Grocers deserve innovative retail media too, DOOH-n’t you agree?
By Roberto Avila & Eric Bockhaus
At Sageview, we continue to lean into our Digital Out of Home (DOOH) thesis, following our investment in Atmosphere. One of the key tenets of our thesis was the strong growth and expansion in the broader DOOH market and it has not disappointed after growing total spend by ~23% in 2021 and a whopping ~50% in Q4 2021 when compared to the prior year. Retail Media is a specific segment within this market that is ripe for disruption and will benefit from the continued growth trends in DOOH as advertising spend permeates from saturated digital platforms to media networks with a more unique reach. We believe this trend will accelerate in the coming years and will further extend itself into brick-and-mortar stores. As such, this change will cause retailers to seek out platforms and solutions that give them the ability to launch media networks within their stores to better target and engage customers.
Advertising within grocery and retail stores broadly has historically been a sleepy market full of printed periodicals and ads pasted on shopping carts. Founded in 2016, Clerk set out to change this norm and improve the shopper experience. The company did so by creating a digital advertising network called Grocery TV that plays content and ads on their digital media screens, which are placed at checkout. Clerk’s devices are not just your average TV screen either. They are motion activated with an AI enabled camera that allow brands and grocers to ensure no fraudulent impressions are being delivered on their advertisements and content. Grocers are also able to own and personalize the experience by utilizing their share of the screen time to plug in-store products and promotions alongside brands like Chase, Hershey, Spotify and more. In addition, Clerk has also built out a SaaS merchandising solution to ensure products are in-stock and shelved correctly at checkout.
Co-founders Marlow Nickell and Don Oelke have roots in the grocery channel and realized there was an opportunity to modernize the market and easily catalyze adoption. On that premise, they set off to build the digital ad network that would become Grocery TV. The team has executed extremely well in a very capital efficient manner (with only $3.5m raised before the Series B from Sageview!) Since those humble beginnings, Grocery TV is now present in almost 3,000 stores across all 50 states in the US, reaching an audience of over 30 million grocery shoppers.
Creating a ‘no-brainer’ decision for Retailers
Grocers and retailers benefit immensely from the Clerk platform. The first value proposition of Clerk is the ability to control a portion of the screen time. With this ability, grocers can leverage this time to run their own content, promotions, and signage, further engaging customers within the store, importantly at the point of purchase. In fact, one grocer we talked with noted how their share of screen time helps encourage greater loyalty and catalyze purchases saying, “It helps customers identify new items…and they often ask about them”. The platform is also incredibly low risk since Clerk provides and installs these screens for free in addition to paying the retailers a share of the ad revenue generated by the platform. Sounding almost too good to be true for retailers, Clerk is a no-brainer decision for most.
The customers we talked with also had great appreciation for the SaaS merchandising solution that Clerk offers. In this tight labor market, they noted how they often struggle to hire enough retail associates and therefore having a technology solution alert them on out-of-stock products and automatically reorder those items was especially beneficial.
Providing an avenue to advertise, accurately, in-store
Clerk has not only carved out a premium position within the store at checkout but also pioneered a technology approach that allows greater compliance and accuracy on ad campaigns that isn’t traditionally seen in DOOH. Their proprietary technology ensures that their devices are only on when someone is present in the immediate surroundings and their AI enabled cameras allow brands and agencies to verifiably measure exactly how many impressions are delivered on an ad campaign. Many media providers in DOOH currently rely on estimates and we believe Clerk’s ability to measure this accurately with their impression data is a game-changer for brands and has already begun disrupting how the industry operates.
While the impression data and measurability of ad campaigns is important, brands and agencies also raved to us about their unique ability to target the head of the household at checkout – generally the only captive location in the store. Being in the grocery store also provides brands greater reliability to target consumers as almost 90% of people shop in-store today and the vast majority visit at least once per week. What makes their location at checkout even more powerful is that any type of brand can advertise on Grocery TV. Endemic and non-endemic brands such as credit card companies, music streaming businesses and of course, CPG brands, are all relevant as people wait in line to pay. This flexibility is important and makes Grocery TV “differentiated and valuable in its own unique way,” as one ad network partner noted to us.
The Road from Here
In addition to the strong intrinsic value provided to retailers and brands, Clerk is also playing into a larger theme of diversifying advertising away from strictly digital, mobile campaigns. Ad spending in Digital Out of Home and Out of Home broadly has increased rapidly in the past few years and we believe that Clerk will benefit uniquely from these tailwinds given their premium placement at checkout within retail.
The team also has larger aspirations than just being at checkout in grocery and sees an immediate opportunity to expand across other areas of the store and into other retailers. We strongly believe in their vision and are excited to help the team execute on these plans. At Sageview, we are constantly searching for quality teams, business models and markets to back and we think we have found that perfect combination in Clerk. We see an extremely bright future for Clerk and are very excited to partner with Marlow, Don, and the entire team on their next phase of growth!