaigns that we are running as a trial right now. We discuss in our initial conversation eye tracking, camera feeding into the profiling of the customer that we're visiting. But we want to go beyond that. We want to understand how we get the opt in of the customer that it's installed to be tracked because we are over compliant at the same time, but then having a much more passive approach of the customer that it's in there. So we know that they are engaging with the campaigns without asking them to do anything. Right. And this is connected to my previous experiences is that uh, how can you utilize apps and our apps so we know our customers, we can know when they are in the store and we can know in which type of location they are in the store and at the same time we know what they purchase. So we will know what type of incrementality are uh, we driving based on the campaigns that we have. And that's kind of like the end game for us when we talk about in store how we connect that to an omnichannel retail media value proposition. That's the basis of data. So again if we go back to that initial point, when I know the availability, I know the stock, I know the selling and sellout data, I will know through which channel I have sold that in bnq, for example. That's how we connect the journey of an Omni channel retail media network. That's why our obsession is data.

Speaker A: It'd be an amazing journey that. So that technology that you're putting into the stores, is that being driven by retail media or is the business already doing that and then you're leveraging it?

Speaker B: This is a very a question with intention because you know that within a retailer when you touch any trade marketing activity, it's very disruptive. The good thing is that we have been partnering very well with our commercial team, with our traders, with our buying team, because we Know that they have a big chunk of that trade marketing activity. Especially when we talk about in store activities, sponsor products in our E commerce that's another world easy to justify in front of our commercial teams and traders. They but let's talk about homepage banner where we are pushing our rebates and promos but install when you activate a promotion as well. The magic of our conversation with our commercial and trading team has been we can leverage that with our own capabilities. So you will be able to report in real time the performance of that and not waiting 30, 60, 90 days to get back to your brand and vendor and show what you have approved in terms of incrementality. For example, what we're saying is that with the retail media we will be able to unlock faster budgets and much more frequently in their media plans throughout the year. And that has work especially because when we talk about for example marketplace and you put your 1P business and your 3P business together, that also makes the commercial and trading team motivated to engage much more with friends and vendor and offer than retail media services. Because the competition is getting tighter, CPC are increasing in our POP pages. Hence you will have to be active in your trading plans to offer retail media services. That that's how we are putting it together.

Speaker A: So that whole conversation around the trade sort of your contract, your product buyers at the moment, is that is the strategy to try and increase those JPP budgets or is it to drive incremental from consumer budgets and then how are you doing both those two things if they are both?

Speaker B: Again this is a very intentional question. That means that you know about retailers. So at the beginning we're treating this as incremental so on top of the budgets that we can get. But we already see warranty brands and vendors who already see the value of uh, retail media and they are starting to include that in their trading marketing budget. So let's say at first entry value proposition it's treated as an incremental on the budget. But after that first stage it becomes a standard in their trade marketing budget. And I give you an example that it's not in the UK but in our upright company in France, in Castorama France where we have been live for a year and a half with our retromedia network. When we started we were already pass beyond the trade marketing budgets for the year. So it was hard to get retail media budget from that trade marketing budget. We tested in a very beneficial conditions for a brands and vendor. They saw the benefit of it and right now we are already including their Retail media budgets for next year as a secure activation.

Speaker A: Yeah. So are there still a uh, suite of separate opportunities that your partners are buying as part of their original trade thing that sits separately to what you're now offering from a uh, digitalized datafied retail media solution?

Speaker B: Correct. I mean in the end look for us this journey. Yeah. And we have another mix into this potion that we're building is that uh, we have our own exclusive brands. We own brands that play at the same time with 1P vendors, 3P sellers and our brands. So it's a master operation that we need to put together. But in the end our message to our 1P and 3P sellers is that competition is getting higher but we have the customers. We can give you quality customers that will uplift your conversion. If you do this type of activities that can get you real time performance tracking, hence you will be able to optimize and is on top of that, you put the data, uh, and transparency as an overarching to manage that relationship, then you have the perfect setup to leverage all the budget that you can get from brands and vendors.

Speaker A: Yeah. And obviously your retail media organization is designed to really help those third party brands. How much pressure do you get from the business because you have your own brand activity? How much are they saying? Well, we need some of that space, we need to carve that off for us. How are you managing that?

Speaker B: Correct. So here is where we are very protective of our business but at the same time we're over compliance of how we trade with our brands and vendors. So the good thing is that within Kinfisher and within our operating companies, the team that owns our brands are completely separate. So it's a way of treating our own exclusive brand as an additional brand and vendor that it's trading in our E commerce and in store. And when you add retail media, this is basically my past year has been training them, educating them, um, giving them the right tools to operate retail media activities within our company. So for us it's like a lab where we test things. So I have an own exclusive brand team that need to understand how they operate retail media activities. So before going into the market with our brands and third party sellers, I test those with our own exclusive brand and say okay, I can streamline that type of adopts or that type of CPC yield management into 1P and 3P sellers. And that's how we build a proposition in a fair game when everyone is competing for the same sponsor product. Start. Right.

Speaker A: Yeah, very good. It's always a testing one that one and how you, you know it's a piece of stakeholder management that's definitely required, correct?

Speaker B: Yeah, a lot, A lot.

Speaker A: So tell me about the onboarding of partners then. So if you can tell me how many partners have you got and how many are uh, actually starting to uh, are uh, using your retail media network and then also how are you going to market, how are you engaging with them and bringing them on board.

Speaker B: So across all our group, meaning across all our operating companies that have a retail media network running, in the past year we have onboarded more than 400 brands and sellers. This is a combination between 1P and third party sellers. The onboarding and the strategy that we're following is for one P vendor we tend to do managed services. And this is the main difference because when you talk to a uh, grocery retailer or a um, much more let's say veteran in retail media activities such as Tesco or Sainsbury, the brands are know already how to operate within a retail media network. In DIY and home improvement we're not there yet. So we need to get provide the managed services so they can get their assurance uh, of how can they build later on those capabilities internally. But in the meantime we are offering their managed services and that means from the setup of how the platform works of course, the contracting, the media planning and the activation of that campaigns and the optimization of those campaigns as well. When we talk about third uh party sellers the approach is completely different. We know that the budgets are lower but much more granular. And we know that those sellers are already selling and trading in platforms such as Amazon or in CDiscount in France or in Allegro in Poland. They already know how that operates and they do a self service approach. Hence we can expedite the way they go live with a campaign. They know how to do yield management of cpc, they know how to optimize their budget. They already sensed what's the daily cap to not exceed or not to exhaust their daily budget and keep that prominent position in our pops. What it's true is that whenever you go for 3P sellers they will be obsessed about sponsored products while in 1P to prove real return of investment. For every pound that they invest in our uh, retail media network, you need to diversify their media firm because they will not go only for a one sponsored product. They need brand presence, they need conversion touch point, they need cross selling opportunities. That's why we have been accelerating our on site capabilities so we can prove better media planning. That's our strategy.

Speaker A: And then with that sort of extending products, are you doing much audience extension so away from the site using your data.

Speaker B: So that's probably the most complex thing for us. I told you our first dimension has been first party vendor performance data, customer data. We're running against the clock to build that customer single view so we can do that audience extension and drive traffic, let's call it offsite channels and how we activate those and that's something that it's our bet for next year. It's true, and this is something also, I told you in the beginning, is that we're very protective of our margins. We're convinced that retail media is a very high margin business. We have proved that already. When we talk about off site and audience extension, that's when we get the question. It's like, let's test it first and see the margins around that before we invest. Because first you need lots of tech investment and it capex goes very up. But at the same time you need operations to run that. You need a partnership probably with a media agency to help you with that. And that's another type of channel that requires another type of operation. So we are in a process of setting that up for next year.

Speaker A: Fantastic. We've only got a few minutes left, sadly. But just a question around. Um, the international piece, obviously I have a deep experience enrolling things internationally. Obviously the 195, in fact form 195 is the number of countries in the world. Tell me how you're navigating that international piece. You know, where are you centralizing, where are you localizing, how are you doing that?

Speaker B: So the thing is that we have different realities in our markets. We have a consolidated leadership position in the UK with BNQ and we drive lots of traffic online with Squarespace. So the combination of those two, it's amazing because you can test lots of things on site in bnq, but at the same time you can test lots of things on site that will deliver capabilities in our stores in Square Fix because they are highly connected. While in France and Poland and in Spain the approach is different because this is what we called our big box operating companies, big stores fighting for market share. In France, when we compare it to Adeo and Leroy, uh, Marlan, we know that we need to do much more. So what we do is even though that our on site for example platform is a single one share across all our uh, operating companies, we know that we need to go faster in France because we're very competitive market while in the uk we can understand that. Well, let's start with sponsored products. Let's start with cross selling. Let's trial inso. While in France, we need to go faster. So what we do is, from a group perspective, is we leverage the opportunity of going fast in France, go fast, implement, learn, and then apply those into B and Q. And of course, I'm talking to this, and I have lots of tiers in those operating companies that run the retail media business. But what I do is I connect those learnings and insights and how can we streamline, how can we leverage our position even when we do partnerships? Because in the end, we can pull all the volume of all our business across all our markets. But at the same time, while the teams in the operating companies are running that retail media network and basically being very provocative, uh, let's say ahead or let's get that insight, let's talk to another retailer, see how they have been doing that. And at the same time, the data capabilities are centralized because that way we can utilize that for international brands that want to run their business through all our, uh, operating companies, then data is centralized. And that's how we have been approaching the expansion of our retail media networks.

Speaker A: Very smart. I think if you can get that big group leverage on the partners and the deals and pooling that volume as well as then centralizing how you deliver, uh, and all of that, uh, knowledge and data, it's the right way. Listen, we're nearly out of time, Danny, but it's been an absolutely brilliant, brilliant podcast. But listen, we still haven't got time for one bit of fun. So I've been doing this thing at the end of the podcast called Rose Thorn, Bud. And this is something I do with my kids in order to get them to open up when they come home from school rather than give me one word answers for them. Rose is something that was great that happened that day. Thorn is something that wasn't so good. And then Bud is something they're looking forward to. So if we translate that to you and the retail media world and Kingfisher, tell, uh, us the rose being something that you're really proud of, you think that's going really, really well. The Thorn something, that's a bit of a challenge, and you're really trying to work out how to get over that. And then Bud, what are you looking forward to? What does the future look like? Should we start with the rose?

Speaker B: Yes, of course. Always starting with positive things. I think I'm very proud of how we have accelerated our digital capabilities in KingFisher the past four years. I said the trigger was the pandemic, but it was a, uh, very much needed transformation. And I look back on everything that we did, we have done and where we are right now with our marketplace model, with our retail media capabilities, with our data platform, how we are leveraging AI capabilities and introducing that into our E commerce platform, that I'm absolutely proud and makes me go wake up every day and say, okay, let's see what we find today in the office when I talk to my peers. And that's something I'm really proud. This is something challenging. I think probably the complexity of working in a big corporate and probably many people have told you this, but you need to drive loads of change management and people normally are used to stay put if everything's going well. And that's one of the reasons I joined Kingfisher is, okay, let's try to be disruptive but conscious at the same time. So challenging that status quo to drive change. It's something that shouldn't cost that much in terms of effort and time. But we have improved a lot. I mean, and hence everything that we have done in the past four years, probably that change management kind dedication it is.

Speaker A: I used to laugh about the silent protesters. It's the people who don't say anything. You think, why hasn't that happened? And then somebody that doesn't like what you're doing but isn't going to tell you, they're better off telling you and you can do something about it, but they don't tell you. It's very hard to find it.

Speaker B: Exactly. And send email with all the assessment afterwards. Like, okay, I should have known that even in France. Right?

Speaker A: Yeah. And then the bard, what are you looking forward to? What's next?

Speaker B: So I think next year it's going to be amazing, basically, because we're going to have our, uh, retail media networks live in all our operating companies. So it's going to be okay. Now this is the real game. So now how we grow our business, how we implement customer data activation, how we connect even more our stores to our regional media proposition. So next year it's going to be the real foundations of how this business is going to grow. And also proving wrong and demystifying things that we have in our plans saying, okay, we have proved the margins, we have proved the revenue, we have proved the operating model, now let's scale it. And that's what I'm really looking forward to.

Speaker A: Yeah, and you need that kind of North Star and you'll get there.

Speaker B: Yeah, I have no doubt.

Speaker A: Danny, we're out of time. So sadly. Thank you so much. It's just been a fantastic podcast. Thanks for coming on. I think it's really exciting. You've got that international opportunity and making a difference there and driving that change. And then really interesting to hear about the Amazon, how you're sort of beating them in roas, in uh, that in the vertical. That's really exciting to hear, really, uh, encouraging for the rest of the industry. Yeah. And really interesting to see how you carry on leveraging that first party data in the omnichannel world and bridge that gap or help bring your partners into, away from sort of standard trade budgets into a hybrid of retail media and trade. So, uh, thank you so much for coming on. As I often say, fantastic if you could come back on soon or in some months time and be able to come and show us how you've moved everything along. It'd be really exciting for everyone to hear.

Speaker B: Be more than happy to tell more about in a year where we are. Great.

Speaker A: Thanks Danny.

Speaker B: Thank you very much.

Speaker A: The Retail Media Moguls Podcast is brought to you by Platform195. To learn more about Platform195 and how to connect retail media with intelligent marketing to accelerate growth, visit platform195.com and then make sure to search for retail media moguls in Apple Podcasts, Spotify and Google Podcasts or anywhere else podcasts are found. Make sure to click subscribe so you don't miss any future episodes. And on behalf of the team here at platform 195, thanks for listening.